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NSW Refund Fraud - Criminal Offence?

Discussion in 'Criminal Law Forum' started by Anon, 25 December 2014.

  1. Anon

    Anon Member

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    I have a friend who has told me they have been refunding a few items where they work and then buying the items back to ensure the stock levels are right. I'm not 100% certain on the entire thing as they told me in a hurried conversation, but the company have been auditing all the stores for refunds and they have called a couple of customers that have had the refund put through (they were numbers of their friends). My friend contacted the numbers that the company sent through and they have only called one of the numbers (which of course wasn't a correct customer details). Under criminal law, is my friend going to go to jail? I don't know the full amount that they have done but I am pretty sure this is considered fraud.
     
  2. Sarah J

    Sarah J Well-Known Member

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    Hi Anon,

    1. If your friend is merely refunding items and then repurchasing them, this would not constitute fraud but it is strange.

    2. If your friend is making any false representations to get the shop to take the items back and then repurchasing them at a lower price, the shop could have a civil action against your friend for misleading/deceptive conduct obtaining a financial advantage, but this would unlikely constitute fraud in the criminal sense.
     
  3. Anon

    Anon Member

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    They are purchasing the items back at full price to fix the stock levels back up. She was broke one week so did that and then repurchased to fix it back up. She is just concerned she will be going to jail for fraud which is what I was assuming as it is theft...the total amount probably is around the $400 mark
     
    #3 Anon, 25 December 2014
    Last edited by a moderator: 25 December 2014
  4. Sarah J

    Sarah J Well-Known Member

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    1. If your friend is merely an employee following the instructions of an employer, then the likelihood of your friend being criminally charged is low. Your friend may be reprimanded by the company under her employment contract for improper conduct that violates some kind of employment handbook term.

    2. Even if your friend is the one who managed this, if she is legitimately purchasing the items (i.e. paying money for the items) and then refunding them, then this would not constitute fraud. Fraud is intentionally and knowingly using false information for a personal benefit or to benefit that of another. However, if the result of this is to inflate the books, make it look like there have been more/less sales and therefore obtaining some kind of tax benefit at the end, then your friend may be liable for tax evasion/avoidance. If it is an internal company benefit the friend is getting, then she will most likely be misleading the company and again, be in breach of an employment term (not a criminal offence).

    I still don't understand how purchasing and refunding stock would fix the stock levels. Is this a company-wide or tolerated act? Or is your friend doing it out of his/her own accord?
     
  5. Anon

    Anon Member

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    Sorry it wasnt very clear. She is refunding the products, taking the money and the repurchasing them later on when she has the money to ensure the stock levels are correct
     
  6. Sarah J

    Sarah J Well-Known Member

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    Oh, as in she is refunding items from the store she has not yet bought (i.e. that do not belong to her) and purchasing them later on, as a form of short term interest-free loan?

    Does she have the employer/manager's permission to do this or does only she know about this?

    If she is doing this without the full and informed permission of the company then yes, her conduct will likely constitute fraud. Whether she gets charged depends on the amount of loss suffered by the company, the degree of dishonesty felt by the company and the willingness of the company to report you.

    I suggest having a look at the Judicial Commission of NSW's fraud offences list and for your friend to get legal advice as soon as possible.
     
  7. Phildo

    Phildo Well-Known Member

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    At the very least, I would have thought that instant dismissal would result as soon as the company figures this out?

    This will appear on the computer system and get flagged at some point.

    If the person thinks that she has financial problems now, then she'll be in for a world of fun at unemployment time.
     

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