Deck 15: Consumer Fraud

Question 1

All of the following are ways to minimize your risk of identity theft,EXCEPT:

A)opting out of pre-approved credit cards.
B)shredding mail that contains detailed information.
C)using strong passwords and changing them often.
D)using Social Security number on visiting cards.

Answer 1

D

Question 2

Which act makes it illegal for any agency that receives federal funding to disclose privacy information about individuals?

A)Identity Theft and Assumption Deterrence Act
B)Family Education Rights and Privacy Act of
C)The Gramm-Leach-Bliley Act
D)Fair Credit Reporting Act

Answer 2

B

Question 3

Fraudsters use "cookie" type software to:

A)automatically remove web histories after one closes the web browser.
B)initiate pop-ups to unknown sites to gather valuable consumer information.
C)show the status of a Web site to be secure.
D)gather personal and confidential information from consumers' hard drives.

Answer 3

D

Question 4

Which of the following involves the use of Internet to steal important information?

A)Shoulder surfing
B)Phishing
C)Skimming a credit card
D)Dumpster diving

Question 5

Federal law limits consumers' credit card fraud liability to ______.

A)$50
B)$100
C)$150
D)$200

Question 6

Which act gives individuals the right to opt-out of having their information sold?

A)Identity Theft and Assumption Deterrence Act
B)Family Education Rights and Privacy Act
C)The Gramm-Leach-Bliley Act
D)Fair Credit Reporting Act

Question 7

Shoulder surfing occurs when:

A)criminals physically confront consumers forcing them to reveal their valuable information.
B)criminals follow consumers to discover their buying habits.
C)criminals sneak into victims' homes and steal their information.
D)criminals watch consumers from a nearby location as they give credit card information over the phone

Question 8

Which of these is a second dimensional action in the trial stage of the identity theft?

A)Larger thefts,often involving personal interaction,without much chance of getting caught.
B)Smallest thefts that lay down a solid foundation for the perpetrator to commit identity theft.
C)Largest thefts committed after perpetrators have confidence that their schemes are working.
D)Small thefts to test the stolen information.

Question 9

Often,fraudsters contact potential identity theft victims and act as a representative of a business to verify previously gathered information.This is known as ________.

A)trashing
B)pretexting
C)mail stuffing
D)skimming

Question 10

According to the Federal Trade Commission,what is the largest type of consumer fraud?

A)Identity theft
B)Ponzi scheme
C)Magazine fraud
D)Telephone fraud

Question 11

Which is the primary agency responsible for helping victims of identity theft?

A)Social Security Office
B)Federal Bureau of Investigation
C)Permits Department
D)Federal Trade Commission

Question 12

Which stage is considered to be the most critical stage of the identity theft cycle?

A)Action stage
B)Trial stage
C)Discovery stage
D)Cover-up stage

Question 13

All of the following are symptoms of potential investment scams EXCEPT:

A)pressures to get in early on the investment.
B)a business with a history of bankruptcy or scandals.
C)use of a special tax loophole or a tax avoidance scheme.
D)promise of returns comparable to those of treasury bonds.

Question 14

Consumer fraud is described as any fraud that:

A)is committed by a consumer.
B)targets individuals as victims.
C)is committed against an organization.
D)comes from a separate country.

Question 15

First dimensional actions in the trial stage of the identity theft are:

A)efforts to gain victim's personal information.
B)larger thefts,often involving personal interaction,without much chance of getting caught.
C)largest thefts committed after perpetrators have confidence that their schemes are working.
D)small thefts to test the stolen information.

Question 16

Which dimensional actions are the most risky for the identity thief?

A)Third dimensional actions
B)Second dimensional actions
C)First dimensional actions
D)Fourth dimensional actions

Question 17

Which act limits consumers' liability for fraudulent credit card charges?

A)Identity Theft and Assumption Deterrence Act
B)Fair Credit Billing Act
C)Family Education Rights and Privacy Act
D)Fair Credit Reporting Act

Question 18

A fraudster changes the physical address or e-mail of the victim so that credit card statements are sent by the financial institution to the perpetrator rather than the victim.Which stage of the identity theft cycle is being discussed here?

A)Verification stage
B)Trial stage
C)Discovery stage
D)Action stage

Question 19

The Gramm-Leach-Bliley Act:

A)gives financial institutions the right to share personal information for a profit.
B)expressly prevents financial institutions from sharing personal information.
C)allows financial institutions to share personal information,as long as it is not for a profit.
D)prevents identity theft and protects confidentiality of customer information.

Question 20

Common identity theft methods include all of the following,EXCEPT:

A)filing for bankruptcy under the victim's name.
B)opening new bank accounts in the victim's name.
C)changing a victim's mailing address.
D)destroying personal property,such as a home or car.

Question 21

Accumulating documentation belongs to which stage of the identity theft cycle?

A)The action stage
B)The discovery stage
C)The trial stage
D)The concealment stage

Question 22

What is the most detrimental consequence of identity theft?

A)The loss of physical assets.
B)The loss of credit,reputation,and erroneous information.
C)Time lost in reporting the fraud.
D)The actual loss of money.

Question 23

Which of the following is a variation of fraudulent MLMs,in which an organization sells illusionary products and profits,instead of real products?

A)ponzi scheme
B)foreign advance scheme
C)identity theft scheme
D)shoulder surfing scheme

Question 24

A fraudulent process whereby even representatives of legitimate MLMs are required to buy large,expensive amounts of inventory is known as _________.

A)forward pricing
B)snake oil
C)front loading
D)opportunity meeting

Question 25

A Nigerian money offer email scam is a form of _____.

A)foreign advance-fee scam.
B)purchase of real estate scam.
C)clearing house scam.
D)multilevel marketing scam.

Question 26

What makes telemarketing fraud more effective than Internet or mail-based approaches?

A)Reduced transaction costs.
B)Opportunity to speak with a person directly.
C)Increased size of the fraud.
D)Absence of government regulations.

Question 27

Once a fraudster has gained confidence that the identity theft is working,he or she often takes out a loan using the victim's identity.The most common type of fraudulent loan is for _____.

A)foreign travel.
B)purchasing real estate.
C)education.
D)an automobile.

Question 28

Identify the complaint database developed by the U.S.Federal Trade Commission.

A)Consumer Watch
B)Fraud Watchdog
C)Consumer Sentinel
D)Identity Theft Assistance

Question 29

Which of the following observations is NOT true of foreign-advance fee scams?

A)Perpetrators are well-known businesses and there is usually some urgency to participate.
B)All messages come from an unknown party who claims to have access to large sums of money or assets.
C)Perpetrators are always willing to transfer money or other assets to the victims,but only after money or information is extracted.
D)Perpetrators claim to have access to large sums of money or assets.

Question 30

_____ is a scam where consumers respond to an advertisement that promises income simply for filling envelopes.

A)Craft assembly
B)Bogus mystery shopping
C)Mail stuffing
D)Skimming

Question 31

What is dumpster diving?

A)An activity where fraudsters use an information storage device to gain access to valuable information.
B)An activity where perpetrator will try to build a relationship of confidence with the victim.
C)An activity where criminals watch consumers from a nearby location as they give credit card or other valuable information.
D)An activity where fraudsters rummage through consumers' trash.

Question 32

A clearinghouse scam:

A)involves a victim receiving a letter that claims he or she has inherited a significant amount of money.
B)involves a victim receiving a mail from a known party who claims to have access to large sums of money or assets.
C)involves a victim receiving a letter that falsely claims the writer represents a foreign bank.
D)involves a victim receiving an email containing the Social Security number and/or credit information.

Question 33

Which federal statute protects the privacy and confidentiality of patient information?

A)Family Educational Rights and Privacy Act
B)Identity Theft and Assumption Deterrence Act
C)Gramm-Leach-Bliley Act
D)Health Information Portability and Accountability Act

Question 34

_____ is a hi-tech method by which thieves capture personal or account information from a credit card,driver's license,or even a passport.

A)Product testing
B)Skimming
C)Spimming
D)Phishing

Question 35

Which of the following is false regarding a Nigerian money offer scam?

A)States the need for urgent assistance.
B)Makes the victim feel like he or she is the only recipient of the special opportunity.
C)Involves someone trying to sell a piece of prime African real estate.
D)The e-mail is the promise of money and asks for help.

Question 36

All of the following are types of foreign advance schemes,EXCEPT:

A)Disbursement of money from wills.
B)Multi-level marketing scams.
C)Sale of crude oil below market price.
D)Purchase of real estate scam.

Question 37

Snake oil plans are plans:

A)that make their money by getting new people to buy property in exotic locations.
B)that promise enormous earnings or claim to sell miracle products.
C)that motivate the purchase of unusually overpriced goods or services.
D)that make people believe that they will make money simply because they are one of the earliest investors.

Question 38

What is one of the biggest marketing campaigns of illegal MLMs?

A)Promise of full-time work from home for huge weekly earnings.
B)Absence of headhunter fees.
C)A mysterious "benefactor" interested in contributing a large sum of money.
D)Promise that investors will always make money from future downline growth.

Question 39

TransUnion,Equifax,and Experian are examples of _______.

A)identity theft investigation agencies
B)credit reporting agencies
C)money transfer agencies
D)credit billing agencies

Question 40

Product testing is a fraud:

A)that request the consumers to review the products presented in the brochures and send their commentaries to the supplier for review.
B)where consumers respond to an advertisement that promises income simply for stuffing envelopes.
C)that promise victims a job that involves strolling through stores,enjoying the displays,shopping for merchandise,and then filing reports on the experiences they have had.
D)where perpetrators promise high pay for working on different projects.

Question 41

_____ is a scam where perpetrators promise high pay for working on different projects like wooden calendars,paper towel holders,hair clips,or holiday decorations.

A)Product testing
B)Mail stuffing
C)Craft assembly
D)Skimming

Question 42

What is the most important way to fight identity theft?

A)By shredding mail that contains detailed information.
B)By taking extra care of the personal valuable information.
C)By using strong passwords and changing them often.
D)By preventing it from happening in the first place.