How Does Business Fraud Affect the Consumer?

<h1>How Does Business Fraud Affect the Consumer?</h1>Author: <a title="Tom Powell" href="http://www.articlesbase.com/authors/tom-powell/270785.htm">Tom Powell</a> Business fraud is an act that is illegal which is usually done in order to save or make money by way of deception. Business fraud does not only affect the government, specifically the tax man although this does depend on the type of business fraud being used, but also affects the consumers of that company as well as the shareholders. Although the word consumer is thrown around in the world of business today, it does have a strong and rather large meaning. Not only does a consumer mean a person who is actually buying the product or using the service but it also means the people who are involved in that business and have a stake in it. The companies most affected by business fraud are firstly the government, as it is usually some kind of tax evasion, and secondly the businesses dealing with this fraudulent company. The reason business fraud has such an affect on surrounding businesses is the fact that not only are all fraudulent businesses eventually found out, but also that along with a fraudulent business comes a stigma that surrounds the companies it has dealt with in the past. This stigma can then cause contracts to crumble due to other businesses not wanting to deal with a company that has been connected with such things. However, this is only the businesses side of things; the consumers suffer as well if only due to inconveniences. A good example that shows the effects of business fraud is this: Picture a business selling toys for 10 years, this business has been selling its products as 100% hand made in the UK. However, the truth is that these products have been imported and sold as a lie. This company has now been found out and with it the business is shut down, the shareholders loose the money in what they thought was a legitimate shop and the suppliers loose a somewhat valuable customer (in this case their customer is the business). This spreads on however, as the people who had bought such products now feel as though they have been tricked and yet they have no way of getting their money back. This scenario may sound outlandish to some, but it is something that has happened many times in the past. Business fraud, as shown, affects everyone that they have ever been associated with and is one of the biggest issues which causes' economic instability today, costing the UK over 14 billion pounds every year. Fortunately there are many safe guards put in place in order to stop business fraud before it can affect so many people. The main act that has allowed the government to act aggressively against this threat is the Serious Crime Act 2007; using this act the CIFAS (Credit Industry Fraud Avoidance System) can share information on possible fraudulent activities made by businesses. By using this information correctly safeguards can quickly be put in place to stop loop holes in legislation and in business contracts. This legislation alone has stopped thousands of <a href="http://www.begbies-traynorgroup.com/investigations/our-services/investigations/fraud.aspx">business fraud</a> attempts and hopefully, with time business fraud will be a thing of the past in the UK. Article Source: <a href="http://EzineArticles.com/?How-Does-Business-Fraud-Affect-the-Consumer?&id=3075474"><a target="_blank" href="http://EzineArticles.com/?How-Does-Business-Fraud-Affect-the-Consumer?&id=3075474">http://EzineArticles.com/?How-Does-Business-Fraud-Affect-the-Consumer?&id=3075474</a></a>About the Author: <a href="http://ezinearticles.com/?expert=Tom_V_Powell"><a target="_blank" href="http://EzineArticles.com/?expert=Tom_V_Powell">http://EzineArticles.com/?expert=Tom_V_Powell</a></a>Article Source: <a href="http://www.articlesbase.com/">ArticlesBase.com</a> - <a href="http://www.articlesbase.com/ethics-articles/how-does-business-fraud-affect-the-consumer-1397276.html" title="How Does Business Fraud Affect the Consumer?">How Does Business Fraud Affect the Consumer?</a>

Business fraud is an act that is illegal which is usually done in order to save or make money by way of deception. Business fraud does not only affect the government, specifically the tax man although this does depend on the type of business fraud being used, but also affects the consumers of that company as well as the shareholders.

Although the word consumer is thrown around in the world of business today, it does have a strong and rather large meaning. Not only does a consumer mean a person who is actually buying the product or using the service but it also means the people who are involved in that business and have a stake in it. The companies most affected by business fraud are firstly the government, as it is usually some kind of tax evasion, and secondly the businesses dealing with this fraudulent company.

The reason business fraud has such an affect on surrounding businesses is the fact that not only are all fraudulent businesses eventually found out, but also that along with a fraudulent business comes a stigma that surrounds the companies it has dealt with in the past.

This stigma can then cause contracts to crumble due to other businesses not wanting to deal with a company that has been connected with such things. However, this is only the businesses side of things; the consumers suffer as well if only due to inconveniences.

A good example that shows the effects of business fraud is this: Picture a business selling toys for 10 years, this business has been selling its products as 100% hand made in the UK. However, the truth is that these products have been imported and sold as a lie. This company has now been found out and with it the business is shut down, the shareholders loose the money in what they thought was a legitimate shop and the suppliers loose a somewhat valuable customer (in this case their customer is the business). This spreads on however, as the people who had bought such products now feel as though they have been tricked and yet they have no way of getting their money back.

This scenario may sound outlandish to some, but it is something that has happened many times in the past. Business fraud, as shown, affects everyone that they have ever been associated with and is one of the biggest issues which causes' economic instability today, costing the UK over 14 billion pounds every year.

Fortunately there are many safe guards put in place in order to stop business fraud before it can affect so many people. The main act that has allowed the government to act aggressively against this threat is the Serious Crime Act 2007; using this act the CIFAS (Credit Industry Fraud Avoidance System) can share information on possible fraudulent activities made by businesses.

By using this information correctly safeguards can quickly be put in place to stop loop holes in legislation and in business contracts. This legislation alone has stopped thousands of business fraud attempts and hopefully, with time business fraud will be a thing of the past in the UK.

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