Criminals add new twists to old schemes and exert pressure on people in order for them to make important decisions on the spot. They often combine sophisticated technology with age-old tricks to get people to send money, or to give out personal information. Many scams are initiated through the Internet; victims range in age from 18 and up and they come from all socio-economic backgrounds. While confidence schemes have been around for a long time, the Internet has greatly increased their prevalence. Individual U.S. citizens have lost considerable money on these scams, ranging from a few hundred dollars to hundreds of thousands of dollars.
All types of advance-fee scams have one point in common - the targeted person is led to believe that he or she has a chance to attain something of very great personal value in return for a small up-front monetary outlay. As a general rule, if it sounds too good to be true, it probably is. Scams evolve constantly, and we cannot list all the scam variations. We do however hope that the examples listed below will help alert you to the indicators of some common scams and actions you may take.
Money Transfers, Wire Services, and Green Dot Money PaksA common tool used by scammers is to convince you over the telephone or e-mail to pay using a wire transfer service such as Western Union or Money Gram. Scammers may also try to tell you to pay them using a Green Dot Money Pak card or similar prepaid credit card purchased at a store. These legitimate services provide a convenient way to transfer or give money to someone else, but they should be used wisely.
For fraud information on these products, refer to their links below:
Never wire money to people that you don't know or haven't met.
Never wire money to pay for taxes or fees on lottery or prize winnings.
Never purchase a prepaid card at a store and give the number to someone over the phone who has called you requesting you do this.
Never provide your banking information to people or businesses you don’t know.
Never wire money in advance to obtain a loan or credit card.
Never wire money for an emergency situation without verifying that it’s a real emergency.
Never send funds from a check you received in the mail and deposited in your account until it officially clears—which can take weeks.
Never wire a money transfer for online purchases.
Internet Crime Schemes
Arrest Warrant Scam
Scammers create a fake Caller ID, which allows them to call you and make it appear that they are calling from a local police, sheriff or other law enforcement agency. They say there is a warrant out for your arrest, but that you can pay a fine in order to avoid criminal charges. Of course, these scammers don't take credit cards; only a Western Union MoneyGram, other wire transfer or prepaid debit card will do.
Auction fraud involves fraud attributable to either the misrepresentation of a product advertised for sale through an Internet auction site or the failure to deliver products purchased through an Internet auction site. Consumers are strongly cautioned against entering into Internet transactions with subjects exhibiting the following behavior:
The seller posts the auction as if he resides in the United States, then responds to victims with a congratulatory email stating he is outside the United States for business reasons, family emergency, etc.
Similarly, beware of sellers who post the auction under one name, and ask for the funds to be transferred to another individual.
The subject requests funds to be wired directly to him/her via Western Union, MoneyGram, or bank-to-bank wire transfer.
Sellers acting as authorized dealers or factory representatives in countries where there would be no such dealers should be avoided.
Buyers who ask for the purchase to be shipped using a certain method to avoid customs or taxes inside another country should be avoided.
Be suspect of any credit card purchases where the address of the card holder does not match the shipping address. Always receive the card holder's authorization before shipping any products.
Counterfeit Cashier's Check
The counterfeit cashier's check scheme targets individuals that use Internet classified advertisements to sell merchandise. Typically, an interested party located outside the United States contacts a seller. The seller is told that the buyer has an associate in the United States that owes him money. As such, he will have the associate send the seller a cashier's check for the amount owed to the buyer.
The amount of the cashier's check will be thousands of dollars more than the price of the merchandise and the seller is told the excess amount will be used to pay the shipping costs associated with getting the merchandise to his location. The seller is instructed to deposit the check, and as soon as it clears, to wire the excess funds back to the buyer or to another associate identified as a shipping agent. Because a cashier's check is used, a bank will typically release the funds immediately, or after a one or two day hold. Falsely believing the check has cleared, the seller wires the money as instructed.
Shortly thereafter, the victim's bank notifies him that the check was fraudulent, and the bank is holding the victim responsible for the full amount of the check.
In these types of scams, the perpetrator often calls a grandparent or other relative pretending to be their grandchild/niece/nephew, etc. The caller sounds upset and typically states there are only a few moments to talk. The caller may say that they have a cold if you don't quite recognize their voice, or cue-in on feedback from the call to sound even more convincing. Their story generally follows a familiar line: they were traveling in another country with a friend, and after a car accident or legal infraction, they are in jail and need bail money to be wired to a Western Union account as soon as possible for their quick release. Should you be targeted in this type of scam, there are actions you can take to protect yourself. Although the supposed grandchild may plead with you not to tell his/her family, you should immediately reach out to parents or other relatives to verify the information you receive. In the vast majority of cases, the real relative is safely where he or she should be: at work, school or home.
In lottery scams, scammers generally send an e-mail, fax, or letter to potential victims announcing that they have won a foreign lottery. The "winner" need only provide personal bank account information and pay a few fees up-front to collect his or her substantial winnings. The prize, of course, does not exist. No genuine lottery asks for money to pay fees or notifies it's winners via email. Like other "too good to be true" scams, lottery scams offer the victim great wealth in exchange for paying taxes and other processing fees up-front.
Useful Link: Foreign Lottery Scams
The Council of Aging (COA) warns of a scam to get personal medical information to falsely bill the government (Medicare). The impersonator uses the name of the COA director in town. They proceed to ask a few questions regarding the name of their doctor, type and list of medications prescribed, and the victim's Medicare ID number. The Council on Aging reminds elders and their caregivers that no one will call and ask for a Medicare number. The COA suggests that if you receive a phone call of this nature, you simply hang up without revealing any information. If you have any doubts of the legitimacy of a phone call from Medicare, please hang up and contact Medicare at 1-800-MEDICARE.
Nigerian Letter or "419"
Named for the violation of Section 419 of the Nigerian Criminal Code, the 419 scam combines the threat of impersonation fraud with a variation of an advance fee scheme in which a letter, email, or fax is received by the potential victim. The communication from individuals representing themselves as Nigerian or foreign government officials offers the recipient the "opportunity" to share in a percentage of millions of dollars, soliciting for help in placing large sums of money in overseas bank accounts. Payment of taxes, bribes to government officials, and legal fees are often described in great detail with the promise that all expenses will be reimbursed as soon as the funds are out of the country. The perpetrators will often then use the bank account details to empty their victim's bank account. Often, they convince the victim that money is needed up front, to pay fees or is needed to bribe officials.
Online Dating Scams
Dating and romance scams try to lower your defenses by appealing to your romantic or compassionate side. They play on emotional triggers to get you to provide money, gifts or personal details. Scammers target victims by creating fake profiles on legitimate internet dating services. Once you are in contact with a scammer, they will express strong emotions for you in a relatively short period of time and will suggest you move the relationship away from the website, to phone, email and/or instant messaging. They will go to great lengths to gain your interest and trust, such as sharing personal information and even sending you gifts. Scammers may also take months, to build what seems like the romance of a lifetime and may even pretend to book flights to visit you, but never actually come. Once they have gained your trust they will ask you (either subtly or directly) for money, gifts or your banking/credit card details.
You meet someone on an internet dating website and their profile picture or photograph looks different to their description or like it’s from a magazine.
After gaining your trust, they tell you an elaborate story and ask for money, gifts or your bank account/credit card details.
They continue to ask you for money.
Useful link: Online Dating Scams
Phishing and spoofing are somewhat synonymous in that they refer to forged or faked electronic documents. Spoofing generally refers to the dissemination of email which is forged to appear as though it was sent by someone other than the actual source. Phishing, often utilized in conjunction with a spoofed email, is the act of sending an email falsely claiming to be an established legitimate business in an attempt to dupe the unsuspecting recipient into divulging personal, sensitive information such as passwords, credit card numbers, and bank account information after directing the user to visit a specified website. The website, however, is not genuine and was set up only as an attempt to steal the user's information.
Rental and Real Estate Scams
Rental scams occur when the victim has rental property advertised and is contacted by an interested party. Once the rental price is agreed-upon, the scammer forwards a check for the deposit on the rental property to the victim. The check is to cover housing expenses and is, either written in excess of the amount required, with the scammer asking for the remainder to be remitted back, or the check is written for the correct amount, but the scammer backs out of the rental agreement and asks for a refund. Since the banks do not usually place a hold on the funds, the victim has immediate access to them and believes the check has cleared. In the end, the check is found to be counterfeit and the victim is held responsible by the bank for all losses.
With improved technology and world-wide Internet access, spam, or unsolicited bulk email, is now a widely used medium for committing traditional white collar crimes including financial institution fraud, credit card fraud, and identity theft, among others. It is usually considered unsolicited because the recipients have not opted to receive the email. Generally, this bulk email refers to multiple identical messages sent simultaneously.
Spam can also act as the vehicle for accessing computers and servers without authorization and transmitting viruses and botnets. The subjects masterminding this Spam often provide hosting services and sell open proxy information, credit card information, and email lists illegally.
The IRS warns of a scam where potential victims are told to pay back taxes or fines or face dire consequences, including arrest, jail time, having their utilities shut off, having their driver’s licenses revoked, or deportation. The callers may be insulting or hostile in their attempts to scare their potential victims. In a twist to this scam, the callers may advise the intended victims they are entitled to a refund, but must give personal information or pay something first in order to get it. The IRS does not initiate taxpayer communications through email.
Phone Scam Tips
The tips below are good to follow for avoiding Phone Scams:
Don’t be pressured into giving out credit card numbers or wiring money to purchase anything from someone over the phone that you don’t know.
Don’t give out personal information--including something as simple as an email address--to sign up for contests, free subscriptions or any other offer made over the phone from someone you don’t know. Sometimes a scammer may ask for “verification” of an address, social security number, etc. In reality, he is just phishing for that information, which may be used later in additional scam attempts.
Hang up. Feel free to hang up at any time and don’t answer the phone if the caller dials again.
Cyber Fraud Tips
Here are some additional tips you can use to avoid becoming a victim of cyber fraud:
Do not respond to unsolicited (spam) e-mail.
Do not click on links contained within an unsolicited e-mail.Be cautious of an e-mail claiming to contain pictures in attached files; the files may contain viruses. Only open attachments from known senders. Scan the attachments for viruses if possible.
Avoid filling out forms contained in e-mail messages that ask for personal information.
Always compare the link in the e-mail to the link you are actually directed to and determine if they match and will lead you to a legitimate site.
Log on directly to the official website for the business identified in the e-mail instead of “linking” to it from an unsolicited e-mail. If the e-mail appears to be from your bank, credit card issuer, or other company you deal with frequently, your statements or official correspondence from the business will provide the proper contact information.
Contact the actual business that supposedly sent the e-mail to verify that the e-mail is genuine.
If you are requested to act quickly or there is an emergency that requires your attention, it may be a scam. Fraudsters create a sense of urgency to get you to act quickly.
Actions to Take if Scammed
Sometimes people fall victim to scams. If it happens, here are steps to take:
Check your credit report to ensure no one is trying to open credit using your credentials. The three major credit reporting companies are Equifax, Experian, and TransUnion.
Put an initial fraud alert on your credit report. This alert makes it harder for someone to open an account in your name because a business must verify your identity before it can issue credit. The alert stays valid for 90 days.
Check your bank account and credit card statements for any unusual activity.
Contact a financial institution directly if you think an account there may have been breached.
Report the crime to your local police, nw3c.org, and www.fcc.gov/complaints.
If you fear your identity may be stolen, file an identity theft report: www.consumer.ftc.gov.