Avoiding Fraud & Scams

Phishing

Phishing scams, commonly used by identity thieves, try to trick individuals into giving out their personal information. Identity thieves attempt to accomplish this by sending out fraudulent emails disguised as correspondences from legitimate institutions, such as banks or credit card companies. Identity thieves will also craft fraudulent websites that mimic the legitimate institutions’ websites in order to obtain individuals’ passwords, bank accounts or social security numbers. Recipients of the fraudulent emails are requested to click on an included hyperlink, which will open to the fake website. The fake website will provide a form requesting personal information from individuals. All information entered into the fraudulent web form is collected and used by identity thieves. Alternatively, identity thieves may request that individuals reply to the fraudulent emails directly with their personal information.

Identity thieves typically send out mass emails blindly to individuals, in the hopes that those individuals have accounts with the targeted institutions, and will believe that the request is legitimate. Once individuals’ personal information has been obtained, thieves will use it to take over victims’ accounts, use victims’ credit cards, and steal victims’ identities.

Social Engineering

Social engineering involves thieves, or social engineers, assuming other individuals’ identities, and calling up affiliated legitimate institutions asking for those individuals’ personal information, such as passwords or account numbers. Social engineers commonly use the technique of “pretexting” through phones and emails to trick company representatives into revealing sensitive information. Pretexting involves creating and using a scenario to persuade representative to release information or perform an action that compromises the targeted individual’s information. The fabricated scenario usually involves prior research, such as obtaining the target’s social security number, birth day or last three digits of a credit card, in order to give the perception of legitimacy to the company representative.

Internet Scams

Scammers frequently use the internet, particularly emails, as a means of obtaining an individual’s identity or account information. Below contains a list of common internet scams used by thieves:

• Nigerian Email Scams

  Con artists from Nigeria will issue mass emails to individuals claiming that they have a large sum of money, 10 or 20 million dollars, that needs to be transferred out of Nigeria. The scam artist will then offer the targeted individuals money if they help transfer the money. Individuals who respond positively to this email will receive a follow up email requesting that they pay all transfer fees. Individuals who fall for this scam get deeper and deeper into debt as they try to obtain the promised reward.

  Another Nigerian scam involves con artists assuming the role of estate companies. They try to convince individuals, through their mass emails, that they are trying to track down beneficiaries for a deceased estate. Individuals who reply will receive a follow-up email asking for money in order to cover legal fees associated with filing a claim for inheritance. Once the Nigerian scam artists obtain those individuals’ money, they sever all further correspondence.

• Greeting Card Scams

  In this particular scam, con artists will send out mass greeting cards loaded with malware. Once an individual opens up the greeting card, the malware is installed onto their computer. When individuals click on the greeting card email’s hyperlink, either they will be directed to a website containing malware or they will be asked to install a video plug-in containing malware. Once the malware is installed, con artists have access to the individuals’ personal information.

• Lottery Scams

  Targeted individuals will typically receive an email claiming that they have won a foreign lottery, and that they need to claim their prize. Once individuals respond, they will receive an email stating that they will need to pay a fee for the money transfer. Individuals will then be prompted to give out their bank account information. Con artists use the information given to wipe the individuals’ bank accounts clean.

• Credit Card Scams

  Scammers send out mass emailed to individuals stating that their account has been charged with a certain amount. They then ask the individuals to either press “yes” if the charge is not a mistake, or “no” if it is a mistake. If individuals press “yes,” they are prompted to enter their credit card information. Either way, scammers will obtain the individuals’ credit account information, or if they press “no,” that lets the scammers know that the email address is valid. They can then use that email address for future spam and scam campaigns.

Phone Scams

Con artists and scammers also use telephones as a means of obtaining individuals’ account numbers or passwords fraudulently. By using telephones, scammers have an added layer of trust and authenticity, being that they are able to talk to targeted individuals directly. Common phone scams include:

• Charity Scams

  Charity scams involve con artists posing as charities and calling up individuals randomly, asking for donations. Con artists will issue these scams directly after a major disaster, and pose as a charity raising money for the victims of that disaster. Once they have convinced individuals of their legitimacy, the con artists will prompt those individuals to provide their credit card or bank account information.

• Share Scams

  With these scams, con artists will call individuals randomly, pretending to be brokers, and inform them that a company is on the verge of an exciting technological or medical breakthrough. They will then ask if individuals would like to purchase shares in the company, promising that there will be a large return. Individuals who respond positively are prompted for their financial information, and are also prompted to pay either a transaction fee or a registration fee before the deal can be completed. Many individuals have fallen victim to this type of scam, and after they send in the money, they soon find out that the shares are fake.

  The con artists behind this scam are usually aggressive and persistent, and will constantly call up the same individuals until they give in. The con artists will also guide targeted individuals to an impressive-looking website as proof that they are “legitimate.”

Direct Mail Scams

Scammers also use, less-commonly, direct mail to send individuals fraudulent offers and requests. Common direct mail scams include:

• Astrology and Psychic Scams

  These scams, usually bulk mailed from overseas, advise individuals that they will come into a large fortune if they send money to talismans, golden eggs or fortune telling guides. They provide individuals with a mailbox address to send their money to along with the request.

• Chain Letter Scams

  Individuals will receive a letter asking them to send between $1.00 and $6.00 to a list of people on the premise that they, too, will receive monetary returns. Specifically, the scammers ask individuals to send the letter out to thousands of people in order to increase their profits by using a particular bulk email company for $90.00. This company is also fraudulent. Individuals never receive any money from this scam, and lose all of their invested money as well.

Investment and Business Scams

With these types of employment scams, individuals are guaranteed high monetary returns if they participate in a unique investment or business opportunity. However, individuals who fall for these scams, lose all their money. Common investment and business scams include:

• Pyramid Schemes

  Pyramid schemes combine a fraudulent, but seemingly credible, business with a simple yet sophisticated sounding money generating formula. Individuals are usually prompted via email or phone to pay a fee in order to join the fake business and recruit others. As each new recruit makes a payment, individuals are promised a portion of the money, and they are also promised exponential monetary benefits as the business grows. Most are promised around $100,000 per month in earnings. In reality, individuals never receive payment, and the money travels up the pyramid to the originator. The originator, otherwise known as the schemer, makes a significant amount of money from the scheme. Individuals who participate in this scheme never receive their money back.

• Work From Home Scams

  Work from home scams claim that individuals will be able to earn a very high wage from home by stuffing envelopes. However, individuals must send money away to receive the material to stuff the envelopes with. In reality, individuals do not earn any money, and do not receive their money back either.

  Other work from home scams include processing emails, growing flowers, and making gifts. All of these scams require that individuals invest or send away money before being able to work.

• Off Shore Investing Scams

  Offshore investment scammers recruit well-off individuals to attend seminars for $5,000 or more that are held in exotic, luxurious surroundings. The scammers then try to convince individuals that they can afford to live in an exotic location if they invest in a fraudulent wealth generating program. All that is required is that individuals continue attending the seminars, paying increasing amounts, and they are also encouraged to bring friends. The scammers promise these individuals high returns on their offshore or business program investments, such as 30 percent per month. However, individuals never see any returns because they have unsuspectingly bought into the fraudulent seminars and investment opportunities.