Fraud
 Is any purposeful communication that deceives, manipulates or conceals facts in order to create a false impression?
 It is a crime and conviction may result in fines, imprisonment or both.
 The most common fraudulent activities employees report about their coworkers are stealing office supplies or shoplifting, claiming to have a worked extra hours and stealing money or products.

Accounting Fraud
 Usually involves a corporation financial reports in which companies provide important information on which investors and others base decisions that may involve millions of dollars.
 If documents contain inaccurate information, whether intentionally or not, then lawsuits and criminal penalties may result.
 Certified Public Accountants (CPA) were not concern about competition. Accountants are now permitted to charge performance-based fees rather than hours rated.

Marketing Fraud
 The process of creating, distributing, promoting and pricing product--- is another business area that generates potential ethical issues.
 False or misleading marketing communications can destroy customer’s trust in a company.
 Lying, a major ethical issue involving communications, it potentially significant problem.
 False and deceptive advertising is a key issue in marketing communications.
 Puffery can be defined as exaggerated advertising, blustering, and boasting upon which no reasonable buyer would rely and is not actionable under Lanham Act.

Implied Falsity
 Means that the message has a tendency to mislead, confuse or deceive the public.
 Advertising claim that use implied falsity are those that are literally true but imply another message that false.
 The characterization of an advertising claim as literally false can be divided into two subcategories:

• Test prove (establishment claims), in which the advertisement cites a study or test that establishes the claim
• Bald assertions (non-establishment claims), in which the advertisement makes a claim that cannot be substantiated, as when a commercial states that certain product is superior to any other on the market.

Labeling Issues
 Are even murkier.
 More informal way than assigning it to a version or component.

Slamming
 Or changing a customer’s phone service without authorization is another important issue involving labeling that is specific to the telephone industry.
 Telephone slamming is an illegal telecommunications practice, in which a subscriber's telephone service is changed without their consent.
 Advertising and direct sales communication can also mislead by concealing the facts within the message.

Consumer Fraud
 It is when consumers attempt to deceive businesses for their own gain.
 In 2005 the FTC estimated that 25 million consumers had engaged in consumer fraud
 Consumer engage in many other forms of fraud against businesses shoplifting, price tag switching, item switching lying to obtain age related and other discounts and taking advantage return policies by returning used items, specially clothing that has been worn(with the price tags still attached)
 It also involves intentional deception to derive an unfair economic advantage by an individual or group over an organization.
 Collusion typically involves an employee who assists the consumer fraud
 Duplicity may involve a consumer staging an accident in a grocery store and then seeking damages against the store for its lack of attention to safety. In the other, word consumer wants to ask for refund by claiming a defect product.
 Guile is associated with a person who is crafty or understands right/wrong behavior but uses tricks to obtain unfair advantages.
 Businesses that operate with the “customer is always right” philosophy have found that some consumers will take advantage to this promise and have therefore modified return policies to curb unfair use.