White collar crimes are unique in that they are typically perpetrated by business and government professionals. These offenders are much more removed from the harm inflicted by their actions, but these crimes are far from victimless.
On the contrary, the effects of white collar crimes are widespread. Enormous financial and employment losses permeate the entire economy. Seven crimes whose seriousness is often downplayed are listed below.
Credit Card Fraud
This type of fraud occurs when a criminal buys merchandise with an unauthorized credit card. Cardholders typically have safeguards against such unauthorized transactions, but merchants are forced to accept the full liability of losses. To make up for these losses, merchants typically factor in these losses into the cost of their goods and services.
Ultimately this type of white collar crime causes prices to go up for everyone, and the losses are passed onto law-abiding consumers. In 2012, credit card fraud causes around $11.27 billion in losses that eventually got paid for by all of us.
Hacking has become a common household world in modern times. Fraudsters can easily steal information like bank account information, social security numbers and phone numbers by infiltrating your computer network or internet connection. Any company that collects payment or information online is vulnerable to instances of computer fraud.
North American ecommerce merchants lost an average of 3.6 percent of sales to online credit card computer fraud in 2000 alone. There is an entire black cyber market dedicated to selling stolen information to fraudsters online, so even if the computer thief doesn’t intent to use your information, it is likely they will sell it to someone who will.
This type of fraud happens when an individual or business falsely claims bankruptcy in order to cut their losses with a failing company. In this way, the person at the top of the business can make money while forcing the loss onto everyone else.
This reduces the public confidence in the system the more often this type of crime occurs. According to the IRS and the United States Bankruptcy Court, over 1.2 million individuals and companies filed for bankruptcy in 2012.
This is the illegal release of pollution into the environment. This type of white collar crime has potentially the most far reaching and devastating implications for our planet than any other type of crime. According to the United Nations, this type of crime is the biggest challenge facing the planet today This crime produces costs at nearly every level: political, social, economic, and environmental.
Stock market trading is supposed to be fair and it is against the law for someone to use confidential or advanced information to trade shares for monetary benefits. Some information can give certain traders an unfair advantage by knowing ahead of time something that will affect the company’s stock price. In this way, these fraudsters can influence the stock value and profit unfairly. When insider trading occurs, everyone without the advanced knowledge usually spreads the losses.
This type of crime occurs when money, or political favors, are promised to an individual or company in exchange for cooperation. When bribery occurs at congressional levels, laws can be passed which strongly favor company rights over all other considerations including personal rights and even environmental rights.
Ponzi schemes occur when one encourages investors to dump money into a false business venture with the promise of future returns. Rather than investing the money, the dividends are paid with new investor’s money. Bernie Madoff made this crime famous when he was arrested in 2008. His crimes ultimately resulted in the loss of billions of dollars and three individuals committed suicide.
White collar crimes are probably more serious than you thought.