Bait and Switch Schemes
Another classic example of consumer fraud is referred to as the “bait and switch.” This occurs when a company advertises a low price on a product, then when customers try to purchase the product they are informed that the cheap item is out of stock and offered a more expensive alternative. For the mail or wire fraud statute to apply, such fraud has to be conducted or furthered through the use of the United States postal service or interstate wire.
The main problem with prosecution of a bait and switch fraud scheme is proving what the consumer was actually defrauded of? Often this question is answered when courts take lost time or customer expectations into account. Such intangible property rights have been recognized as sufficient. This is another area where it is important to remember that the majority of courts find no concept of a de minimis violation in the mail and wire fraud statutes. While such conduct is often pursued as a civil claim, if the scheme is repetitive and affects enough consumers, it could result in a criminal wire fraud or mail fraud prosecution.