Penalties and Charges Against Coupon Fraud are Real


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Recently I received a message from a friend asking me if I could help her with an issue.  She was wanting to help a friend with basics of how to start couponing, and as she did, she got into this situation. This person started arguing with her about the right and wrongs of couponing policies, and coupon ettiquette. She told her that there were rules and ethics to follow when using coupons, but her friend challenged her and boasted that there are no rules and if so, who governs them? Where is this written? Will someone get arrested if they break the rules? Basically, she was telling her that if she got away with it, too bad!

Of course, the first thing we want to say is “Really?! Read a coupon!”  This opens up so many feelings and questions like “Don’t you have a conscience?”  As most of us know, the rules of the coupon are plainly stated on it, 99% of the time, but for those out there who want the written proof that screwing the system IS against the law~ here it is.   In researching this topic for her, I went directly to the CIC (Coupon Information Corporation) where the laws and the policies are written in black and white for all to see.  The CIC investigates and exposes fraud schemes, and cases involving more than $750 million have been exposed by them.

If people knowingly misuse coupons, and do not abide by the rules stated on the coupon or if they partake in fraudulent dealings or theft, they can face many charges.  In many jurisdictions misuse of coupons is a form of business Fraud.

Fraud: A false representation of a matter of fact—whether by words or by conduct, by false or misleading allegations, or by concealment of what should have been disclosed—that deceives and is intended to deceive another so that the individual will act upon it to her or his legal injury. Fraud is commonly understood as dishonesty calculated for advantage. A person who is dishonest may be called a fraud. In the U.S. legal system, fraud is a specific offense with certain features.

You can also face theft charges of you choose to obtain coupons or inserts in unethical ways. Recently a woman from Texas was arrested after police say she stole coupon inserts from a newspaper stand.  She’s charged with “Fraudulent Destruction or Removal or Concealment of writing for taking more coupon inserts than she purchased”. She faces up to $4,000 in fines and up to one year in jail.  Another woman was charged with Larceny, the offense of illegally taking property, for stealing newspapers out of a vending machine.  Another 34-year-old woman from Arkansas was arrested on a misdemeanor charge of larceny theft. She was accused of stealing copies of old Sunday newspapers in order to increase her stash coupons. There are many more documented cases of those who have not used or obtained coupons correctly, and you can read about some of them here on the Coupon Information Corporation website or all over the internet.

There are also penalties for for copying or producing counterfeit coupons. Counterfeiting  or copying coupons is exactly the same as counterfeiting or copying money. It is against the law and those convicted of this fraud can be fined in excess of $200,000 with the highest on record being $5,000,000. The longest prison sentence on record for these crimes up until now is 17 years.

For those out there who are using coupons for items to stock rummage/garage sales or flea market booths, that is also against the law.  Using coupons to obtain free items, and then reselling them violates the terms and agreements of the manufacturers who provide them.  Depending on the terms of the coupon/manufacturer agreement, by using their coupons, you have agreed to abide by the terms.  Not using them properly can cause you big problems when you are contacted by the IRS wanting their share.  And don’t be surprised when the local authorities show up at your doorstep wanting to see your license for reselling.

As far as Shelf Clearing or buying unethical numbers of items that one could never used in a lifetime, it’s all on the Conscience at that point.  It’s not against the law, but it’s against people’s upstanding values. Don’t be mislead by greed. Knowingly using coupons to purchase other items, de-coding bar codes or lying about price matches are all UNETHICAL practices, and hurt the store that you are shopping with.  Practices like this make manufacturers/stores chance policies and in the long run, hurt all Couponers.  Doing these things will come back and bite you, and make you look bad to many as you boast about it.

Bottom line. DON’T DO IT. If you are new to couponing, read up on the ethics and the rules on the Coupon Information Corporation website or on our site, Coupon Wizards.  And, go with your gut.  If you get a bad feeling about something having to do with a coupon, research it first, read the coupon, and ask questions.   This isn’t a Monopoly Game.  There is not a “Get out of Jail” Coupon.

****If you see fraudulent coupon usage, theft or counterfeiting you can contact the FTC (Federal Trade Commission) who work to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint visit ftc.gov or call toll-free, 1-877-FTC-HELP.
To report issues to the Coupon Information Corporation, you can fill out this form, or contact them at  (703) 684-5307.

 


Comments

  1. So, I’ve also read that selling coupons/inserts is also illegal, such as selling them on ebay or buying them from clipping services. Where does that leave Insert Insanity? Check out this article…

    http://jillcataldo.com/no_more_selling_coupons

  2. And the following quote came directly from the CIC web site:

    “Buying coupons. When a person buys coupons, they may be inadvertently purchasing stolen property or counterfeit coupons. Even if there is not a direct criminal penalty involved, both coupon buyers and sellers open the door to potential litigation when they buy or sell coupons because they are in violation of the “nontransferability” clause printed on all coupons distributed within the United States. The transfer makes a coupon void. Coupon sellers often include legal disclaimers stating that they are selling their time, a service, or even envelopes that just happen to contain coupons instead of the coupons themselves. Such statements are invalid and do not offer any legal protection. Rather, such statements suggest that the sellers know that their coupon sales are inappropriate and wrong.”

    Here is the direct link:

    http://www.couponinformationcenter.com/consideratecouponswebsite.php?st=04612

    • The Wizard says:

      My question is how are you able to buy the paper with the coupons in it and not be violating “transferability”???

  3. According to this article and the cic (which is not even a website backed by any authorities instead owned and operated by one person who is well known on some forums) then by insert insanity and wizclipz selling coupons is also perpetrating a fraud when it is stated right in the coupon not to be resold or transferred? Seems a little hypocritical i think in that case.
    As for resellers, Show me one case where someone was arrested for reselling a item. It is not like software etc that is licensed, ownership changes hands when purchased. While the companies may not like it doesn’t mean it breaks any statutes.I understand charges against people who steal coupons or counterfeit but I highly doubt authorities are going come to someone’s house to drag them off looking for a reseller license.

    • The Wizard says:

      Brianna, you are mis-informed about Insert Insanity and Wiz Clipz. They are the only two sites of their kind that are flat priced. The cost of the paper, the cost of the labor and the cost of the shipping are built in and do not fluctuate from week to week unless the shipping cost is higher due to the number of inserts. It’s no different than giving your friend 20 bucks and telling them to go to the store and get you a few papers when they buy theirs. I could see if we changed our pricing from week to week, but we have intentionally NOT done that so there was no question as to whether we are selling a service or we are selling coupons. So, there is no hypocrisy here at all. We set our business up around being a service and not selling merchandise.

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