There are more scams and types of fraud out there than you can shake a stick at, and new ones surface all the time. We're going to go into a few that we've had experience with, but if you are interested in gaining a little healthy paranoia, here are a few sources of information for you:
Scambusters can be a helpful resource.
Quatloos information about types of financial scams and fraud.
Better Business Bureau is also a good resource.
Here are a few frauds and scams to be aware of:
E-Bay and Sales scams
Be careful selling items, over the internet
or even in person!
The story is all too common. The victim is selling
a used car or some other item via the Internet.
A buyer sends an e-mail message that he wants to
buy the item. The buyer says he will pay with a
cashier's check from a bank. At the last minute the buyer has some plausible story about why the cashier's check will be much more than the asking price - even thousands of dollars more. "Just wire the difference back to me," the buyer suggests, "-- after the cashier's check clears, of course." The victim thinks the
cashier's check must be good when it's accepted by
his or her bank and the funds are provided - but in a week or so the check turns out to be counterfeit. Unfortunately, often the victim has already wired
thousands of dollars to the buyer, never to be seen again. Because it is a forgery, the financial institution will require the victim to pay back all the funds provided for the phony check.
Victims of this scheme are not naive and they are not greedy. They typically are skeptical and careful. But even the most skeptical consumer can be deceived, and it all comes back to the cashier's check supposedly from a U.S. bank. The checks are really good forgeries -- counterfeit, but so authentic looking that they can often fool bank or credit union staff. And because the victim receives the money, she or he feels confident of the check. However, it may take a week or more for the check to be identified as fraudulent. The victim then owes the money back to the financial institution who took the check. And if he/she has sent money or the item to the buyer, the victim is out that money too.
Advice? Alway make sure that a check is valid. Look the financial institution up in a phone book or on-line, and call to verify funds. Don't rely on the phone number printed on the check. Don't be in a hurry to spend the cash you recieve. Avoid immediate shipping of the item. And, especially, if someone sends you MORE money than you asked for, that's a red flag!
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Identity Theft
What is identity theft? When someone steals your personal information and uses it to take over your credit accounts, open new ones, take out a loan, to rent an apartment, access bank accounts, or commit many other crimes using your identity, that's identity theft. And there is way too much of it about.
It can be very serious. For one thing, a victim may not know that the theft has occured for a long time. It can take a lot of work and money to clean up the mess.
What can you do? Be alert, be aware, and keep an eagle eye on your financial matters, including your credit report. Be cautious about giving out card numbers, social security numbers, and never, ever give away a PIN. Take the Identity Theft Safety Quiz to see how you rate!
The Federal Trade Commission offers help, an identity theft resource center, including a handbook, called When Bad Things Happen to Your Good Name. This handbook explains identity theft in some detail, what you can do to avoid it, and what to do if you've become a victim. You can read it on-line or you can print it out to refer to.
If you feel that fraud may be happening to you, please call or come into any branch. We will do our best to help you sort it out.
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Something for Nothing
If someone calls or e-mails you, and offers you a really great deal, say a grant, or free money, or incredible methods of making money without working, don't rush into it, tempting though it may be.
Look for the catch!
A common one is for scammers to need some "small" start-up fee for instance, to set up your account, or to send you the application. Often, they will want your account information, or a debit card number, so that they can automatically start you on the path to this wonderful deal. Don't buy it! The small amount that you are being asked for may or may not be the amount that comes out of your account.
Before you jump, check with the Better Business Bureau, and double check phone numbers and addresses with an independent source. The phone number the scammers give you may ring somewhere, and even be answered appropriately, but you can't know that it isn't in someone's kitchen, rather than a call center in a bank or business.
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Phishing
Careful with that PIN!
A scam that is flourishing on the internet is called "Phishing." It usually comes as an e-mail that looks like it's from a trustworthy site, such as
Pay Pal or Citibank, or any financial institution. It will say something to the effect that for security reasons, they need you to verify your personal information, or they may need to close down your account.
No financial institution would EVER ask you to do this by e-mail.
Don't respond!
For more information about phishing, and how to report it if you get one, The Anti-Phishing Working Group (APWG) is an industry association focused on eliminating the identity theft and fraud that result from the growing problem of phishing and email spoofing.
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IRS scams
The US Internal Revenue Service will never send you an unsolicited e-mail about a tax problem or refund. And furthermore, the IRS will never send you an e-mail asking for your personal or banking information. After all, they already have it!
At this point, the U.S. Treasury has identified dozens of IRS-related “phishing” scams. These scam websites have been located in at least 20 different countries. They will claim to be from the IRS, tell recipients they are due a federal tax refund, and direct them to a counterfeit website that looks like a genuine IRS site. These sites have have official looking forms asking for your personal information, including banking information, passwords and PINs. Don't do it!!
For more information about this scam, read this article from the REAL IRS website.
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Pharming
Defense is the best defense.
A new internet scam is starting to make an impact on the internet. It is called "Pharming." It is a scam that works sort
of like phishing, by making it look like you are on a legitimate banking or financial site, when in fact you aren't. The scary
thing about pharming is that it doesn't require clicking on an
e-mail, or action on your part. It is a trojan horse virus that infects your system, and hijacks your browser as you go to
the link it is programmed for. It redirects you to one that the scammers have constructed that looks just like the one you meant to go to. Then it captures your keystrokes as you enter the site, and sends them to the scammers. That's the bad news. The good news is that so far, the versions of this virus that have been out there have had a fatal bug that prevented them from doing exactly what the scammers wanted it to, but that won't last.
What can you do to avoid this? The first line of defense is to keep your anti-virus software up-to-date. It's worth the money and the time! Get it on an automatic update plan, so that you are as protected as possible. Other safeguards are Netcraft for Microsoft's Internet Explorer users or Spoofstick for either Internet Explorer or Mozilla's Firefox browser. These let you check the actual name and, depending on which one you choose, can show the location of the site you are on. Unless you bank in the Soviet Union, it's unlikely that your financial institution's site is hosted there. Ours definitely isn't!!
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