Postal Inspection Service
The Mail Fraud and False Representation Statutes
The Mail Fraud Statute (Title 18, United States Code, Section 1341) is the nation's oldest federal consumer protection statute and effectively fights white-collar fraud and product and service misrepresentation. It defines fraud as a scheme or artifice which uses the U.S. Mail to obtain money or property by means of false or fraudulent representations.
Mail fraud is a criminal scheme where the postal system is used to obtain money or anything of value from a victim by offering a product, service, or investment opportunity that does not live up to its claims. To obtain a mail fraud conviction, a prosecutor must prove (1) the facts surrounding the offer were intentionally misrepresented and (2) the U.S. Mail was relied on to carry out the scheme.
The False Representation Statute (Title 39, United States Code, Section 3005) is a civil law used to protect the public from aggravated monetary loss where proving fraudulent intent is difficult. Three remedies are available to the Postal Inspection Service under this law in pursuing con artists who use the mail to defraud people. If the Postal Service sues the promoter based on evidence obtained by postal inspectors, it need only prove a particular representation was made, that it is false, and that money or property was sought through the mail.
If the judge rules the promotion violates the statute, a false representation order (FRO) is issued by the Judicial Officer of the Postal Service directing the postmaster in the city where the promoter is receiving mail to return to the senders all mail connected with the promotion. An FRO thus cuts off the promoter's receipt at that address of funds sent by victims. The statute does not provide a judge with authority to order refunds to victims whose money the promoter has already obtained.
Often, a court hearing is avoided when postal inspectors get a promoter to sign a consent agreement to discontinue a promotion; such an agreement typically includes a provision requiring the promoter to refund money to any victim who requests it. Inspectors also often get a suspect promoter to sign a voluntary discontinuance letter to cease a promotion early on, thus saving many consumers from victimization.
A law suit under the False Representation Statute sometimes takes time to resolve, so the Postal Service may ask for a temporary restraining order (TRO) from a U.S. District Court near where the suspect promoter receives his mail. While an FRO is being sought, a TRO keeps consumers' money from reaching the promoter by allowing the postmaster in the city of address to detain incoming mail connected with the promotion, thus reducing the public loss while legal proceedings seeking an FRO continue.
The sooner an investigation is undertaken, the sooner postal inspectors can prevent consumers from losing money to mail fraud swindlers. If you have been victimized in a fraudulent promotion in which the mail was used, report your experience to your local postmaster or nearest Postal Inspector.
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