So I thought this would be a good time to write a blog post and highlight 4 types of phone and internet scams you need to be particularly aware of so that you don't become the victim of a con game that can cost you big bucks.
These have become quite common and can end up costing you hundreds, and even thousands, of dollars if you're not aware of how they work.
The fraudsters typically buy or rent something you've posted on Craigslist, Ebay, Airbnb, Offer Up, etc. and then send you what looks like an official bank check.
Usually the check is written for an amount far greater than the purchase price or rental deposit that they are required to pay for whatever it is you've posted.
Most often, instructions accompany the "payment", requesting that you deposit the bank check, keep a portion of it as a payment for helping them out, and and then wire most of it back to them.
They usually offer any number of reasons for doing it this way, and it can seem very logical, particularly for the young or unsuspecting.
If you go ahead and do as they ask, you will soon find out that the bank check you've deposited for them is fake.
But by the time you do find that out, the money you sent back to them is gone from your account and the culprits have long since moved on.
It's almost impossible to recover any losses.
How to Protect Yourself
On-line sales and rental sites have reporting procedures for suspected fraudulent activity, but as soon as they block one bad operator, the grifters move on to other victims, and another scammer pops up in their place.
My advice is to ignore bank checks and never get involved in any kind of complicated banking, wiring, and payment schemes when making purchases on-line.
Here are a list of warnings about transactions that Craigslist offers on its fraud link:
- Deal locally, face-to-face —follow this one rule and avoid 99% of scam attempts.
- Do not extend payment to anyone you have not met in person.
- Beware offers involving shipping - deal with locals you can meet in person.
- Never wire funds (e.g. Western Union) - anyone who asks you to is a scammer.
- Don't accept cashier/certified checks or money orders - banks cash fakes, then hold you responsible.
- Transactions are between users only, no third party provides a "guarantee".
- Never give out financial info (bank account, social security, paypal account, etc).
- Do not rent or purchase sight-unseen—that amazing "deal" may not exist.
- Refuse background/credit checks until you have met landlord/employer in person.
Millions of people carry out transactions daily on the internet daily without problem.
One way you can avoid nasty surprises is to follow these guidelines.
IRS PHONE SCAMS
The most recent ones - one occurred today, in fact – involve robo-calls leaving messages supposedly from the IRS, warning us that they are filing a lawsuit against us.
The robocaller very "helpfully" provides a phone number for us to call if we have questions.
If you actually call that number, however, the results will not be pleasant.
The callers will threaten all kinds of dire repercussions if you fail to pay “your overdue taxes” immediately, usually by using some kind of gift card.
Some people are so cowed by the threats that they promptly send the payment. That action is often followed up by a request for additional payments.
Eventually, after the thieves feel they've gotten all the money they can from you, they disappear.
Or, instead of asking for gift card payments, the culprits ask instead for all kinds of personal information from you, including your social security number, bank account numbers, etc. to “verify” the information they have on hand.
And shortly after they get the information - which you give them because you think it's the IRS, of course, you will find your identity stolen and being used to open all kinds of accounts. and your bank accounts quite possibly cleaned out.
Here’s the thing to remember about this kind of thing.
First of all, the IRS does not contact people by phone, but by mail. Second of all, they would never ask for your personal information since they already have it on record.
Here’s a link to the IRS website warning about this kind of scam.
So, if you get a call like this, hang up immediately, and don't worry about being rude. Just do not give them the time of day.
It is the height of cynicism when criminal elements play upon the sympathies of good-hearted people, but it happens all the time.
Sometimes it’s in the form of a phone call from a vaguely familiar sounding charity, requesting immediate donations to help an injured policeman or soldier, etc. via a credit card payment.
And sometimes it’s a call from a charity you’ve given to in the past, asking for money.
But they're not legitimate charities at all. They'll take your payment and disappear.
How to Protect Yourself
Here’s my take on this: I make it a policy to NEVER give credit card information out to an unsolicited donation request over the phone.
And I will tell the phone caller that right up front. If they then try to get aggressive with me, I simply hang up.
I recommend making any donations directly to a charity website, or phone number, or by check to a known address. Even if the call seems completely legitimate, I just don’t do it.
First of all, I object to any charity using professional fundraising companies to solicit donations. Those companies are usually very expensive and often take a majority of the money they raise.
I’d much prefer to have the charity itself get all the money.
Second of all, most charities do their legitimate fundraising online, through TV campaigns, or via the mail.
I recommend verifying the status of any charity you are considering donating to by checking them out at Charity Navigator, an independent, non-profit watchdog group that rates charities (and relies on charitable donations to function).
Other places to verify charities are Charity Watch and the Better Business Burea's Wise Giving website.
Sadly, there are way too many scams out there masquerading as beneficial organizations, so do your due diligence before donating.
E-MAIL SOLICITATIONS OR SPOOFED E-MAIL AND PHISHING SCAMS
This is very dangerous and can end up costing you thousands if you use e-mail for any kind of business or personal transactions.
Here’s a link to a Microsoft page that offers very detailed explanations and guidance on how to recognize these scams and what to do when you think one has arrived in your e-mail.
In a nutshell, these are e-mails sent to you typically requesting
(a) money for a friend in trouble;
(b) verification of your account or credit card information from what appears to be a legitimate website or other entity that you have previously done business with; or (c) a product offer and payment terms from a company that you have done business with before.
The Set-Up for Friend in Trouble
In the case of an e-mail from a friend in trouble, it’s usually that they’ve encountered some kind of dire emergency while traveling, and are in desperate need of cash.
You send the payment, and they disappear with it.
These pop up occasionally on places like Facebook, as well.
How to Protect Yourself
You can safely ignore these requests.
Or, if you’re concerned about the news in the notification, just e-mail, or text, or call your friend to find out what’s up.
Chances are they know nothing about the requests to send money to some overseas address on their behalf.
The Set-Up for Request for Verification of Information Scam
You will receive an email requesting verification of the credit card or personal information you provided to a company or organization you've previously done business with.
You provide the payment information or personal details, and either find yourself the victim of identity theft a short time later, or on the hook for payments you inadvertently authorized to a fraudulent company.
How to Protect Yourself
Ignore these requests.
Be aware that no legitimate business is going to ask via e-mail for information they already have on file, and under no circumstances should you give them any personal information.
Set-Up for Business E-Mail
In the case of the businesses, the scammers will write to solicit business, offering products, or services, using the logo of the organization they are trying to impersonate.
You purchase the fake products or services, send payment to the account outlined in the email, and lose your money to this fraud.
How to Protect Yourself
Look closely, and you will see that their IP address is actually quite different from the .com or .org address of the legitimate business or charity.
They also often contain very obvious grammar and spelling errors.
However, if you often deal with foreign companies in your business, things like the bad grammar might not send off warning bells the way it would in some cases.
As an example, we have a business colleague who just lost $25,000 because he ordered and paid for some Japanese products via wire transfer in response to an e-mail offer he received from the same company that he had done business with many times.
He did not notice that the bank routing information was different from previous orders he’d made. It turned out that he had been communicating with a fake entity who stole his money by having it sent to their account instead of the company’s.
This man had more than 25 years of business experience behind him. So that gives you an idea of just how savvy these criminals are about using technology to their advantage for criminal gain.
So be sure to check, recheck, and verify banking information before wiring or sending the money for products.
In all these cases, you should report what happens to the FTC instead. Here’s the link to that site.
And most major business websites, such as Amazon, have links where you can report such activity.
Here's hoping you never experience loss from these kinds of fraudulent activities. But it's important to be wary and alert.
Sadly, the times we live in demand much greater diligence and awareness to avoid becoming the victim of a scam. It is the trade-off for enjoying all the benefits that technology has to offer.
Forewarned is forearmed.