White Collar Crime

Question 1: How do consumer fraud, false advertising, and price fixing exemplify the definition of white collar crime?
What is white collar crime? White collar crime is defined as illegal or unethical acts that violate creditable responsibility of public trust committed by an individual or organization, usually during the course of legitimate occupational activity, and by persons of high or respectable social status for personal or organizational gain. The term is widely used by criminologist and sociologists alike, incorporating a mass of non-violent behaviors related to economic fraud.
In some instances, many acts innovated by perpetrators are not only criminal, but rather unethical. Although there is deviant or criminal intent involved,
some offenses are not deemed illegal, although it may be dysfunctional or unethical. These offenders have no remorse for its victims, and in some scenarios can be very cold hearted.
Primarily, the term "white collar crime" was designated to classify crimes committed by socially-elite, offenders of the law such as Government officials, or white collared workers, but it is now referred upon to a broad-range of non-violent offenders that revolve around unfairness and deviance. In today’s business oriented society, white collar crime is rapidly increasing, making it harder each day to differentiate between a criminal and a business-man walking down the street due to their appearances going hand in hand, making it harder to crack down on. Most cases within the white collar crime jurisdiction, can be variated into different types of offenses and a wide range of people that are victimized for each crime committed as well as the effects it may have on the society as a whole, such as wasted tax dollars spent to recover any losses to its victims as well as reconstruct the economy if necessary and un-do any wrongful doings.
The branch of government responsible for policing these acts of societal betrayal is mainly commissioned by the Department of Justice, with the exception of special task force’s and branches of government designated to specialize in the departments of which the crimes and unethical behaviors are being implemented.
The most common types of offenses known to exemplify the term "white collar crime" is mainly classified by authorities as consumer fraud, false advertising, and price fixing. Consumer fraud involves the use of deceit, lies, and or misrepresentations to lure customers into purchasing a good or service. Many casualties are greatly emphasized on the elderly; if not already victim’s primary emphasis will be focused on the baby boomers, or people born during 1946-1964. Baby boomers are known to be the largest segment of our population, estimated around 78 million people. It is no secret that the growing population of senior citizens will continue to rise, thus creating more potential for harm to the innocent and victimization of the elderly. (http://www.fbi.gov/page2/april08/senior_fraud.html)
Place for advancement exists in the consumer fraud area with the wide range of tech savvy baby boomers that have considerable computer skills. Through this, fraudsters are modifying their conniving techniques, with not just old fashioned mass mailings, and telemarketing, but online scams as well. Such scams include identity theft, e-mail spamming, and "phishing", otherwise described as the act of luring internet users to fake websites by using authentic logos or fake affiliations to organizations in effort to steal passwords, and financial or personal information.
Many elderly people are attractive targets for con artists due to the fact that they’re less likely to report a fraud because they don’t know where to go or are simply embarrassed to talk about their conniving mis-hap. In some cases, if they are lucky enough to report the crime, it can sometimes be hard for them to remember or describe exact details. Lastly, many of the goods and services being used as bait are of their peak of interest such as health care supplies, retirement savings, "anti-aging cream" and other products or services that may be appealing to an elderly person. Capturing the emotions of a consumer is a goal often sought out by con artist in effort to make their scheme successful.
Some other common schemes that have affected the lives of the elderly as well as people other than the elderly are better known as health insurance fraud, foreign lottery and sweepstakes fraud, advanced fee credit card frauds, investment frauds, telemarketing, charity schemes, and nonetheless, recovery schemes which can be exceptionally cold-hearted since an offender will target previous victims by convincing them that their losses have been recovered by law enforcement officials but not being released until a fee is paid upfront to get it back, thus re-victimizing the innocent once again, which has been a prime exemplification of a white collar crime.
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False advertisinig involves the use of false or misleading statements in advertisements. Since advertising has the potential to persuade people into commercial transactions that many would prefer to avoid, the Federal government tries to regulate and levy what types of acts are practiced in effort to control false, misleading or deceptive advertising.
Retailers present consumers with untrue, misleading information in hopes to lure consumers into their stores primarily to buy their merchandise. The unethical and deceiving efforts carried out by retailers and marketing strategist are merely treated as criminal acts in the United States but rather referred to as civil violations, usually if multiple violations are investigated to find conspired fraudulent intentions the consequences can be as punishable as criminal convictions.
There are various types of false advertising. The sales tactics and situations that often occur could be endless, often leaving the consumer with "the short end of the stick" meaning that at the end of a sale, a merchant will come out the most beneficial. The type of misdeeds imposed on larger corporations could be heart throbbing. Companies such as tobacco manufacturers are by far, the most common cause of many premature deaths due to a consumer’s use of their product. This is due their failure to disclose that smoking tobacco products such as cigarettes may cause all types of cancers and health risk known to them over half a century ago. (www.truth.com)
Other industries such as pharmaceutical companies have plotted unethical schemes to market "miracle" drugs that will eventually cause their consumers to increase their risk of heart attacks, and eventually die. Merck & Co. Inc was the pharmaceutical company that produced the drug Vioxx. After eventually learning that their drug caused people to die, they continued to market it without disclosing side effects that may have been beneficial to its consumers until their involvement in a class action law suit causing them to compensate over 50,000families who lost loved ones due to their pain killeing drug. (www.consumeraffairs.com/news04/vioxx/death.html)
Unfortunately Merck continues to market their drug in countries outside of the United States while still aware of the effects of their drugs. In my opinion this exemplifies a highly unethical white collar crime, beyond belief, clearly violating public trust. Many debates have arisen that considering one knows the effects of a drug that can lead to death may even constitute as murder.
Eventually with the oversight of the federal government, particularly governed by the surgeons general, and the Food and Drug Administration (FDA) there was an imposed "truth in labeling" issued to companies making it mandatory to disclose any type of health warning; essentially referring to the concept that "customers have the right to know". This "truth in labeling" not only refers to large tobacco and pharmaceutical corporations, but any companies that engage in any types of commercial trade which can possibly mislead or deceive a consumer.
While other retailers and marketing departments innovate new ways to lure customers into buying their products, there have been many strategies and tactical marketing skills used to achieve such manipulation of state and local laws practicing with a low standard of ethics. Some pricing based methods that have been proven to succeed in deceiving consumers are hidden fees and surcharges even from businesses one wouldn’t expect to be deceived such as banks and credit card companies, but mainly popular with cell phone companies.
Other types of pricing based strategies that often trick consumers are rebates, inflated price comparison, showing an inflated "regular price" only to show a discount price next to the regular priced item, creating a low pricing effect.
Another trap used in advertising are sale prices on "selected items", and the use of psychological pricing, when cutting the price on a good down by one cent less than the price point, to fool customers into thinking the price is somehow less than the actual price. This works because human nature causes us to pay attention only to the most significant digit in the price.
Some methods like "bait and switch" offer a service or product at a very low price, with little or no intention to sell the said product advertised. If available at all, some retailers will have a limited quantity in order to comply with local laws and practicing of ethics. This is usually obvious on "Black Friday" news paper ads published around Thanksgiving. Introductory offer which is an offer for an on going service which is only valid for a limited period, usually stated in fine print. Some merchants are often seen abusing their bankruptcy privileges with "going out of business" sales showing the urge for a company to liquidate their merchandise, although governed by U.S. bankruptcy laws, many companies would have no plans to be going out of business.
The previously mentioned false advertising methods are stressed with great emphasis on kids. Tobacco companies were founded to have conspired advertising their products by way of young children. such advertisements are focused on television ads since the average American child views about 25,000 commercials a year, it is no mystery why emphasis on child advertising is practiced. Since one may find this very unethical, it is also no mystery why the american academy of pediatrics has called for a ban on childrens ads in response to the misleading advertising practiced on the young Americans. Many countries have already banned child advertising since it has already been deemed immoral. Althouhg a large majority of the society in the U.S. may consider it immoral, and unethical, opponents argue that it may be considered unconstitutional to ban the advertisements, which has been a loop hole for many companies throuhgout the years. If such scandoulous advertising techniques are not removed, many children will be exposed to commercials that force childrens to urge parents to spend money on toys that may have had misleading advertisements, and unhealthy foods such as cereals loaded with sugars, which contribute tremendously to the obesity epidemic in America.
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Price fixing is an agreement among business competitors to raise, fix, or otherwise maintain the price at which their goods or services are sold. The competitors do not necessarily have to agree to charge the same price. As long as some type of agreement is formed, it is illegal because it restricts competition. The agreement usually intends to push the price as high as possible, leading to profits for all of the sellers. Price fixing provides a mutual benefit for all the sellers involved at the expense of the buyers, who will pay high prices for inferior goods and services. setting a price to be charged only within a certain area in order to get rid of competition or to create a monopoly is also illegal under most state laws.
It is obvious that such practices would fall under a white collar crime category since there is no criminal tort involved it would be difficult for the branch of goverment in charge of monitoring such conspiracies. many can agree that making the rich richer while the poor will continue to make their selves poorer in effort to support companies that practice deviant acts of crime such as price fixing is highly unfair. Although anti-trsut acts aid to prevent companies from practicing bad ethics, and breaking laws, in this society it is only a matter of time before one innovates a way to benefit them selves once again, and manipulating the law during the process.
A very well known example where price fixing is present is in the oil industry.
Oil is a commodity that is in popular demand by a vast majority of society. this is mainly due to the fact that the choice of using a subsitute good is impossible. since crude oil is naturally, it is safe to say that there is a finite amount of oil in the world. With that in mind, an oil company can raise the price of oil due to their claim in scarcity. as many may know, as quantity demanded rises, the supply will reduce, thus causing a rise in price. An oil companies using this to their knowledge, have been known to set prices in effort to gain more from buyers, who are obligated to consume their oil. this also affects small businesses that are involved in the gas station business but not included in price fixing schemes in effort to force them out of business. the stress this puts on the economy by its entirety makes it ironic, since the rich will get richer, only taking money out of the lower classes pockets leading them to commiting acts of violent crimes. one can argue that the punishments imposed on the poor are far more harsh and long term affecting than penalties imposed on the rich. In recent cases, the goverment usually seems to be more satisfied with taking large amounts of money in the form of penalties from such unethical companies than put them behind bars; this is merely an act of poetic justice. Price fixing is not only present with oil companies but in other industries as well. such industries include pharmeceutical companies, and electronic companies. not only do they exemplify the many branches of white collar crimes, but tend to get away with them matching their law breaking conspiracies with unethical cover ups and
payoffs.
Question 2: How do consumer fraud, false advertising, and price fixing exemplify one statement of conflict theory or one statement of social learning theory? Consumer fraud, false advertising and price fixing as previously discussed play a big role in the society as well as the economy within the society. Each time something unethical is practiced, or a law is broken, society suffers the consequences in more long term effects. it can sometimes take months and even up to years to recover. Based on events that previously occured in society from the effects of white collar crimes and unethical acts, theories have been developed to explain why these immoral deeds are commited. One theory for example is the Conflict Theory. It is based on the theories of Karl Marx, which explains that individuals in groups within society have different amounts of resources. The more powerful groups use their power to their advantage in effort to exploit the group with less power, often observed in the rich vs. the poor.
Another theory used as a basis to describe human behavior in societies is known as the Social Learning Theory. It is based on the theories of Albert Bandura, which explains that people learn through observing others behaviors, attitudes, and outcomes of those behaviors. Similar to the concept of a young student observing a peer getting a high grade thus motivating the young student to achieve a high grade as well. In most cases, people who have commited a crime usually have similar traits or backgrounds as people who have commited similar crimes.
For this reason, the many statements that reinforce the Social Learning Theory can also reflect on the white collar crimes commited on a daily basis. As previously mentioned, Consumer fraud is a multi-billion dollar industry. It is obvious that the perpetrators that decided to commit such dishonorable deeds are mainly in it for the money, which has been an issue in society since the begining of economies. the "have-nots" are always dedicated to achieving The American Dream, especially when there is challenges along the way. However, an easy way out for the consumer fraudsters would be to avoid any challenges along the way, and make fast money. As stated under the Social Learning Theory, "Human behavior is organized around the seeking of pleasure, and the avoidance of pain" which can clearly relate to the motives behind consumer fraud.
Criminals who are in the business of ripping people off are always looking for an easy way out. Stealing someones hard earned money is easier than working for it their selves. The fact that robbing an elderly person for an entire life savings in some cases, or equity in their property clearly shows their avoidance in pain while inducing it into others. Although pleasure can be seeked in a positive way, many criminals may have been deprived in their upbringings, and perhaps never learned the way to obtain things in a legitimate way. This can also comply with another reinforcing issue of the Social Learning Theory which is, "Material reinforcements are often provided by crime itselt. Therefore, when individuals are deprived, criminal behavior may be maintained by its own rewards." It seemed more than likely that the mentioned factors under the Social Learning Theory can go hand in hand with consumer fraudsters due to the fact that not only are criminals seeking pleasure throghout the process, and avoidance of pain, but performing criminal acts to obtain not only what they need, but what they want. This may be due to a personal vendetta, or practiced because it may be the only thing they know to do, or might be good at.
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False advertising can also be briefly explained through a comparison of either the conflict theory, or the Social Learning Theory for many reasons. However in my opinion, I believe false advertising may fall under the statements presented under the conflict theory, which states "Once a group achieves dominance over others, it seeks to use available societal mechanisms for its benefit in order to assure that it remains dominant". We can conclude the this statement best exemplifies false advertisment due to the fact that many companies are always in competition with eachother. It is taught in marketing that many goals of companies are to gain a mechanism known as "the competitive advantage". This means that companies are constantly striving to be at "the top of the pyramid" so consumers would favor their products over its competitors.
Advertisments have been seen to cross alot of boundaries in order to assure that it will help to keep the goods or services advertised at a dominant position. this includes spending millions on ads such as "the super bowl" as well as using children as means of sending their messages abroad. Taking advantage of a young childs mind is a desperate cry for help to remain at a dominant level. Unfortuneately, using the children by advertising their products are practiced without remorse. fancy signage on stores, and exttravagant cereal boxes for example have been a way of capturing the eyes of the consumers without for consideration of what damage they might be causing, whether it be internal or external conflict within consumers and the society.
Hamburger Companies are constantly advertising oversized portions of foods, commercials of low priced menu items are exposed, and burgers on a shiny bun are constantly emphasized, while the product they are actually selling are merely video enhancements. Its competitors will do the samething with a minor addition, or zoomed up footage showing a better texture, or cooking procedure is suppose to cause viewers to favor their company instead, thus leading to another attempt at dominance over a competitor, and its competitors retaliation to that effect. A prime exemplification of the mentioned Conflict theory is also seen in busy streets of shopping areas. Stores in the same business neighboring eachother may have signs that compete to be bigger than their competitors, striving for the dominant position, or the "competitive advantage".
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Price Fixing was mentioned to be a cruel and un-trustworthy practice of poor ethics. Fixing the prices of a neccessity that society may sometimes be obligated to tolerate can also be compared to the many sub-theories found within the Conflict Theory. "Resources, both physical and social, are scarce and therefore in demand. It is the attempt to control these resources that generate the major portion of conflict in society" is a statement that best reflects the Price Fixing scheme. As earlier mentioned, a white collar crime can be classified as unlawful or unethical acts that are practiced for personal or organizational gain. Price fixing is a white collar crime mainly seen in large companies that choose to milk the pockets of consumers that are far less wealthier than the major organizations or companies.
An example of price fixing was emphasized on Oil companies that were regulating the sale of oil prices for their own personal gain. Crude oil which is only supplied by a limited amount of companies, that have access to only a finite supply of the natural resource is regulated by how its traded, and how much quantity is demanded. the Conflict theory Statement completely shows that the conspiracy to raise oil prices were affecting society physically, and as a whole, socially. Claiming that a natural resource like oil is scarce, can only innovate the idea that charging more is fair, making the people of society obligated to tolerate such acts of behavior, and prices. It may also go hand in hand with the Conflict Theories sub statement that "Control of resources creates power and that power is used to maintain and expand the resource base of one group at the expense of others". Causing a rise in gas prices has taken a hard impact on society, especially during times of war and natural disasters. Hitting the consumers in their pockets can hurt even more when economies are low due to these social factors. Some may be inevitable, and therefore the lower class of the society will do what they find neccessary to survive, thus creating conflicts.
Major companies on the other hand are at the highest level, looking down at the very people who help to bring them to the top. If not for controlling a market and practicing unethical acts of price fixing, once can conclude t hat there would be alot less conflicts in society providing that functionalism takes into play. Unfortuneately even the upper level of society has to be regulated by a higher authority due to a white collar crime such as Price Fixing, which absolutely exemplifies more than one theory under the Conflict Theory.
White Collar Crimes are practiced in many societies. Consumer Fraud can affect the U.S. in a major way, but can be practiced overseas while in the process. False Advertising is not only illegal in some scenarios but unethical as well. The way many companies choose to market can cause a great impact on society, causing repetitive conflics in societies, that can affect lives of people in many ways. Price Fixing not only affects society, but the economies of society which can lead to potential, long term crisis unless great responsibility is performed which is mainly theorized in many cases of the Conflict Theory. Not only are the three deviant crimes unethical, but clearly exemplify the conflicts of white collar crimes, and their relation to the Conflict theory, as well as the Social Learning Theory.