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Top Ten Scams WHAT SHOULD YOU BE ON THE ALERT FOR?
AS I READ ABOUT SOME of the most notorious scams while doing research for this book, I was somewhat surprised. All are deceitful, of course, but some are clever and really humorous. Well, not humorous to the person who is scammed, but humorous to some of us who read about their stories.
Yes, I can chuckle as I read about some of these scams, but be assured: I have great compassion and understanding for anyone who has been scammed—because over twenty years ago I was a victim!
The scam that I was caught in the middle of involved investing in silver futures, which I knew absolutely nothing about at that time. I received a phone call one evening at my home. The person on the other end of the phone was a great salesman and appeared to be very knowledgeable about his product. He asked me if I had ever invested in silver futures, and I answered, "No." Duringhis sales presentation he gave me several examples of how a small amount of money could turn into big returns. He asked if I was interested in learning more; I said, "Yes."
Within a few days I received in the mail a slick brochure and another phone call. (I honestly cannot remember the exact dollar amounts, but to the best of my memory here is what happened during the next few weeks.) Initially, he convinced me to invest $1,000 just to see what might happen in the next few weeks. Well, I foolishly mailed a cashier's check to the address he provided. Within a week he called me back to let me know that my initial investment had doubled and was now worth $2,000. He strongly recommended that I consider investing $1,000 more.
There was always a sense of urgency—that if I didn't send the money immediately I might miss out on a great opportunity. (I did not know it twenty years ago, but "urgency" is one of the warning signs to detect a scam!) I bought into his hype and sent another $1,000. Within a few more weeks, my investment had already increased several thousand dollars. I ended up sending money for the third time. However, after my third check he discovered that I had reached my limit and had no plans to invest any more money with him. Then one day, he called to inform me that silver futures had greatly decreased and I had lost all but a few hundred dollars of my money.
I knew at that moment that I had been scammed. It was a sick feeling. I felt extremely embarrassed and like a fool. I knew better, but my desire to have a large return on my investment caused me to make decisions based on my emotions—not my mind.
The only person who has known about this during the past twenty years has been my wife, Janet. In fact, I find it really hard to believe that I am writing about it in this book. So, if you are ever talking to me, please don't bring it up (just kidding). I still find it very embarrassing. That's how most scam victims feel, embarrassed—and scammers use this to their advantage because they know their victims seldom tell anyone, including the police!
Based on my research for this book, you will find my list of the top ten scams—in no particular order. Be on the lookout for phone calls, e-mails, or letters coming your way. Half of winning the battle is knowing what to be on the alert for. Hopefully if any of the following scams come your way, alarms will be going off and red flags will be waving!
The intent of some of the scams listed below is to obtain your personal data in order to steal your identity. Others only have the intent of scamming you out of a few thousand dollars—not to steal your identity. Whether the goal is identity theft or stealing some of your money, all are wrong, and all are against the law.
SCAM # 1 E-mail Verification of Personal Data
Just the other day I received the following "official-looking e-mail" from eBay.
TO: Ethan Pope
SUBJECT: eBay Inc: Update Your Account Records
Dear eBay Member,
We regret to inform you that your eBay account could be suspended if you don't re-update account information. To resolve this problem please visit the link below and re-enter your account information:
[I have removed the Web link.]
If your problem cannot be resolved your account will be suspended for a period of 24 hours; after this period your account will be terminated.
It looked and sounded authentic, but it was a first-class scam. It's one of the most common ways ID thieves try to get personal data. Here's another e-mail request I received today (as I was writing this chapter!):
TO: Ethan Pope
SUBJECT: PayPal Account Suspension Notice
We recently reviewed your account, and suspect that your PayPal account may have been accessed by an unauthorized third party. Protecting the security of your account and of the PayPal network is our primary concern. Therefore, as a prevention measure, we have temporarily limited access to sensitive PayPal account features.
Please click on the link below to confirm your information:
[I have removed the Web link.]
For more information about how to protect your account, please visit PayPal's Security Center, accessible via the "Security Center" link located at the bottom of each page of the PayPal website.
We apologize for any inconvenience this may cause, and appreciate your assistance in helping us maintain the integrity of the entire PayPal system. Thank you for your prompt attention to this matter.
Sincerely, The PayPal Fraud Management Team
Several days earlier I received an unusual variation, supposedly from PayPal as well. The e-mail contained all the official logos, even the usual PayPal design and colors.
The e-mail read:
TO: Ethan Pope
SUBJECT: Your payment has been sent to firstname.lastname@example.org
This email is to confirm that you have paid $395.95 USD using PayPal.
This credit card transaction will appear on your bill as "PAYPAL OMEGAMOVE".
Shopping Cart Contents: Item Name: Omega Men Watch - mint Quantity: 1 Total: $395.85
If you haven't authorized this charge, click the link below to cancel the payment and get a full refund.
Dispute Transaction Link
Thank you for using PayPal.
What was my response to this supposedly alarming e-mail? I will have to admit, even though I am very familiar with financial scams, this one initially caught me off guard. My heart began beating faster for a few seconds before I realized this was just a different variation of an old scam to obtain my personal data. Then I simply hit the delete button! I knew exactly what this scammer was doing.
You will see scammers illegally using official logos of Visa, MasterCard, American Express, Discover, PayPal, eBay, and major banks, hoping you will respond. Don't let the official look and official warning scare you. Never, never, never click on an e-mail link to verify personal data!
You will find more on this type of scam later in the book.
SCAM # 2 Verification of Personal Data or Account
Any scammer can find your name, address, bank account number, bank name, and usually your phone number by looking at any check you have written. Let's see how a scammer who knows your name, address, phone number, and the name of your bank might use this information.
"Hello, Mrs. Nelson, this is Frank Moore with the First National Bank calling. I work in the fraud investigation department. How are you doing this afternoon?
"Now let me begin by saying there is no reason for you to be alarmed, but we have reason to believe that someone has been trying to electronically transfer funds out of your bank account. Because this appears to be an inside job, our phone call needs to remain confidential. Would you have just a few minutes to verify some information? Great.
"In order to verify that I am speaking with the right person, I need for you to give me your full name, date of birth, and your Social Security number." (Or, if they do not have your bank account number, they might ask you to look at your checkbook and read the numbers across the bottom of the check.)
Or, you might receive a call from someone stating they are calling from MasterCard or Visa with a question. The scammer has obtained your account number from a discarded statement or a photograph of your credit card (perhaps taken with a cell phone camera). All he needs now is the security number that is in your possession and protects from this kind of fraud. The deception is he is not asking for your credit card number: "Of course, I know your account number; now to verify I'm speaking to the account holder, please give me the three [or four] security digits printed on the back [or front] of your card."
This phone call can come from any of a variety of "institutions" attempting to verify information concerning your account. For example, you might receive a phone call from someone identifying himself as a representative of:
Visa, MasterCard, or another credit card,
an investment firm,
the Social Security Administration,
the human resources department at your workplace,
the FBI, or
the local police department.
However, no institution (financial, your workplace, or law enforcement) will ever call you and ask you to provide personal data on the phone. Therefore such a telephone inquiry should bring only one response. Immediately hang up. If you have strong reason to think it might be a legitimate inquiry, you can always call the financial institution or law enforcement agency. They will probably confirm that they did not and do not initiate such calls. Keep in mind that when you call your bank or financial institution, in the course of discussion they might ask for personal data; that is usually acceptable. What's the difference? You initiated the call.
SCAM # 3 Free Credit Report E-mails
Look out if you receive an e-mail offering a free credit report. When you click on the link, they will ask you to fill out a form with your name, address, birth date, name of spouse, place of employment, and Social Security number. They might even have a blank for you to fill in your mother's maiden name for security purposes.
Don't click on the link and fill out the form! If you do, you have just provided a crook with everything needed to steal your good name.
The form you filled out will go into a database with the names of thousands of others who filled out the form—only to be sold to identity theft criminals for some big bucks!
I will have more on requesting a free annual credit report later, but the bottom line is this: There is only one place you should request your free credit report, and that is www.annualcreditreport.com.
SCAM # 4 Do Not Call List
The news media have given extended coverage about the "Do Not Call List," so practically everyone knows about this way to avoid unwanted phone calls from telemarketers. Yet scammers have figured out a creative way to take advantage of this new program. They call you on the phone saying they are with the Federal Trade Commission (FTC) and ask if you would like to sign up for the FTC's "Do Not Call List." In order to sign up, you need to provide your Social Security number and address and verify your phone number, they explain.
However, the FTC does not call anyone asking if they want to sign up for the "Do Not Call List," nor is there a fee to sign up. You have to make the call or register online.
The two official ways to add your telephone number to the national "do not call" registry are: (1) Call the national registry at 1-888-383-1222 (be sure to call from the number you want to register); (2) go online at the official Web site, which is www.donotcall.gov.
Next are a couple scams in which the thief doesn't want your identification; he wants your money—now—and has clever ways to have you send it to him.
SCAM # 5 The Infamous Nigerian E-mail Letter
If you have been using e-mail the last few years, it's about 99.9 percent likely that you have received the infamous Nigerian e-mail letter (or a similar solicitation from a government representative of another country). It comes in different types of appeals for help from a government, but here's the bottom line: It's an e-mail from a supposed official (or relative of an official) pleading for you to help them transfer large sums of money out of their country.
According to the FTC, this e-mail scam has reached epidemic proportions. The e-mail promises that you will receive up to 30 percent (or some other amount) of $10 million (or some other amount) if you will assist in a financial transaction using your bank account. Practically every e-mail or letter has a sense of urgency. The victim is asked to provide bank account numbers, blank letterhead, and invoices to help complete the transaction.
You might be thinking, What idiot would respond to an e-mail like this? Well, according to the Secret Service Web site, Americans have actually traveled to Nigeria to help complete the transaction. Some have been murdered or beaten. Those who make it home realize they have been scammed. The Secret Service indicates the scam "grosses hundreds of millions of dollars a year."
SCAM # 6 "You Have Won a Prize"
The phone call (or letter in the mail) goes something like this: "Congratulations, you have just won a cash prize of $100,000! No, I am not kidding, and this is not a prank phone call.... Now it is very important in order for you to receive your prize money that you follow my specific instructions or your prize money could be forfeited. In order for us to award and deliver your prize within 48 hours, you must send $1,000 (or another amount) in order to (1) complete the certification process, and (2) to cover the cost for one of our employees to personally deliver the check to your home. Tell me, how will it feel to hold a check for one hundred thousand dollars in your hand? Do you have a pen and piece of paper? Here is where you need to overnight the money ... "
The person being scammed goes to the bank, obtains a casher's check, overnights the money, and goes home excited. After several days of no phone calls and no prize money being delivered, they realize they have been scammed.
Or if the scammer is not trying to have you send money but steal your identity, he might ask you to "simply" provide your Social Security number, date of birth, and mailing address.
Good people all over America fall for this scam or a similar prize scam every day. However, we seldom hear about it, because they are too embarrassed to tell family members, friends, or the police. And once again, the scammer counts on this fact.
Especially be on the lookout for letters or phone calls about Canadian or Netherlands prize or lottery money. They are scams!
Just the other day I had lunch with a banker who told me about a woman in our city who was scammed out of $3,900. She did not received a phone call, but a letter in the mail stating that she was a winner in the Canadian lottery. She could not remember signing up for the Canadian lottery, and just assumed she had filled out a form somewhere and dropped it in a box. They tricked her into sending $3,900 in order to collect her prize money—money that did not exist and would never come.
SCAM # 7 Failure to Report for Jury Duty
Here is another scam intent on stealing your identity. Posing as a clerk for a local court, the scammer calls to inform you that you failed to appear for jury duty yesterday and that a warrant has been issued for your arrest.
You immediately begin to explain that you never received a jury duty notice in the mail and there must be a misunderstanding. The clerk explains in a very firm and convincing voice that you are in big trouble and that the judge is tired of dealing with "no show jurors." Now that you are caught off guard (and flustered), the scammer, in what appears to be a moment of compassion, says this can possibly be cleared up on the phone if you can verify the following information: your Social Security number, home address, occupation, and date of birth. Wanting to avoid an arrest and fine (and without thinking), you provide the requested data to the caller.
The scammer now has what he wants and informs you there must have been a mistake. The court clerk apologizes and informs you that the warrant for your arrest will be withdrawn. You hang up the phone and take a big sigh of relief—never imagining you have just been scammed.
Jury duty scams have been reported in Oregon, Washington State, Michigan, Texas, Ohio, Arizona, Illinois, Pennsylvania, and Minnesota. I am sure more states are being added to the list on a regular basis.
Excerpted from Identity Theft by Ethan Pope, Jim Vincent. Copyright © 2006 Ethan Pope. Excerpted by permission of Moody Publishers.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.
TABLE OF CONTENTS
Quick Evaluation: High-Risk Profile for Potential Identity Theft
Go ahead. Take this test right now!
Introduction: The Alert
How safe is your good name?
1. Top Ten Scams
What should you be on the alert for?
2. The Shock
What really happens when your identity is stolen?
3. The Theft
How can someone steal your identity?
What can you be doing to protect your good name?
5. More Prevention
How can you protect your checking account, credit cards, and other personal information?
6. Still More Prevention
What outside resources can you use to protect yourself?
7. The Recovery
How do you report ID theft and reclaim your good name?
8. The Solutions
Is there anything the government or businesses can do?
9. Helpful Resources
Where can I learn more?
Glossary of Terms