Fraud is not a modern crime. It is said to have occurred centuries before Christ; one story from Ancient Greece tells of a merchant named Hegestratos and his failed shipping scam. Centuries, even millennia, later, the crime of fraud still runs rampant on both the large and small scale. It has not just penetrated the world of commerce and finance, but it has also saturated the lives of ordinary men and women.

As the world evolves and progresses, so have the means and methods of committing fraud. Nowadays, it does not just happen through spoken word or pen and paper. It is likewise perpetuated through the Internet, credit cards, ATM bank cards, e-mails, and mobile phones.

Be wary of the modern ways of committing fraud, but continue to be cautious of the old and classic ways, which never go out of style. Read on to learn more about fraud, or click on a section to immediately get to that part:

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1. WHAT IS FRAUD?

According to Webster’s New World Dictionary, in the realm of law, fraud is defined as the intentional deception to cause a person to give up property or some lawful right.

Thus, there is deceit and damage in fraud.


2. WHAT ARE THE LAWS GOVERNING FRAUD?

a. Articles 161 through 189 of the Revised Penal Code punish forgeries, falsifications, other falsities (including false testimonies), and frauds.

b. Articles 315 through 318 of the Revised Penal Code punish estafa or swindling and other forms of deceit.

c. Batas Pambansa Blg. 22, otherwise known as the “Bouncing Checks Law,” punishes the issuance of a bouncing check.

d. Republic Act No. 8484, otherwise known as the "Access Devices Regulation Act of 1998," regulates the issuance and use of credit cards in order to lessen credit card fraud and the circulation of fraudulent credit cards. Credit card companies are now required to disclose their interest rates, annual fees, computation method, and other fees.


(Photo by alexkalina via sxc.hu)


3. WHAT ARE THE COMMON EXAMPLES OF FRAUD?

The following are the most common examples of fraud in our society:

a. Forging a signature, which involves causing it to appear that a person participated in making the document, and making false statements.

b. Falsifying a public, commercial, or private document and using the falsified document. This is one of the common cases of fraud. For example, a man forges the signature of his brother and falsifies the Extrajudicial Settlement of the estate of their parents, making it appear that his brother waived all his rights to the properties. He then uses the falsified Extrajudicial Settlement to transfer all the properties to his name.

c. Receiving money, goods, or personal property for a certain purpose but instead using it for personal benefit or denying you have it. Here's a common scenario for this kind of swindle: an agent is entrusted with jewelry, having given his agreement to sell the pieces on commission, to remit the price, and to return any unsold items, but he instead absconds with the seller's property.

d. Taking advantage of a signature made in blank by writing above the signature. This form of estafa often occurs when one person gives another a blank sheet of paper with a signature, which is to be used for a specific purpose. However, the person entrusted with the blank sheet of paper uses it for another purpose, inserts words above it, makes it appear to be a deed of sale or some other document, and uses it to transfer ownership of properties or other rights to himself.

e. Using a fictitious name or falsely pretending to possess power, property, business, or imaginary transactions. Text and e-mail scams about winning in a supposed raffle draw fall under this kind of fraud. Another example of this kind is the modus operandi of the “Budol-budol” gang, wherein a person is promised a bag full of money in exchange for a certain amount of cash and/or jewelry. The gang leaves a sealed bag with the victim, with the instruction that she can open it only when she arrives home. The victim only realizes later on that the bag is filled with bundles of paper rather than the money promised.

f. Issuing a check on date or postdated in payment of an obligation, when there are no funds, or insufficient funds, in the bank to cover the check.

g. Persuading another to sign a document by means of deceit. To illustrate, there is estafa when a person deceives another into signing a deed of sale by making the latter believe that it was only a special power of attorney.

h. By selling a real property and pretending to be its owner. There have been scams, for example, in which the perpetrators sold the same lot in a distant region to several buyers, therefore earning several times over from the same plot of land.

i. By selling a real property with the false representation that it is not mortgaged or encumbered.

j. Using or having in one’s possession or control a credit card or ATM card without the authority of the owner or which is counterfeit.

k. Using and/or possessing a credit card obtained through an application that is false.

l. Abandoning or leaving one’s place of employment, business, or residence stated in the credit card application without informing the credit card company about it and while having an outstanding balance of more than P10, 0000 that is past due for more than 90 days.


(Photo by David Goehring via Flickr Creative Commons)

4. HOW CAN YOU GUARD YOURSELF AGAINST THESE?

a. Unless you yourself called the credit card company, do not give strangers your personal details, such as your birth date, residence, mother’s maiden name, the last school you attended, and/or other details such as the credit card number, which are needed by credit card companies in order to verify your identity.

b. Be cautious of easy money and schemes that sound too good to be true. Do not believe these immediately, and, if possible, stay away from these people, who might be members of a gang.

c. Check your credit card and bank statements for charges or withdrawals you did not make and report these to the credit card company or bank as soon as possible.

d. Never sign a blank document.

e. Never sign a document without reading and understanding the contents.

f. If you do not understand the contents of the document you are about to sign, then refuse to sign the document. Consult a specialist or a lawyer who can explain the contents of the document to you.

g. When a document needs to be notarized, make sure you appear before the lawyer and sign the document in his/her presence.

h. When buying real property, meet the registered owner of the property and undertake the process of diligence--verify the title, tax declaration, and other documents of ownership in order to confirm the status of the property and ascertain its real owner.

i. When you are buying real property through a representative, verify whether the owner executed a Special Power of Attorney granting the representative the right to sell the property on his/her behalf. Verify if the Special Power of Attorney is genuine. Read and understand the extent of the authority given to the representative. Do not give the payment to the representative if the Special Power of Attorney does not specify that he/she has the authority to receive it.

j. Issue a trust receipt when you impart goods or other personal property such as jewelry to another person for the purpose of selling it. Make sure this includes the obligation to return the unsold items.

k. When you receive an e-mail or a text from an ordinary 11-digit number informing you that you have won a raffle or any other prize, do not immediately believe that it is legitimate. If you indeed participated in a raffle draw, verify directly with the office or store that conducted the raffle draw.

l. When you own real property but you cannot occupy it in the meantime, visit the property from time to time in order to make sure no one else is using it. Also make sure to exercise acts of ownership, such as putting up a fence around the property, putting up structures, and/or planting trees. If you cannot do this personally, have a trusted representative do it on your behalf.

m. When a real property is mortgaged to you, make sure that you have the mortgage annotated at the back of the title in order to make third person aware of the mortgage.


(Photo by Jamil Velji via Wikimedia Commons)


5. WHAT CAN YOU DO IF YOU FEEL YOU’VE BEEN THE VICTIM OF FRAUD?

a. Report the text or email scam to the Department of Trade and Industry through their direct hotline number, 751-3330, and/or to the National Telecommunications Commission.

b. If you have the identity of the one who committed the fraud, report the matter to the police station in the area where the fraud was committed.

c. Secure your documentary evidence, such as trust receipts, returned checks, letters, and other documents, which will help you prove your claim against the person/s who committed fraud against you.

d. Immediately consult and/or engage the services of a lawyer in order to take the appropriate and immediate legal action. The person/s who committed fraud against you may abscond, or make a run for it. Hence, immediate legal action may be needed in order to prevent him/her from absconding and avoiding legal action.


6. WHAT TIPS CAN YOU FOLLOW TO STAY ON THE SAFE SIDE?

a. When you issue checks, whether in payment of obligation or as a mere guarantee for an obligation, make sure that you can fund your bank account on the date it falls due or within 5 banking days upon receipt of the notice that your check bounced.

b. If you are certain you cannot fund a check on the date it falls due, then do not be pressured into issuing a check, even if it is not intended to be encashed, but only to serve as a guarantee. Regardless of your agreement that the check should not be encashed, the payee who possesses the check can still deposit it.

c. When you are an agent engaged to sell goods and other personal property such as jewelry, make sure to remit payments and return the unsold items within the agreed time.

d. When you are entrusted to sell real property on behalf of another person, make sure that the owner of the real property executes a Special Power of Attorney authorizing you to sell his/her property.

e. When you change your place of employment, business, and/or residence, make sure to inform your credit card companies.

f. Be certain that you are providing truthful information to your credit card companies.


(Photo by Jerry Bunkers via Flickr Creative Commons)

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