Avoid Being Scammed in 2012

The American Association of Retired Persons (AARP) has compiled a list of the five most malicious scams consumers are likely to encounter in 2012.
 
The Nigerian letter. In this advance-fee scam, someone unknown to the consumer offers promises of great riches. People in financial distress are usually targeted by scammers trying to take advantage of kindness, generosity, or greed. While this scam is old, new variations make it more effective in trapping the vulnerable and unwary. The questionable plea promising millions of dollars has been replaced by more clever approaches: a foreign business person trying to set up a domestic bank account, a parent trying to raise money to help free a hostage child, or a U.S. soldier trying to ship home war booty to help his dying mother. Data mining now allows the scammers to appear more legitimate by personalizing the messages too.
 
We advise you to not respond to these types of inquiries. Instead, you should delete any e-mails of this type and shred any paper mail.
 
Exploitation through education. With this type of scam, fraudsters offer a “secret” system, manipulating the consumer’s emotions while promising riches or easy success. Middle-agers and seniors looking to change careers are usually targeted. Scammers entice the education-seeking unemployed with promises to get rich quick with the secret plan, win a high-paying job with the streamlined schooling, or pass a test for a chance at a nice government job. Victims don’t learn anything they couldn’t find in their local library, but become burdened with thousands of dollars in bogus tuition and fees.
 
We caution you to avoid making same-day decisions. Any career or education decision merits research and referrals.
 
Exaggerated diagnoses of problems.  Here, fraudsters exploit consumers’ lack of expertise, their trust in authority and any critical need.  Most consumers are cautious when an auto mechanic discovers a previously undetected, but expensive, car repair. The mechanic has personal interest in pointing out the pricey problem. That same conflict of interest now appears in other industries. AARP cited hearing specialists who hawk hearing aids, and financial planners pitching a brand of mutual funds as examples of scams exploiting consumers’ trust.
 
We advise you to separate the diagnosis from the product or service deliverer.
 
Facebook scams. An organization or person who doesn’t know the consumer may attempt to “friend” consumers via Facebook, exploiting the trust of the “safe” social-network environment. While Facebook keeps people connected, the walled-off environment of filtered contacts that consumers have learned to trust has also led them to a false sense of security that scammers take advantage of. Once “friended,” they link out of the safe environment to an external site where they can attack consumers viruses or pitched scam offers.
 
We advise you not to respond to or “friend” any person or organization that you do not know.
 
Phishing. In “phishing,” a false entity asks for information it should already have if it were the legitimate entity. It usually targets anyone with a bank or credit card account. Armed with consumers’ names, addresses and phone numbers, phishers call or e-mail consumers with requests to “verify” other personal information such as Social Security number, credit card information and banking data.
 
We advise that the best defense to these scams is to avoid making quick decisions and divulging any personal information. Discuss any financial decision over $500 with a friend or relative, and take at least 24 hours to mull it over.

Too Good to be True

“If it’s too good to be true, it probably is” seems like an old phrase, but is almost fool-proof when it comes to detecting a scam. It’s almost impossible to keep a current list of ones that are circulating since there is a new one everyday. We urge you to be aware, and be skeptical. Skepticism is your friend when it comes to protecting your information. Below are just a few that are making their way around.

FAKE JOB/MYSTERY SHOPPER – In a down economy, this scam is running rampant. Scammers are using unsolicited email and snail mail “job offers” to trick recipients into thinking they’re being offered a great employment opportunity. The proposition varies from you paying fees up front to receive training or equipment, to one that purports to actually send you money. Nobody sends you money for nothing, except maybe your grandmother.

The scam that offers to send you money typically works by saying you’ll be receiving payments from customers and making further payments to a main office or a regional affiliate. The job supposedly pays by commission, meaning if you get a check for $1,500, you are instructed to keep $150 and reimburse the company for the remaining amount. What the scheme actually does is clean out our bank account by sending you fake checks. These checks, which can easily be mistaken for real ones, seem to clear your account without problem because banking rules require financial institutions give consumers access to their deposited money in less than five days. That is not enough time for a bad check to work its way through the system. By the time the counterfeit check is returned, it can be weeks later – weeks after you’ve sent your hard-earned money to the scammers. That $1,350 you sent back to “the office”, was your money. The amount will be deducted from your account and you can be held responsible for any negative balance. But how can you be held responsible for the counterfeiter’s bad check? You’re not. You’re held responsible for the check you wrote on your own account to the criminal.

A mystery shopper scam works the same way. The scammers may send you a check for $1,900, ask you to spend $100 at a certain store, keep $100 for your “work”, then Western Union or wire the remaining funds back to an account provided. The offer pressures you to do all this within a very short period of time, knowing the check you deposited from them will return. Again, you will already have sent the fake funds back to the scammer before the financial institution gets notice that it’s a bad check.  You’ll be on the hook for that $1,700  you sent back.

The stories that come with these offers are extremely believable. They can use names of real companies or agencies, and even create fake websites that look legitimate.

LOTTERY SCAMS – “You’ve won the Iceland lottery!” Well, if you’re not Icelandic, you can’t win their lottery. If you didn’t play the lottery in some obscure foreign country, you can”t win their lottery. If you did nothing and an email is saying you won something, you’re going to lose in the end.

Lottery scams are one of the most common types of fraudulent email currently hitting inboxes. Be wary of any unsolicited email that informs you that you have won a large sum of money in an international lottery. This is a common Internet scam. There is no lottery and no prize. If you initiate a dialogue with the scammers by replying to the lottery scam emails, you will eventually be asked for advanced fees to cover expenses associated with delivery of the supposed “winnings”. You could also become a victim of identity theft by providing sensitive information.  Remember, if you didn’t play, you can’t win.

PHISHING SCAMS – These scams attempt to trick people into providing sensitive personal information such as credit card or banking details. In order to carry out this trick, the phishing scammers send a fraudulent email disguised as an official request for information from the targeted company. Generally, they also create a “look-a-like” website that is designed to closely resemble the target company’s official site. The fake website may appear almost identical to the official site. Style, logos, images, navigation menus and other structural components may look the same as they do on the genuine website.

Recipients of the scam email are requested to click on an included hyperlink. Clicking this link will cause the fake website to open in the user’s browser. Once at this fake website, the user may be presented with a form that requests private information such as credit card and banking details, and other account data such as a home address and phone number. Often, the visitor is requested to login using his or her username and password. All information entered into this fake website, including login details, can then be collected and used at will by the criminals operating the scam.

The scam emails are randomly mass-mailed to many thousands of Internet users in the hope of netting even a few victims. The majority of people who receive these scam emails will probably not even be customers of the targeted institution. However, the scammers rely on the statistical probability that at least a few recipients will have accounts with the company or merchant the email is supposedly from, or be unaware of these types of scams and believe the email to be legitimate.

Always be suspicious of an unsolicited email from a financial institution or other company that asks you to verify sensitive information. MONEY FCU will never ask you to verify your account information or “re-activate” your account via email.  Your best bet is to contact the company or go directly to their known website address.

If you ever have questions or concerns about your account, please feel free to contact us!  Our job is to help you and protect your accounts with MONEY Federal Credit Union. We’ll post what we know and anything new we find out on our fraud prevention page.  We also recommend you get a free copy of your credit report at www.annualcreditreport.com.  Make sure all accounts listed are yours, and that you opened or requested them.  If you see anything suspicious, contact the credit reporting agency immediately.