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My Rights as a Victim of Fraud

The law is created by the courts and the legislatures. Both attempt to be responsive to the needs of fraud victims. However if you a dealing with a dishonest person, the remedy you want most - the return of your money - can be elusive. Often the perpetrator has no money but if he does, it is hidden. There are two groups of people who can help, often simultaneously, government agencies and private agencies including law firms.

It is important to understand that most victims of fraud cannot recover the money that was taken because the perpetrator will not pay a judgment if he or she is sued. Occasionally if you act quickly, you can freeze the assets of the person who cheated you. Sometimes there may be a responsible person who has exposed himself to liability because of proximity to the fraud (e.g. sitting on the board of directors or negligent supervision of an employee). Unless you can proceed against a "deep pocket" defendant or want to spend money on lawyers "for the principle", all you can do is to clean up the damage and learn from the experience.

Government agencies

Government agencies include consumer protection, insurance and investment (securities) enforcement divisions. The criminal enforcement agencies may also become involved. If the perpetrator has money, we prefer to seek a civil remedy before the criminal authorities become involved. If the matter becomes criminal first, the perpetrators money is spent on his legal defense while the civil case waits on the sidelines for the criminal case to finish.

A good starting point is to contact your state's attorney general.

Private agencies

Private remedies, not using government agencies or criminal enforcement, are primarily effective when the perpetrator of the fraud is a "solid" or almost solid citizen. If he or she is a outright thief or is intentionally scamming you, the odds are not good that you will ever recover anything. A solid citizen will usually have a job and semi-permanent location. A "flakey" person (for example) will not have a reliable telephone number and will seem as though she is trying to hide. Often the perpetrator has lived his life on other people's money and knows no other way of making a living.

Small claims courts in Oregon and Washington - no lawyer needed. These courts provide easy and quick access to justice. They are inexpensive but claims are usually limited to less than $5,000.

I think the perpetrator is a "solid" citizen.

You are fortunate, as far a fraud victims go, but this does not mean that you will recover your loss or that it is worth the effort. Often you can obtain a judgment through the court system and never collect through the twenty year life of the judgment. Obtaining a judgment gives you the maximum powers a private person can obtain from the justice system. If the judgment debtor has a job you have the right to take (garnish) a portion of his wages. You can seize assets and property subject to certain rules and limitations.

Often the debtor hides the assets in family member names and it becomes difficult or impossible to find anything to seize. The perpetrator may seek bankruptcy protection and be able to discharge the debt (though a fraud judgment may protect your claim from discharge).

If enough money is at stake or if the type of fraud allows attorney fees by statute, an attorney may be willing to take your case on a contingency. Attorney fees can cover a wide range. Expect a normal fraud case to cost a minimum of $5,000 if the defendant does nothing (defaults), at least $30,00 if the case goes to trial, and several hundred of thousands if complex matters are involved and the defendant fights as hard as she can.

I think the perpetrator is "flakey".

Chasing an irresponsible perpetrator can be a waste of time. It may be better to take the loss as a learning experience. You can try to find the defendant, serve him and obtain a judgment. Most times you will find that you have sent good money after bad. You may want to report the person to criminal authorities.

Only chase a insolvent perpetrator as a matter of "principle" and expect to spent a lot of time and money.

I don't know much about the perpetrator. How do I find out?

We have access to professional resources such as comprehensive databases that can find information for most situations. If you want to do your own investigation, here are some ideas.

  1. Write down what do you know about this person.

  2. Collect all information from others who dealt with the perpetrator like credit card, shippers, and the like.

  3. If a credit card was involved exhaust any remedy available from the credit card company? Was the card issued by a bank or directly from the credit card company? Is it a true credit card or a debit card cleared through Visa or MasterCard network?

  4. If a debit card or check is involved, who is the issuing bank? What branch? Exhaust your remedies with the bank by contacting the proper department. See if the person is listed in the local on-line telephone book or can be found through a search engine.

  5. Check voter registration records.

  6. Check Motor Vehicle registrations.

  7. Check drivers license records (private in Washington).

  8. Check state business records (Secretary of State).

  9. Check Internet real property ownership records.

  10. Contact a search firm on the Internet. Start with free services found by typing “person search” in google.com or other search engine.

  11. Consider paying the $10 or so that personal search firms on the Internet charge to give you more information (find in search engine).

  12. Consider paying for a more extensive and expensive Internet search (find in search engine).

  13.  Find a local private investigator and put her on a strict fixed price budget to collect the information.

  14. Contact the police department closest to the perpetrator.

FRAUD TIP: Always try to know the person you are dealing with. Obtain as much information as you can before you do business with her. If you ignore this rule you are gambling. If you are defrauded after ignoring this tip, don't forget to take some of the blame yourself.

 

 


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Association of Certified Fraud Examiners

About Certified Fraud Examiners

Entrusting your case to a CFE is the sensible decision in financial fraud cases. More...

Tollefsen Law Mission Statement

Our Mission Statement

.. to provide the highest quality legal service at an affordable price with integrity.. More ...

Cases of Public Interest

Cases of Public Interest

Some of Tollefsen Law clients have had case followed by the press. More...

 
     
 
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