Advanced Fee / Prepayment scam
Scammers pose as representatives from phony loan companies and use authentic-looking documents, emails, and websites to appear legitimate. They charge “fees” in advance of granting loans. Consumers pay, but the loans never come through. The scammers are long gone, and they sometimes regularly change the name of their “businesses” to avoid law enforcement.
This is one variation of a scam called the “advance fee” or “prepayment” scam. Scammers can also lure victims in with promises of investments or inheritance gifts in exchange for a fee. But it all comes down to the same thing: Victims pay money to someone in anticipation of receiving something of greater value and then receive little or nothing in return.
Victim is contacted by someone claiming they are from a well-known computer or software company and a virus has been detected on the victim’s computer. The victim is advised that the virus can be removed and the computer protected for a small fee with a payment by either credit card or a money transfer. In reality, there was no virus on the computer and the victim has just lost the money they sent for the protection.
The victim is often contacted by email, mail or phone by someone asking for a donation to be sent by money transfer to an individual to help victims of a recent current event, such as a disaster or emergency (such as a flood, cyclone, or earthquake). Legitimate charity organizations will never ask for donations to be sent to an individual through a money transfer service.
Victim is led to believe that they are sending funds to assist a friend or loved one in urgent need. Victim sends the money with urgency as the victim’s natural concern for a loved one is exploited.
Employment scams generally start with a too-good-to-be-true offer—work from home and earn thousands of dollars a month, no experience needed—and end with consumers out of a ‘job’ and out of money. They generally follow one of three patterns:
1. Scammers pose as a new ‘employer’ and send victims a check to cover up-front expenses, like supplies. Victims deposit the check, buy the necessary supplies and wire any remaining funds back to the scammer. Weeks later, they find out the checks are fake and they’re on the hook for the entire amount.
2. Scammers pose as ‘recruiters’ pitching offers of guaranteed employment or as ‘employers’ extending job offers on the condition that victims pay up front for things like credit checks or application or recruitment fees. Victims pay, but job offers never materialize.
3. Scammers pose as ‘company’ representatives and seek sensitive personal and/or financial information from victims under the guise of doing credit or background checks. They then target victims later on for identity theft.
Threats to life, arrest or other demands by scammers to unlawfully obtain money, property or services from a victim through coercion that they supposedly owe and threatens if they do not cooperate.
Fake Check scam
Fake checks play a starring role in lots of different scams: advance fee or prepayment scams, mystery shopping scams, lottery prize scams, and more. Victims receive an unsolicited check or money order with instructions to deposit the money and immediately wire a portion of it back to cover various expenses, such as processing fees or taxes. Weeks later, victims learn that the checks are counterfeit. However, they’ve already wired the money and can’t get it back. They also have to repay their banks any money they have withdrawn.
How to avoid fake check scams
Emergency scams play off of people emotions and strong desire to help others in need. Scammers impersonate their victims and make up an urgent situation—I’ve been arrested, I’ve been mugged, I’m in the hospital—and target friends and family with urgent pleas for help and money.
Emergency scams also come in all shapes and sizes. There’s the Grandparent scam, where con artists contact the elderly claiming to be their grandchild, urgently asking for money. There is also the Social networking scam, where con artists hack into social networking profiles and then target friends with frantic requests for money, claiming injury, arrest, etc. They do the same by hacking email profiles. They use the information in these profiles to supply enough personal detail to make their requests appear legitimate.
Identity thieves use personal information (e.g., Social Security numbers, bank account information and credit card numbers) to pose as another individual. This may include opening a credit account, draining an existing account, filing tax returns or obtaining medical coverage.
Victim receives a call from someone claiming to be an immigration official saying there is a problem with the victim’s immigration record. Personal information and sensitive details related to the victim’s immigration status may be provided to make the story seem more legitimate. Immediate payment is demanded to fix any issues with the victim’s record and deportation or imprisonment may be threatened if payment is not made immediately by money transfer.
Internet Purchase scam
In the Internet purchase scam, criminals prey on victims who bid on items using an online auction website or service. It generally plays out in one of two ways:
1. Victims win the bid, which is likely a sham or set up, and are told the seller only accepts money transfers for payment. The seller tells the buyer to put the transaction in a fictitious name or in the name of a loved one. Scammers convince victims this protects their money until the goods or services are received. The seller then creates a false ID in the fictitious name and retrieves the funds. The merchandise never arrives.
2. The other variation is when the original auction is legitimate but the victims don’t win the bid. They’re contacted later on by another party offering to sell them the same item under similar terms and instructed to wire the money as payment. The money is sent but the buyer never receives the goods.
Lottery / Prize scam
Lottery or prize scams follow two similar patterns:
1. A victim gets an unsolicited phone call, email, letter or fax from someone claiming to work for a government agency or representing a well-known organization or celebrity, notifying them that they’ve won a lot of money or a prize. The scammer gains their trust and explains that, in order to collect the winnings, they first have to send a small sum of money to pay for processing fees or taxes. Following these instructions, victims immediately wire the money but never get their “winnings”. As a result, they are out the money they paid for “fees and taxes”.
2. Victims receive an unsolicited check or money order, with instructions to deposit the money and immediately wire a portion of it back to cover processing fees or taxes. Weeks later, victims learn that the checks are counterfeit. However, they have already wired the money to cover the “taxes” and cannot get it back. They also have to repay their banks any money they have withdrawn.
Social media is being used to lure new victims into an old get-rich-quick scam where users are advertising ways to turn $100 into $1,000 by “flipping money”. The pitch suggests investors can take advantage of quirks in the monetary system to leverage additional cash and turn a few hundred dollars into thousands. Once con artists have access to the cash, they often block the victim from contacting them via social media or phone number.
Military service members are an appealing target for scammers for several reasons. They are abusing the wide-spread admiration for the military and posing as service men and women in order to trick people into sending them money.
Mystery Shopping scam
Mystery shopping scams are popular with criminals who target employment websites. The ploy is simple: Scammers send victims a check and tell them to use the funds to “evaluate” Western Union’s money transfer service. Victims wire the money only to find out later that the checks bounce and they’re responsible for paying the bank back.
With overpayment scams, fraudsters play the role of buyer and target consumers selling a service or product. The “buyer” sends the seller a legitimate-looking check, usually drawn on a well-known bank, for an amount higher than the agreed-upon price. They offer an explanation for this overpayment and instruct the seller to deposit the check and wire back the excess funds. Weeks later, the victim learns the check is fake, but they are still required to pay the bank back for any money withdrawn.
Communication impersonating a trustworthy entity, such as a bank or mortgage company, intended to mislead the victim into providing personal information or passwords. A Phish is a fraudulent attempt, usually made through email (although can also be made via phone or text), to steal your personal information or propagate malicious code or software onto your computer.
The relationship scam starts simply: a man and woman meet online. The relationship progresses: they email, talk on the phone, and trade pictures. Finally, they make plans to meet and even to get married. As the relationship gets stronger, things start to change. The man asks the woman to wire him money; he needs bus fare to visit a sick uncle. The first wire transfer is small but the requests keep coming and growing—his daughter needs emergency surgery, he needs airfare to come for a visit, etc. The payback promises are empty; the money’s gone, and so is he.
Rental Property scam
Sophisticated scammers use the internet and, in particular, free classified websites to prey on unsuspecting real estate victims. Rental property scams generally happen in one of two ways:
1. Renters are looking for a house or an apartment to lease and get scammed by an “owner.” Victims come across a place in a great area, at a great price. The advertisement looks legitimate so they start communicating with the “owner,” generally by email. The owner says the place is theirs if they wire money to cover an application fee, security deposit, etc. They wire the money, and then never hear from the “owner” again.
2. Owners are renting out their house or apartment and get scammed by a “renter.” “Renters” contact victims, generally by email, and express interest in renting the house or apartment. Scammers send a check for the deposit but then cancel the deal. Victims wire the money back only to find out the check was a fake.
Beware of texts that spark urgency, asking you to click on a link, taking you to a compromised site, or get you to unwittingly divulge some personal information that could be used against you.
Victim is contacted by someone claiming to be from a governmental agency saying that money is owed for taxes, and it must be paid immediately to avoid arrest, deportation or suspension of driver’s license/passport. The victim is instructed to send a money transfer or purchase a pre-loaded debit card to pay the taxes. Government agencies will never demand immediate payment or call about taxes without first having mailed a bill.
Telemarketing broadly covers almost any commercial transaction that involves the use of a telephone to place or receive calls between a consumer and a telemarketer or seller for the transferring of funds, such as cash-to-cash money transfers or funds loaded onto a prepaid card, as payment for goods or services offered or sold through telemarketing, often relating to a promotion for a “free” or heavily discounted vacation, prize or sweepstakes scams, or the sale of “bargain” magazines.