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- Fraud Prevention
- Common Scams
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There are numerous ways that criminals obtain your money or personal information to commit fraud. These are called Scams. Some of the more common forms of scams that criminals use are:
Arrested Family Member / Friend Scam
A victim receives a phone call or electronic message from either a close friend or family member indicating that they have been arrested or detained in another country. They then request assistance with paying fees to clear the case, as well as legal fees for representation, and ultimately with more money to help get back home because their funds are depleted. With telephone calls associated with these types of scams, the criminal will often get the victim to identify who they think they are talking with and then continue the ruse. The internet version of this scam usually occurs after someone's online email or social networking account has been compromised and a message is sent to all of their contacts. It will be requested that the money be sent through some type of wireless service.
The best way to avoid this scam is not to provide information to the person that initiates contact, and then scrutinize everything they tell you. Ask for contact information so that you can call them back after you double-check the story before you send any money. Never wire anyone money, this is almost always a sure sign of a scam.
The criminal contacts the victim and advises them that they have won a lottery, typically from another country. The criminal requests fees to cover processing and taxes. The victim is led to believe that, for a nominal fee of only thousands of dollars, they will receive hundreds of thousands or even millions of dollars in return. Once initial payments are sent, the criminal will continue to request more and more money for various reasons and this continues until the victim stops making payments.
One of the easiest ways to prevent this from occurring is to ask yourself if you even entered the lottery that you supposedly won. If you have not, then this is undoubtedly a scam. Research the lottery to ensure its legitimacy before sending any money to cover fees or taxes. Money is requested via a wire transfer with this type of scam too. Never wire anyone money, this is almost always a sure sign of a scam.
Although the Nigerian Letter has taken many forms over the years, the theme has remained the same: The victim is contacted because their name has been passed on as being someone trustworthy and respectable. The letter then requests that the victim allow large amounts of funds to be held in the victim's personal accounts. Essentially, they are being asked to launder the money, but the reason for the request usually revolves around a story involving atrocity or other criminal injustices being committed against a particular political figure in a foreign country. In exchange for the inconvenience, the victim is allowed to keep a certain percentage of the money they hide. The victim will either provide their own bank account information that the criminals then steal from, or they cash huge checks and send the criminals their portion of the money while at the same time spending the victim's portion of the money before they realize that the check was fraudulent. The victim then owes the full amount of the fraudulent check to the bank.
Nigerian Letters will typically be laced with spelling and grammar errors. The criminals use sorrowful stories to lure the victims into helping them, and reinforce how they have heard what decent and caring people the victims are. Avoid giving out any information to anyone, and never cash checks unless you know who they are from. If you do cash a check, do not send any money to anyone until after the bank has confirmed the legitimacy of the check and that the funds are clear for use.
Victim of a Fraud / Debt Collector Call Scam
In this scam the criminal contacts the victim and advises that they are a representative from their bank or credit card company and need to inform the victim of a recent fraud that has occurred, or the criminal purports to be a representative from a debt agency trying to collect on an overdue account. The criminal then asks the victim for their personal information to clear up the problem.
The best way to prevent becoming a victim of these types of crimes is not to give out your personal information. Take whatever details the criminal will give you about the alleged problem, and then research the matter independently. Financial institutions will definitely understand your apprehension, and so will some debt collectors. Although legitimate debt collectors can be pushy at times, their goal is to collect money. If the contact ever gets to the point where the criminal becomes belligerent or threatening when communicating with you, that is a good sign that it is a scam. Financial institutions do not initiate contact with customers by telephone or email and then request personal information, so this is another possible indicator of a fraud attempt.
Cash a Check, Make Some Money Scam
This is a variation of the Nigerian Letter scam that has matured into its own category of scams. In this scam, the victim is usually the seller of an item that the criminal ends up overpaying on. Payment is made by fraudulent check, and the victim is asked to wire transfer back the difference in the check. In most instances, the victim is out whatever product they were selling because they mailed it to the criminal, as well as whatever the fraudulent check amount was that they cashed and then sent the difference to the criminal.
A lot of the time this type of scam revolves around vehicle purchases or property rental. There is often a middleman supposedly involved, and the criminal purports to be very rich so they request that their accountant handle the transaction. The criminal alludes to trusting the victim with the overpayment even though they do not know one another and there is no reason that the criminal should trust the victim. There will sometimes be spelling and grammar errors in these correspondences too. Avoid being a victim by ensuring that all checks clear before sending your product or returning any additional funds to the criminal. Never wire anyone money, this is almost always a sure sign of a scam.
Donations / Charities
This scam is one of the few that involves the suspects actually meeting the victim in person. The premise is that they sell you a product or ask for a donation and then abscond with the money. Some of the more common examples of this are someone soliciting work to either re-pave your driveway or re-shingle your roof, people going door to door selling magazines, and people soliciting donations for charities. In the cases where people solicit work, they may just steal the deposit or they may do substandard work and then overcharge for the final project. The charity donation scam usually involves legitimate-sounding programs that do not really exist.
Avoiding these scams is a little more difficult because the personal interaction between the criminal and the suspect usually lowers a person's skepticism. Take note of how the people are dressed or what type of vehicles they have. If it seems suspicious, hold off on entering into a contract or donating any money. Ask for specifics about who the people work for and then research whether the charity is actively soliciting donations or if there are any complaints about the business. The paving scam usually involves criminals claiming that they have leftover pavement from another job, and so they are willing to give you a really good deal. Avoid pressure from them to make a deal right away.