Safety and Health Reporter
Brien Roche Law > Blog > Intentional Torts > Fraudulent Misrepresentation

Fraudulent Misrepresentation

Fairfax Injury Lawyer Brien Roche Addresses Fraudulent Misrepresentation

Brien Roche

Fraud in the legal context is a frequently misused allegation.  Fraud, or what is also called fraudulent misrepresentation,is somewhat akin to lying.  However, from a legal point if view it is slightly different.  Technically what fraud is is an intentional misrepresentation of an important fact which is made for the purpose of inducing someone to rely upon it and which in fact then does result in that person relying  upon it and thereby incurring some damage or injury. As an intentional tort  fraud is to be distinguished from a negligent tort such as personal injury resulting from negligence. Fairfax  injury attorney Brien Roche handles both intentional and negligent tort claims.

The first important element of a fraud claim is simply that of intent.  Fraud is not a result of negligence or mistake or mishap.  It is the result of someone intentionally telling an untruth.

In addition to actually telling the untruth, the person to whom it is told then must reasonably rely upon it.  If I tell you that the sky is falling, can you reasonably rely upon that?  The answer is probably no because all you have to do is look up and see that the sky is not falling.

If on the other hand I tell you that there is a fire in your house and you happen to be a block away from the house and as a result run back to the house to put the fire out and in the course of doing so fall down and break your leg, then you have justifiably relied upon my statement that  your house was on fire and you acted upon that to your detriment, i.e. breaking  your leg.  That type of fraudulent statement conceivably could be actionable, i.e. giving you a basis for making a civil claim against the person who made the false statement.

Another important element in a fraud claim is that the statement that is made must be something that is material or important.  In one decision reported by the Virginia Supreme Court a tenant alleged a criminal assault at or near the premises where he resided and that he had been induced to enter into the lease for these premises based upon fraudulent statements made by employees of the landlord concerning the development being crime free.  At the time of this assault, the tenant had actually resided in the development for over a year and as such any purported statements made by the employees were deemed to be simply too remote or unimportant to give rise to any liability on the part of the landlord for fraud.

In addition, as an element of fraud, it must be proven that the statement is one of fact and not simply one of opinion.  For instance, if a seller of an automobile makes a statement that the vehicle was in excellent condition, that is a statement of opinion in the nature of puffing and is not a statement of fact.

Fraudulent Misrepresentation Upon Elders

There is a division within the Consumer Financial Protection Bureau (CFPB) that is designed explicitly to prevent fraud upon elders.  That office is known as the Office for Older Americans. 

During the recent financial crisis, Americans 55 and older lost approximately 40% of their net worth.  Part of this was simply due to the down-turn in the various markets.  Some of it was due to actions of scam artists and other people that simply intended to defraud older citizens. 

This problem is frequently compounded by the fact that older people make the problem worse in that they are reluctant to admit that they have been exploited.

The office within the CFPB is attempting to create a network that can relay information from state to state and from locality to locality as to what types of plans work in order to protect older citizens.

One of the major areas of fraud is reverse mortgages in that many older citizens do not understand that by taking a lump sum out they thereby are not going to be entitled to any further money down the road and further many of them do not understand that even though they may not have to make a mortgage payment anymore, they do have to pay taxes and insurance.

The Office for Older Americans at CFPB is currently headed by Skip Humphrey, who is the son of former Vice President Hubert Humphrey.

He offers several bits of advice:

  • If you are dealing with a financial advisor make sure that you fully understand the advisor’s commission structure and make sure that you verify that the individual is properly licensed.
  • If you do not have a Power of Attorney then you probably need to give a Power of Attorney to a family member or someone else that you have complete trust in.  The Power of Attorney can be a very powerful document but it can also be a very helpful document if in fact you become disabled in some way.
  • If you have any doubt in terms of the bona fides of a financial advisor or mortgage counselor then check other sources to make sure the information they are providing is correct and.

The CFPB maintains a very excellent website at www.ConsumerFinance.gov which contains a variety of information and also can be the site where you can file a complaint if you wish to.

Fraud Scams Involving Bank Withdrawals

Available bank deposits may not necessarily always be available.  Under a recent decision from the U. S. Court of Appeals for the Second Circuit involving a law firm and Citibank the Court concluded that even though a bank deposit had been listed as being available to the depositor that did not necessarily mean that it was available with impunity.  In this particular instance a law firm deposited money from a new client into its trust account.  The client then asked for a remittance of some of the money.  The law firm checked with the bank to see if the funds were “available”.  The bank informed the law firm that the funds were available which to the bank meant simply that the law firm could draw against the funds but that did not mean that the funds were guaranteed by the bank.  It turns out that the check that was deposited  in fact bounced.  By the time that the depository bank had been advised of that the law firm had already wired the bulk of the funds out to the client and to a third party.  Once the check was dishonored or bounced then the law firm was on the hook for the entire amount of the funds that had been wired out which was approximately, in this case, one quarter of a million dollars.

Comments are closed.

Contact Us For A Free Consultation

Fraudulent Misrepresentation

Fairfax Injury Lawyer Brien Roche Addresses Fraudulent Misrepresentation

Brien Roche

Fraud in the legal context is a frequently misused allegation.  Fraud, or what is also called fraudulent misrepresentation,is somewhat akin to lying.  However, from a legal point if view it is slightly different.  Technically what fraud is is an intentional misrepresentation of an important fact which is made for the purpose of inducing someone to rely upon it and which in fact then does result in that person relying  upon it and thereby incurring some damage or injury. As an intentional tort  fraud is to be distinguished from a negligent tort such as personal injury resulting from negligence. Fairfax  injury attorney Brien Roche handles both intentional and negligent tort claims.

The first important element of a fraud claim is simply that of intent.  Fraud is not a result of negligence or mistake or mishap.  It is the result of someone intentionally telling an untruth.

In addition to actually telling the untruth, the person to whom it is told then must reasonably rely upon it.  If I tell you that the sky is falling, can you reasonably rely upon that?  The answer is probably no because all you have to do is look up and see that the sky is not falling.

If on the other hand I tell you that there is a fire in your house and you happen to be a block away from the house and as a result run back to the house to put the fire out and in the course of doing so fall down and break your leg, then you have justifiably relied upon my statement that  your house was on fire and you acted upon that to your detriment, i.e. breaking  your leg.  That type of fraudulent statement conceivably could be actionable, i.e. giving you a basis for making a civil claim against the person who made the false statement.

Another important element in a fraud claim is that the statement that is made must be something that is material or important.  In one decision reported by the Virginia Supreme Court a tenant alleged a criminal assault at or near the premises where he resided and that he had been induced to enter into the lease for these premises based upon fraudulent statements made by employees of the landlord concerning the development being crime free.  At the time of this assault, the tenant had actually resided in the development for over a year and as such any purported statements made by the employees were deemed to be simply too remote or unimportant to give rise to any liability on the part of the landlord for fraud.

In addition, as an element of fraud, it must be proven that the statement is one of fact and not simply one of opinion.  For instance, if a seller of an automobile makes a statement that the vehicle was in excellent condition, that is a statement of opinion in the nature of puffing and is not a statement of fact.

Fraudulent Misrepresentation Upon Elders

There is a division within the Consumer Financial Protection Bureau (CFPB) that is designed explicitly to prevent fraud upon elders.  That office is known as the Office for Older Americans. 

During the recent financial crisis, Americans 55 and older lost approximately 40% of their net worth.  Part of this was simply due to the down-turn in the various markets.  Some of it was due to actions of scam artists and other people that simply intended to defraud older citizens. 

This problem is frequently compounded by the fact that older people make the problem worse in that they are reluctant to admit that they have been exploited.

The office within the CFPB is attempting to create a network that can relay information from state to state and from locality to locality as to what types of plans work in order to protect older citizens.

One of the major areas of fraud is reverse mortgages in that many older citizens do not understand that by taking a lump sum out they thereby are not going to be entitled to any further money down the road and further many of them do not understand that even though they may not have to make a mortgage payment anymore, they do have to pay taxes and insurance.

The Office for Older Americans at CFPB is currently headed by Skip Humphrey, who is the son of former Vice President Hubert Humphrey.

He offers several bits of advice:

  • If you are dealing with a financial advisor make sure that you fully understand the advisor’s commission structure and make sure that you verify that the individual is properly licensed.
  • If you do not have a Power of Attorney then you probably need to give a Power of Attorney to a family member or someone else that you have complete trust in.  The Power of Attorney can be a very powerful document but it can also be a very helpful document if in fact you become disabled in some way.
  • If you have any doubt in terms of the bona fides of a financial advisor or mortgage counselor then check other sources to make sure the information they are providing is correct and.

The CFPB maintains a very excellent website at www.ConsumerFinance.gov which contains a variety of information and also can be the site where you can file a complaint if you wish to.

Fraud Scams Involving Bank Withdrawals

Available bank deposits may not necessarily always be available.  Under a recent decision from the U. S. Court of Appeals for the Second Circuit involving a law firm and Citibank the Court concluded that even though a bank deposit had been listed as being available to the depositor that did not necessarily mean that it was available with impunity.  In this particular instance a law firm deposited money from a new client into its trust account.  The client then asked for a remittance of some of the money.  The law firm checked with the bank to see if the funds were “available”.  The bank informed the law firm that the funds were available which to the bank meant simply that the law firm could draw against the funds but that did not mean that the funds were guaranteed by the bank.  It turns out that the check that was deposited  in fact bounced.  By the time that the depository bank had been advised of that the law firm had already wired the bulk of the funds out to the client and to a third party.  Once the check was dishonored or bounced then the law firm was on the hook for the entire amount of the funds that had been wired out which was approximately, in this case, one quarter of a million dollars.

Contact Us For A Free Consultation

Contact Us For A Free Consultation