Corporate Thieves: Fraud by Stealth. AOL today hilites, under the heading "The $15 Ringtone", an article from SmartMoney.com about profoundly dishonest practices in corporate America that our various governments are doing nothing to stop. Three practices are specifically discussed: (1) pre-checked boxes for products or services you did not go to that webpage to order; Cure: uncheck everything but what you actually want; (2) free trial periods for services you don't want, which can be extremely expensive after the free period, and the cost of which will be billed at a later date, when you're not expecting anything, and may even be billed not to your credit card, where you might check for it, but to, for instance, your cellphone if you inadvertently sign up via a cellphone offer; Cure: apparently there isn't really any safe way to deal with this except NEVER to accept any further offer that pops up after you complete a transaction with a company that already has your credit-card information; and (3) text messages that sign you up for pricey services in order for you to get, for instance, a "free ringtone". The claim is that these things are shown in fine print in the television commercial where these ringtones and such are advertised, but there is no auditory nor text warning before you complete the action that you are signing up for an expensive service you do not want. The vendors aren't even required to send you a bill in the mail, with a notation on the outside of what might otherwise be discarded without opening as junk mail: "Your bill is enclosed."
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All these practices constitute fraud, and our governments co-conspire in such fraud by not forbidding "piggybacking" and not crushing fraudulent piggybacking thru huge fines to the corporations and long prison sentences for the executives responsible.
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Anti-piggybacking legislation would head off the problem without having to punish anyone, except for those who piggyback in defiance of the law. Anti-piggyback legislation would (a) in the case of an order by text message, forbid, for instance, a company from offering a free ringtone and then treating the text message that orders the ringtone as an order for a second product or service; (b) in the case of an order by webpage, would forbid checkboxes for additional products or services to appear on the same webpage as an order is placed for whatever the consumer wanted in the first place; such other offers could be made only on a separate webpage, where one would separately fill out credit-card information (and the first offer could not be made conditional on acceptance of the second; and (c) in the case of free-trial offers, would similarly require one to go to a separate website, or make a separate toll-free fone call, and fill out credit-card information separately. Only people genuinely interested in such offers would sign up, and corporations would incur no ill will nor criminal liability for fraud.
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Even absent anti-piggybacking legislation, however, there is of course a very quick fix to problems such as those hilited on AOL, as there is to every crime of profit (not passion): not just restitution, to the tune of treble damages (actual loss plus twice that in payment-as-apology), but draconian punishment, up to and including death for serious offenders. If a practice approved by the management of a company willfully defrauds anyone, there should be an automatic one-year prison sentence (with no parole) for EVERY member of the executive committee and EVERY member of the board of directors of that company, for EACH person defrauded. And the costs of that imprisonment are to be paid by the person imprisoned, or by the corporation if the individual cannot pay the full cost. (That should run anywhere from $25,000 to $50,000 per year per individual imprisoned, depending upon locale.)
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Any member of an executive committee or board of directors who votes against fraudulent schemes will still be punishable if s/he does not "blow the whistle" by reporting the illegal behavior to the authorities. Only resignation from the executive committee/board of directors AND reporting the illegal scheme (and possibly "wearing a wire" to gather evidence of further wrongdoing before resigning) would immunize members from imprisonment. How many criminally-inclined businesses would have executive committees or boards of directors of size if criminal wrongdoing of that business subjected each member of those groups to imprisonment?
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If more than 100 people are defrauded, as would produce a term of imprisonment of 100 years or more, then the death penalty should be substituted for every person so sentenced, because we cannot really expect any adult to live 100 years or more from the date of conviction, so they would die in prison anyway. There can be no justification for keeping such a person alive for fifty or more years. Even if the projected economic costs of such imprisonment were paid by the prisoner him/herself or by the offending corporation, there will almost certainly be some corporations that are destroyed by such costs and thus unable to pay; projected costs are not actual costs, which may run higher; and there are other factors to be considered, such as prison overcrowding, which inclines some judges to order early release of dangerous criminals, or requires society to build more prisons. Unless the law is drafted to include the cost of any new prisons that the incarceration of such corporate criminals would require, those costs would be borne by society, which is unfair to taxpayers — another victimization of the innocent by criminals. Moreover, some might escape prison at some point in that long sentence, as would require significant outlays of money and police effort in recapture. Etc.
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If we kill these criminals early, we can harvest their organs for decent people. If we let them die in prison of old age, we can't.
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How many schemes involving fraud-by-stealth do you imagine there would be if the penalty to corporate criminals were DEATH?
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(The current U.S. military death toll in Iraq, according to the website "Iraq Coalition Casualties", is 3,762 — for Israel.)




- posted by L. Craig Schoonmaker @ 5:43 PM