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Los Angeles Business Law Attorney for Consumer Fraud

Updated: Dec 5, 2022

Find A Business Litigation Lawyer for Fraud Claims Against Corporate Entities

Consumer fraud is an unreasonable, deceptive, or illegal business practice that benefits a corporation or individual at customers' expense. Banking, insurance, consumer goods and services, manufacturing and distribution of faulty products, and telemarketing are all examples of areas where consumer fraud can occur.

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1. Bank Fraud

Bank fraud is a major crime in California and in the United States. Fraud is difficult to spot. Most people only know they've been scammed after they've lost a significant amount of money. Banking fraud affects all customers which can be perpetrated by a bank clerk, financial advisor, or insurance agent representing a bank. An individual convicted of one count of bank fraud faces a federal prison term of up to 30 years.

Banking fraud can take place in a variety of ways:

  • Bank Fraud is the use of fraudulent methods to obtain money or assets from a financial institution is known as bank fraud. Bank fraud is committed by investment advisers, bank managers, and others who appear to be helpful.

  • Tax evasion occurs when an individual or company intentionally fails to comply with their legal obligation to file taxes.

A bank can sell an investment or financial product to a customer without fully revealing all of the product's details, or it can charge illegal and hidden fees in connection with a service.

Surrender costs and fees are not properly or adequately disclosed in insurance, financial or banking products, or savings, such as deferred annuities offered by a bank.

Consider the following examples:

  • Overdraft fees or other costs that the bank has arranged in a specific order to optimize charges to the customer

  • Customers or investors, like senior citizens, who are sold deferred annuities or other unsuitable insurance policies by bank brokers, financial advisors, or bank insurance agents

  • Selling unsuitable investments to customers (which may include insurance products and deferred annuities) is a breach of fiduciary duty. Unscrupulous bank employees who don't strictly follow the "know your customer" rule and recommend financial products with inappropriate risks or fees often target senior citizens.

Identity theft, fraudulent checks, phishing, forged banking documents, and credit card skimming are some of the most popular forms of bank fraud. As technology advances, the methods for illegally obtaining the money that is not yours evolve. Every year, a new scheme or scam emerges, causing hardworking people to lose their money. If you've been a victim of bank fraud, a Los Angeles Business Lawyer can help you build a case to get your money back.

What are "Annuities"?

Annuities are sometimes purchased as part of a well-rounded retirement package to provide a source of income after an individual has stopped receiving a paycheck. An annuity payout package can be set up for a short period of time or for life, and this is where the problem starts for senior citizens.

Any payout that is set up to be spread over a long time must have arrangements for what could happen to the remaining funds if the beneficiary dies or becomes incapacitated. Since the premium is charged upfront, the terms of the arrangement are critical to ensuring that the annuity purchaser does not lose money.

In most fraudulent annuity plans, insurance companies may attempt to persuade an elderly client to enroll in a costly or impractical plan (usually one with a higher premium and a longer payout period) to avoid paying out the whole premium and accumulated interest in the long run.

Rather than pushing you into a costly package that will not provide you with the fullest financial benefits, your bank can work with you to decide the right plan for your lifestyle and age.

2. Card Fraud

Certain credit card companies charge their cardholders for extra services without their permission or knowledge. Services can also be denied or canceled if the cardholder requires the services' benefits.

Such fraudulent practices include credit card companies failing to obtain written consent from cardholders and failing to provide required written statements before charging them. When credit cardholders discover fraudulent charges and call to report them, operators wrongly claim that the charges would not have been made if the cardholder had given their consent.

Understand the terms and conditions of your credit card

Despite recent federal regulations to protect consumers from deceptive practices, credit card companies continue to charge outrageous fees and bury their rules and regulations in the fine print. If you use credit cards, you now have many new and expanded protections against credit card companies' deceptive practices.

The Risks of Hidden Fees on Prepaid Cards

Prepaid cards, also known as reloadable cards, are promoted as a less expensive alternative to credit cards, debit cards, and conventional banking. Low-income consumers, those unable to obtain credit, and those with limited access to banking will benefit from these prepaid cards.

Prepaid cards boost the banking industry because an estimated 80 million people fall into one of these groups. On the other hand, prepaid cards come with a slew of fees that make them prohibitively costly. Consumers can become even more in debt due to these secret fees.

  • Fees for activation

  • Fees for upkeep

  • Fees for ATM withdrawals

  • Fees for balance inquiries

  • Fees for inactivity

Some prepaid card companies exacerbate the problem by unfairly reporting on the consumer's credit rating if the account is closed, locking them in a vicious loop.

Initiation fees, annual maintenance fees, cash withdrawal fees, fees to add funds, shortage fees and overdraft fees are among the prepaid card's secret fees. Some prepaid card companies exacerbate the problem by unfairly reporting on the consumer's credit rating if the account is closed, locking them in a vicious loop.

Although these fees can be disclosed in small print on the cardholder agreement, most prepaid card users do not read the fine print and are unaware of the various fees involved. Prepaid cards have the same appearance as regular plastic credit cards. Prepaid cards from leading discount retailers are among the best. A major credit card logo can appear on each of these cards.

Payday Loans

They are also known as payday lenders because they give borrowers in financial distress high-cost, short-term loans or cash advances. Predatory lenders prey on low-income borrowers and elderly people seeking Social Security payments. Some payday lenders charge borrowers interest rates of up to 400 percent or more on their payday loans. On the other hand, other payday lenders provide their borrowers with a line of credit on a prepaid card rather than cash.

The maximum amount a borrower can loan in California is $300. For this $300 loan, the maximum fee a lender can charge is $45, which equates to a 460 percent annual percentage rate on a two-week loan. On the other hand, a car loan is likely to have an interest rate of 8%. The payday loan industry is profitable for predatory lenders but financially crippling for consumers.

Unfortunately, this quick fix can lead to long-term ruin. Suppose a borrower does not repay the full amount of a payday loan or cash advance before the end of the period (usually two weeks). In that case, the lender will charge the borrower extra fees, and the borrower will not receive any additional funds.

Some payday lenders require borrowers to sign over their paychecks or social security benefits, giving them exclusive access to the borrower's earnings. Many unsuspecting borrowers, especially seniors and elders, are becoming entangled in a payday lender debt cycle.

Common Example of Insurance Fraud in California

  • Insurance, financial, or banking products/investments that do not correctly or fully report surrender charges or other penalties or that misrepresent or contain an illusory incentive or death benefit that penalizes the deceased and his or her relatives, such as deferred annuities.

  • Long-term care and life insurance fraud, including claims against insurance providers and brokers for long-term care and life insurance fraud. Please notify us if your premiums have been increased to an unjustifiable level.

  • Health insurance companies/HMOs/PPOs that offer unequal or disproportionately higher and possibly unjustified reimbursement rates for certain facilities or providers in-network versus out-of-network.

  • Discriminatory practices in issuing insurance policies and the number of premiums paid to minorities, women, and other protected groups of persons and failure to issue policies or denial of claims for these groups.

  • Insurance brokers purchase or replace insurance policies without reason to earn commissions.

  • Billing practices that cause a client or the government to pay more than they should (including Medicare and Medicaid fraud)

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Unethically Targeting Seniors

Unscrupulous insurance brokers and businesses often target seniors. Speak with a Business Litigation Lawyer if you believe you have been a victim of insurance fraud. We can easily assess your situation and notify you of your options.

Litigation About Annuity Abuse

Deferred Annuities, also known as fixed annuities, are long-term investments that typically do not enable withdrawals for 10-20 years or longer and can come with exorbitant fees if taken early. The buyer of these annuities usually pays a premium in exchange for a guaranteed rate of return for the first year.

Then, a lower minimum assured rate of return is given for the remainder of the annuity's life. The delayed receipt of money separates this form of an annuity from others. Furthermore, many annuities are written so that it is easy for financial practitioners or agents to overlook the technical specifics of the different fees and charges.

Unfortunately, annuities are increasingly being offered to senior citizens and the elderly aged 60 and over. Many of the funds available for annuity transfers are held by senior citizens who are enthralled by the prospect of a steady return on their money in a "safe" investment.

Long-term savings, such as annuities, are usually not considered a viable choice for elderly people who may need immediate access to their funds for medical treatment or other emergencies. Unfortunately, in many instances, payouts or withdrawals are not permitted before the annuitant has reached the end of his or her life expectancy.

What Are The Financial Annuity Lawsuits For Seniors And Elders About?

Lawsuits have been filed alleging that some insurance companies and banks target seniors and use scare tactics to persuade them to invest their life savings in deferred annuities, which may lock up savings for 10-20 years (even in the event of an emergency), carry exorbitant surrender charges and severe tax penalties, and complicate estate problem, among other things.

Annuities are often described as "guaranteed" and compared to "secure" money in the bank that pays a better return in appealing but deceptive sales pitches to seniors. The annuity contract's muddled terminology often obscures the crippling payments that can be incurred if money is needed to be withdrawn as the senior citizen ages.

Who Is Qualified To File A Financial Abuse Lawsuit On Behalf Of Seniors And Elders?

The cases are intended to be filed as a class action. You may be entitled to bring or enter a case if you are 60 years old or older (at the time of purchase) and have bought an annuity from a bank or after attending an estate or financial planning seminar.

Fraudulent Investments in Annuities

If people (including the elderly) are sold the wrong form of an annuity, they can quickly become victims of annuity fraud. If you believe you have been a victim of annuity fraud, you can arrange a free, confidential consultation with one of our pre-screened California Business Law Attorneys.

We will discuss your situation with you and provide you with expert legal advice that will help you.

How Do Annuities Work for California Senior Citizens?

Deferred Annuities, also known as Fixed Annuities, are long-term investments that typically ban or delay withdrawals for a period of 10 to 20 years. Early withdrawals from deferred or fixed annuities are often subject to exorbitant fees. When buying this type of annuity, they pay a premium in exchange for a "rate of return" normally guaranteed for the first year.

The minimum guaranteed rate of return normally decreases after the first year and remains low throughout the annuity's term. The delayed payment of the purchaser's money distinguishes deferred and fixed annuities from other types of annuities.

Furthermore, many of these annuities have policies and contracts that are designed to be perplexing. Unfortunately, this makes it possible for financial practitioners or agents to brush over or even ignore the technical specifics of various secret charges and fees.

Financial practitioners and annuity-issuing insurance providers are increasingly encouraging the increased selling of annuities to seniors and the elderly. Many senior citizens are enticed by the promise of predictable returns and "secure" investments, but the reality is that many long-term investments, such as annuities, are neither appropriate nor lucrative for them.

This is because elders may need unanticipated immediate access to their funds for various expenses, medical emergencies, or other reasons. Since deferred and fixed annuities enable the elder to wait a long time to access their funds, elders who buy these annuities will not be able to access or use their funds when they are needed. Most tragically, many annuities do not authorize payouts or withdrawals until far beyond the life expectancy of the elderly purchaser.

What Makes Annuities Unsuitable For Seniors In California?

Annuities and life insurance policies are typically designed to provide a return on investment after a long period, ranging from 10 to 20 years. Several of these annuities, particularly deferred annuities, can restrict a buyer's access to their initial investment paid for a long time.

If the annuitant wants to access his or her money during this period, he or she will be charged exorbitant and previously undisclosed surrender fees. Seniors are effectively trapped in deferred annuities due to these scenarios: they must either go without their money or pay exorbitant fees to access it. In the case of an unanticipated medical or financial emergency, this problem may be particularly devastating to seniors.

Another thing about annuities is that they typically pay out large commissions to the brokers who market them through banks or dubious "estate planning seminars." This increases the agent's desire to sell annuities and can create a conflict of interest when selling them to the elderly. Because of this possible conflict of interest, insurance firms and industries must specifically tailor their annuities to the needs of people over 60.

Defendants were supposed to have known or should have known about the unsuitability of the insurance policies targeted and marketed to seniors in previous litigation. This is why it is important to have an accomplished Business Law Attorney by your side.

Fraudulent Long-Term Care Insurance

Tax-eligible (TQ) and non-tax-qualified (NQT) plans are the two major forms of private long-term care insurance policies available in the United States.

A person must be unable to perform two or more ADLs and need treatment for at least 90 days to qualify for a tax-qualified program. Individuals with a significant cognitive disability, such as dementia, Alzheimer's, or certain forms of neurological disorders, are also eligible for tax-qualified policies. A doctor, in general, is expected to create a treatment plan. The most common form of private long-term care insurance policy is one that is tax-qualified. These policies' incentives are not taxable.

A patient's doctor must claim that the patient requires treatment for a medical purpose in a non-tax-qualified policy, and the policy would cover the care. Non-tax-eligible plans have fewer eligibility requirements, but since the benefits may be taxable, individuals who obtain them may face substantial tax bills.

Long-term insurance plans, both tax-qualified and non-tax-qualified, may have very high premium payments, which begin to rise as the buyer gets older. As a result, elderly people who need to buy long-term care benefits will be forced to choose between paying high premiums or paying for costly long-term care on their own. It's important to read through all of the fees and agreements in every private long-term care program before buying it.

Scams in Long-Term Insurance

Unfortunately, the increased popularity of long-term insurance policies has resulted in several schemes and deceptive activities involving selling long-term insurance and alleged long-term insurance products.

Since most people who buy long-term insurance are elderly, these con artists specifically target them. The following is a list of items to keep an eye out for.

A. Inappropriate Policies

To maximize benefits, dishonest people who want to sell insurance products to seniors will often try to sell the wrong form of insurance.

  • Attempting to sell insurance plans with excessively high premiums

  • Attempting to sell two overlapping policies when only one is required

  • Scaring low-income seniors into believing that their low income would preclude them from accessing long-term care without an insurance policy are an example of this

B. The process of churning

When an insurance salesperson or company tries to persuade a policyholder to cancel an existing policy and replace it with a new one, this is known as churning. When discussing the new policy, churners will use words like "trade up" or "upgrade" to confuse the prospective customer when the new policy might be more costly and provide little change over the original policy. Furthermore, by transitioning to a new policy, the customer must forfeit the premiums charged on the previous one, and the previous policy's benefits will be denied due to new pre-existing conditions.

C. Watered Coverage

In a "watered coverage" scenario, as opposed to "unsuitable plans," an insurance provider or seller will deliver an enticingly low premium by removing or reducing the policy's essential features. These cuts and eliminations may have serious consequences, such as denial of vital medical benefits and coverage or exposure to extraordinarily high out-of-pocket costs.

D. Exaggerated Benefits

A policy can claim to cover more than it specifies in the contract's fine print. Be cautious of proposals that seem to be "too good to be true" – they almost always are.

E. Misstatements in the Application

An insurance salesperson can misrepresent a client's facts, such as age or medical history, to lower the premium, similar to cases of "watered coverage." These activities are unconstitutional, and the policy could be revoked as a result. In addition, the individual whose information has been misrepresented can face criminal charges.

F. Fraudulent Policies

Finally, it is important to be mindful of the possibility of phony or misleading insurance plans and coverage. These swindlers take a potential buyer's deposit and give them nothing in exchange. One way to stop these scams is to consult with your state insurance department to ensure that the insurance firm is accredited and financially solvent in your state.

Consider one of our prescreened California Lawyers in your California Attorney Search.

3. Wage Claims vs. Companies

California's wage and hour law is both complex and easily abused. You have some privileges and entitlements as an employee, and it is illegal to violate them. You could be entitled to compensation and fines if your employer has broken salary and hourly laws. It's important to ensure you're getting fair and accurate pay and benefits from your employer.

Some of the most famous wage and hour class statements are as follows:

  • Exempt from Overtime Misclassification

  • Work Done "Off the Clock"

  • Methods for calculating incorrect overtime

  • Refunds

  • Violations of the Minimum Wage

  • Breaks for meals and rest

  • Forfeitures of vacation and sick leave

  • Wage Deductions That Aren't Right or "Chargebacks"

  • Wage Statements That Aren't Right

  • Reimbursement of Expenses

  • There are two types of lawsuits: wage breaches and claims involving time off

Violations of Meals and Rest Periods

For each full-time (eight-hour) day of work, employees are entitled to one lunch break and two rest breaks.

Any 6-hour shift requires one 30-minute meal break, with another 30-minute meal break required if the shift exceeds 10 hours. When an employee is off-duty, meal breaks are unpaid, but your boss can be expected to pay you if you are on duty or on standby during your break.

In addition, for every four hours of work, each employer must have two paid off-duty 10-minute rest breaks.

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Forfeitures of Sick Leave / Medical Leave

Employees in California are allowed to take leaves of absence under the Family and Medical Leave Act (FMLA) and the California Family Rights Act (CFRA) for the following reasons: pregnancy, medical treatment, caring for a family member, and adoption.

Although employers are not currently mandated to have paid sick leave, the Department of Fair Employment and Housing requires that sick leave be job-protected. This ensures that if you need to take time off for medical or family reasons, you can return to the same or a similar position when your leave is over. Section 12945.2 of the California Government Code describes "family care and medical leave" as follows:

  1. Leave for the birth of an employee's child, the placement of a child with an employee in connection with the employee's adoption or foster care of the child, or the severe health condition of an employee's child.

  2. Taking time off to care for a parent or spouse who is suffering from a serious illness.

  3. Leave taken for a severe health condition that prevents an employee from performing the duties of their job, except for leave taken for disability due to pregnancy, childbirth, or other associated medical conditions."

Taking Care of Family

Employers with sick leave must follow Section 233 of the California Labor Code. This provision states that an employee can use his or her own sick leave hours "to attend to the illness of a child, parent, spouse, or domestic partner." All conditions and privileges that apply to the employee's use of sick leave for himself or herself will apply to the employee's use of sick leave for their families under this code. This allowance is also known as "kin treatment."

Suppose the employer hires less than 50 workers within 75 miles of the worksite. In that case, an employee with more than 12 months of service and at least 1,250 hours of service with the employer may take up to a total of 12 workweeks in any 12-month period for family care and medical leave under CA Government Code Section 12945.2.

Travel Reimbursement for Employees

Any non-commuting travel expenses incurred by the employee while on the job must be reimbursed by the employer, according to California Labor Code 2802. The "California mileage reimbursement rate," as it is known, is 58.5 cents per mile, according to the state's Department of Labor Standards Compliance. Non-travel costs, such as mobile phone and computer use, as well as office supplies, are covered by Section 2802 of the Labor Code to the degree that they are all used for work.

Employees in California are covered by the law.

Under state law, employees in California are protected from wage and hour breaches by their employers. According to the California Labor Code, workers must be compensated for overtime hours worked, and employers must allow employees to take daily meal breaks and rest periods at fixed intervals. In most cases, when an employer fires an employee, the employer is required to pay all wages immediately.

When Civil Penalties Are Involved

Civil penalties may be levied on employers who are found to be in breach of wage and hour laws under LC SEC. 2698 AND 2699.5. According to the statute, employees who win civil cases against their employers are also entitled to fair attorney's fees and expenses.

Compensation for Overtime

The workday is described by LC SEC. 510 (A) as eight hours in a single day. Overtime hours should be paid at one and a half times the normal hourly wage for employees who work more than eight hours per day or forty hours per week. Employees who work more than twelve hours in a day should be paid twice their normal hourly wage for the extra time employed. Employees who work seven days in a row should be paid double for hours worked more than eight on the seventh day.


Employees are entitled to a thirty-minute meal break after five consecutive hours of work, according to LC 512 (A). Employees are entitled to two thirty-minute meal breaks if he or she works a ten-hour day. If the employee's workday may not exceed six hours, the meal break can be waived if both the employee and the employer agree. In situations where the workday is longer than twelve hours, the second meal break can be waived if both the employer and the employee agree.

Breaks for Meals

According to LC SEC. 226.7, an employer may not force an employee to work during a meal break. If an employer breaks the rule, the employee is entitled to one hour of regular pay for each day the meal break was not taken.

Wages Due Upon Termination of Employment

In most cases, an employer is obligated to pay workers all salaries owed upon the termination of jobs, including unused paid sick leave, holidays, and holiday pay. When employment is seasonal, there are several exceptions, but the legislation also requires the employer to pay within 72 hours. According to LC SEC. 226, the employer must also have itemized pay statements.

What to Expect and What to Do

Suppose an employee claims her employer has violated her rights under the California Labor Code. In that case, she should notify the Labor And Workforce Development Agency (LWDA) and her employer in writing of the specific violations, providing a thorough explanation of the alleged incidents and breaches.

Within thirty days, the LWDA will inform the employee that it will not respond to the complaints. If the employee does not obtain a notice from the LWDA that it intends to respond to the complaints after thirty-three days, the employee will file a civil suit against the employer.

Find a Best Business Attorney In Los Angeles for Consumer Fraud Cases is a California Bar Association Certified Lawyer Referral Service that can refer you to a pre-screened Business Litigation Attorney to handle your case. Submit your case details through our consultation form or contact us through our 24/7 live chat for a free assessment.


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