January 1996 Topics
Slamming, Rainmaker, Bad Faith,
Badge of Fraud, Fish Files, BK, and Factoring
 

Florists are the most common professionals
involved in factoring. They process credit card
transactions for money launderers and
keep up to twenty-five percent of each transaction.

 

Fraud In Other Words
Professional Jargon and Uncensored Street Slang
by Larry C. Adams, CFE, CPA, CIA, CISA

 

Slamming
Switching  a person’s long distance telephone company without the person’s knowledge. The slammer may use contests, prize giveaways, checks payable to the person, and other promotions to lure unsuspecting customers. The person may be unaware that their primary long distance carrier will be switched when they sign a contest form, endorse a check, or consent to a charitable donation. The switching authorization is usually buried in the small fine print, or printed in light ink, on the back of the form or check. The consumer seldom has the opportunity to compare the rates of their current phone service with the often higher rates of the new service. Many companies do not identify themselves; they might simply mention that they resell the service of AT&T. The consumer is often stuck with paying higher bills for the new service and paying the cost to switch back to their old service. The fast buck marketer refers to their easy prey as a “slam dunk.” Some customers “slam down” the receiver of their phone when they discover their phone service has been switched unwittingly. Slamming is the number one complaint received by the Federal Communications Commission (FCC). The FCC is adopting new rules to require the slammer to provide consumers with a piece of paper, separate from the promotion materials, authorizing a change in telephone service. For checks, the switching notice must be clearly and prominently marked on the front and the back of the check.

 

Rainmaker
A bright young star with a golden touch. A person who brings in lots of new paying clients for a company with little, if any, promotional effort by the company.
John Grisham, The Rainmaker, Doubleday, 1995.

 

Bad Faith
Intentional neglect or failure to fulfill an obligation. A conscious wrongdoing. Intentional deception, not an honest mistake or bad judgment.

 

Badge of Fraud
A fact of a transaction that creates suspicion and warrants further explanation. A red flag of a possible deception. An unusual circumstance, or multiple irregularities, such as false statements, transactions that are not normal for the business, insolvency, hidden relationships, transfers of property prior to lawsuits, or fictitious transactions.

 

Fish Files
Cases that lawyers wish they had never taken. They keep the files in a distant corner of their office or the bottom of a file cabinet, and the longer they sit, the worse they smell.

 

BK
Cool lawyer jive for a profitable bankruptcy case.

 

Factoring
A money laundering scam used by drug dealers, prostitutes, hustlers, and self-employed fraudsters to hide the source of their income. These scammers may accept credit cards for payment for some of their services or products. However, they do not have a legitimate credit card processing account approved by a bank, because they do not operate a socially sanctioned business. But, another business owner may process the credit card slips for them and take a cut of the proceeds for their problem. The factor or percentage will range from 5 to twenty-five percent of each transaction, depending on how much they want to do it, how well they know you, and how much they trust you. Florists are the most common professionals involved in factoring for other persons. The essential point is that the business has to have a clientele that not only pays by credit card regularly, but also uses the phone to do so. These credit card transaction slips are handwritten, rather than machine printed. Factoring usually violates the credit card company’s agreement. When factoring is suspected or discovered, the credit card company may freeze payments on the accounts to the business. Factoring often is discovered when a spouse or a parent calls the credit card company to complain about an unknown transaction on their billing.

 

ã Copyright 1996 Larry C. Adams. All rights reserved.
 

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