Dear Readers: The FBI issued an update ) as to mass marketing fraud. The portion presented here complies with a reader’s request articulating the most “popular” frauds and the best ways of dealing with fraud. Just note that nothings foolproof; a fraud investigator we know loves to talk about how he was the victim of credit card fraud due to a clerk in a store stealing his credit card number after a purchase. It really can happen to anyone. Crime in America.Net
For additional news on fraud, see http://crimeinamerica.net/category/fraud/.
Sources of Information to Prevent Fraud:
- Great and short overview of privacy and theft issues
- Get your free annual credit report from Equifax, TransUnion and Experian
- Spread them out over the year so you receive one every 4 months
- Opt Out of Credit Card Offers under the Fair Credit Reporting Act
- The Do Not Call Registry
- Direct Marketing Mail Preference Service; have your name and address removed from the phone book and reverse directories. Opt-out of the sale or sharing of your financial information when given the opportunity by your bank, credit card companies, insurance companies, and investment firms.
Good sources for checking out e-mail Hoaxes
Principal Types of Mass-Marketing Fraud and Resources for Combating Fraud
Mass-marketing fraud encompasses a broad range of fraudulent and deceptive schemes designed to separate people and businesses from their property, money, services, or information. Many perpetrators use generic, well-known fraud templates, simply recycling and updating schemes that have proven successful in the past, although individual schemes may vary in nature, execution, and targeted victim population. The most effective and lucrative scheme variations are often widely replicated, as criminals aim to capitalize on victims’ delayed recognition of fraudulent solicitations. Versions of the following schemes are among the most-frequently reported to law enforcement and consumer protection agencies in Africa, Australia, Europe, and North America.
- Acquisition and Advertisement Fraud Targeting Businesses: Businesses remain popular targets for fraud schemes, as employees may be less vigilant or capable of detecting and protecting against threats to corporate funds, and the amounts of money involved in fraudulent business transactions may be larger than schemes involving individuals. Many perpetrators use the “assumed sale” technique, misleading businesses to believe that someone within the company authorized a purchase, demanding payment for fictitious debts, and using fraudulent invoices and payment slips as proof of service. Perpetrators may also pose as legitimate venders or companies’ usual suppliers to solicit the sale of expensive or low-quality office products, advertisements in nonexistent or poorly distributed business directories, and poorly crafted websites. Belgian and Dutch authorities have identified schemes involving the fraudulent sale of domain names, web addresses, and domain extensions at inflated prices.
- Charity Schemes: Perpetrators of charity fraud schemes exploit sympathetic causes, legitimate charities, holiday seasons, and humanitarian, environmental, and other disasters to solicit financial contributions. Instead of using donated funds for their stated charity or cause, however, perpetrators retain and use all or most of the money for personal enrichment and other improper purposes.
- Counterfeit Check Fraud Schemes (Including Schemes Targeting Attorneys): A variety of mass-marketing fraud schemes, including lottery schemes and online auction schemes, commonly use counterfeit checks or counterfeit money orders to enhance the perceived legitimacy of a transaction. Whether sent to a victims as a disbursement of lottery winnings or payment for a high-value item such as a car, the fraudsters always require that the recipient deposit the check or money order into his or her bank account, then transfer a portion of the face amount of the check or money order back to them. Several weeks later, the bank into which the check or money order was deposited informs the depositor that the financial instrument was counterfeit and holds the depositor liable for the full face value of the instrument.Law enforcement has identified an emerging scheme in which perpetrators are targeting attorneys and law firms. Posing as representatives of foreign companies, the perpetrators request legal assistance to collect delinquent payments from vendors or customers. At the behest of the foreign companies, the targeted law firms pursue payment from the alleged debtors, receive checks payable to the law firms, and forward the balance of the payment, less the firms’ fees, to the perpetrators. More recent variations of the scheme involve perpetrators posing as individuals seeking resolution of personal injury claims and wives requesting legal assistance to collect divorce settlements from their ex-husbands.
- Emergency Assistance Schemes: Perpetrators, posing as a family member or close friend, contact victims with requests for urgent financial assistance, claiming that a family member was arrested overseas and requires bail money or a friend had an accident and needs funds for emergency medical expenses.
- Foreign Lottery and Sweepstakes Fraud: Perpetrators of lottery, sweepstakes, and prize schemes target unwitting individuals with false promises of money or valuable items, provided that the victims first purchase certain products or make advance payments of fictitious fees and taxes. Perpetrators often use counterfeit financial instruments to enhance these schemes’ appearance of credibility.
- Investment Fraud: Perpetrators of investment fraud schemes, including penny stock schemes, advance-fee recovery schemes, and high-yield investment programs (also known as “Ponzi” schemes), target victims with fraudulent promises of high returns in exchange for devoting investment funds to the purchase of securities, real estate, stakes in oil drilling ventures, coins, gems, and other commodities.
- Merchandise Purchase/Product Misrepresentation Schemes: Merchandise purchase fraud comprises a wide range of schemes that target consumers who purchase or attempt to purchase products or services via Internet auction sites, catalogs, mail order services, classified advertisements, and other media. Common schemes include perpetrators’ failure to deliver purchased merchandise, delivery of purchased goods later than promised, delivery of worthless or significantly less-valuable items than purchased, and misrepresentation of products’ true conditions. While perpetrators can offer any item for sale, analysis of Canadian fraud complaints suggests that popular and trendy technologies such as iPhones, laptops, digital cameras, and video game consoles are among the most commonly advertised. Nigerian and U.S. authorities have identified similar schemes involving the fraudulent sale of pets, magazines, office supplies, vacations and timeshares, health products, precious stones, and scrap metals. Some perpetrators send consumers and businesses bills for unordered products, demanding payment and threatening legal action to collect the fraudulent debt In another common scheme, perpetrators target users of legitimate online auction sites by offering losing bidders a second chance to purchase the desired products, provided that the buyers pay via wire transfer or other unsecure payment method.
- Psychic/Clairvoyant Schemes: Perpetrators of psychic/clairvoyant schemes contact victims with offers to make predictions of events that will change victims’ lives, provided that the victims pay in advance. Perpetrators may entice victims with predictions of extreme good fortune and threaten bad luck should victims fail to comply with the demands for money.
- Recovery Schemes: Perpetrators of recovery schemes, often posing as lawyers, law enforcement officials, or government employees, target prior scam victims with offers to facilitate restitution pursuant to the advance payment of administrative and other fees.
- Romance Schemes: Perpetrators of romance schemes target users of Internet dating and social networking sites by feigning romantic interest, securing victims’ trust and affection through regular intimate conversations and exchanges of gifts, and then exploiting the relationship to fraudulently obtain money and valuable merchandise. Romance scam victims have reported sending money to facilitate the purchase of travel documents and airline tickets, pay for medication and hospital bills, fund charitable works programs, and help perpetrators recover from personal financial difficulties. While all mass-marketing schemes take a psychological toll on victims, romance schemes often leave victims emotionally devastated.
- Sale of Merchandise/Overpayment Schemes: In “sale of merchandise” or overpayment schemes, perpetrators remit fraudulent payments, often in the form of a counterfeit or altered monetary instruments, to purchase high-value products or services such as cars, computers, or electronic goods. The monetary instruments are generally payable in amounts greater than the products’ advertised prices, and perpetrators instruct the sellers to deposit or cash the checks and return the balance by wire transfer. Belgian authorities have noted that criminal exploitation of certain online automobile sales sites is so prevalent that sellers now receive almost only fraudulent offers, many of which use fake escrow services to enhance the legitimacy of the bid. Perpetrators of other “sale of merchandise” schemes use stolen credit cards to purchase high-value retail items; in many cases, the businesses ship the products before discovering that the credit cards are stolen.
- Service Schemes:Similar to product misrepresentation schemes, service schemes involve false or misleading promotions for services. Canadian and U.S. victims have reported fraudulent offers for local and long-distance telecommunication services; Internet services; health and medical services; energy services; automobile sales, insurance, and warranties; dating services; immigration and green card application services; and financial services, including debt management, credit protection, and credit repair progal West African Fraud Schemes: Traditional West African fraud schemes, often termed “419” frauds after the section of the Nigerian criminal code pertaining to fraud, entice victims with promises of immediate and enormous wealth. Common West African fraud solicitations include inheritance schemes, in which perpetrators require victims to pay fictitious fees and taxes to claim the nonexistent estates of previously unknown and now-deceased relatives, and black-money schemes that solicit victims to purchase special cleansers to remove dye from paper currency that has, for various reasons, been blackened and rendered unusable. Perpetrators of funds transfer schemes claim to need a victim’s financial assistance to transfer or embezzle money, often millions of dollars, from a foreign country or company in exchange for a portion of the stolen funds.
- Traditional West African Fraud Schemes: Traditional West African fraud schemes, often termed “419” frauds after the section of the Nigerian criminal code pertaining to fraud, entice victims with promises of immediate and enormous wealth. Common West African fraud solicitations include inheritance schemes, in which perpetrators require victims to pay fictitious fees and taxes to claim the nonexistent estates of previously unknown and now-deceased relatives, and black-money schemes that solicit victims to purchase special cleansers to remove dye from paper currency that has, for various reasons, been blackened and rendered unusable. Perpetrators of funds transfer schemes claim to need a victim’s financial assistance to transfer or embezzle money, often millions of dollars, from a foreign country or company in exchange for a portion of the stolen funds.