Know the scam to avoid it
As we begin 2012, I thought it would be useful to reflect on what our nationwide Better Business Bureau system has categorized as the worst swindles of 2011. All of these scams are ongoing — and in some cases escalating.
Sweepstakes and lotteries
These come in all shapes and sizes, but they almost always begin with, "You've won (or are a finalist to win) a whole lot of money. To claim your winnings (or maybe to register for the final drawing) you must send us a smaller amount of money." Folks are almost always told to keep their windfall secret, until the firm is "ready to make the announcement." If you aren't sure it's genuine, don't click on the link. And remember: A legitimate sweepstakes or lottery will never ask you to send any money to collect your prize.
Advanced fee loans
These scam artists often impersonate legitimate lenders and use ads and promotions that guarantee approval regardless of an applicant's credit history. Just last week, an Omaha woman lost thousand of dollars after being notified that she qualified for a $10,000 loan. She was informed that, because of her poor credit, she would be required to pay substantial processing fees and make the first few payments in advance. After wiring nearly $3,000 to Kingsview Loan Brokers, whose website appeared to be that of a legitimate Rhode Island business, she learned that the firm doesn't exist. The money she sent, which she had borrowed from relatives, is gone for good.
Check cashing
Here's how it works: Someone contacts you via a Craigslist posting, maybe for a legitimate reason like buying your bookshelf or perhaps a phony offer to hire you as a secret shopper. Either way, they send you a check for more than the amount they owe you, and they ask you to deposit it in your bank account and send them the difference via Western Union. A deposited check takes a couple of days to clear, whereas wired money is gone instantly. When the original check bounces, you are out whatever money you wired.
Financial help offers
In challenging economic times, many people are looking for help getting out of debt or desperately trying to hang on to their homes. Because the federal government expanded several mortgage relief programs this year, all kinds of sound-alike websites have popped up to fool consumers into parting with their money. Some sound like government agencies or nonprofit consumer organizations. Most ask for substantial upfront fees to help you deal with your mortgage company (which you could do yourself, for free) and almost all leave you in more debt than when you started.
Social media/online dating
On the Internet, it's easy to pretend to be someone you are not. Are you really friends with all of your "friends" on Facebook? Do you have a lot of personal information on a dating site? With so much information about us available online, criminals can gather enough details to make us think they knows us.
Viral videos have shown up on social media sites, often looking as if they have been shared by friends. When curious users click on such links, they are prompted to "upgrade Flash player." The file downloaded contains a virus that logs into their social media account, sends similar messages to their friends and seeks out personal data, which can be used for identity theft. The next time you see a sensational headline for the latest viral video, resist the urge to peek.
Phishing
Hundreds of thousands, perhaps millions, of people have received emails that appear to be from the Better Business Bureau. The subject line says something like "Complaint Against Your Business," and the instructions tell the recipient to either click on a link or open an attachment to get details. If the recipient follows the instructions, it launches a virus that steals banking information, passwords and other critical pieces of information needed for cyber-theft. BBB is working with security consultants and federal law enforcement to track down the source of these emails. Anyone who has opened such an attachment or clicked on its link should run a complete system scan using reputable anti-virus software.
Credit cards
You get a call in your hotel room in the middle of the night. It's the front desk clerk, very apologetic, saying their computer has crashed and they need to get your credit card number again, or perhaps that they must have gotten the number wrong because the transaction won't go through. They ask you to please read the number back so they can fix the problem. Many people are too sleepy to catch that the call isn't from the hotel at all, but from someone who is just trying to pilfer your pocketbook. By the time morning rolls around and you are clear-headed, your credit card has already been on a major shopping spree.
Jobs
Our BBB receives calls regularly from people who have fallen for bogus "work from home" offers. Emails and websites offering such employment opportunities (almost always through online applications) can look very professional. In some cases, a candidate is even interviewed (usually over the phone) before receiving a "job offer." In order to start in the new position, however, the candidate is required to provide personal information so the firm can run a credit check and a background report. Candidates also may be asked to provide bank information for direct deposit of their "paychecks." These forms are nothing more than a way for thieves to capture Social Security numbers, bank accounts and other senstive data — and, of course, there is no job.
Grandparents
In the last year, it's estimated that 60,000 senior citizens in the U.S. have been victimized by the grandparent scam. Thieves are now using social networking sites like Facebook to get detailed personal information about families they use to coax people out of a whole lot of money.
Typically, the victim receives a frantic phone call from someone they are led to believe is their grandchild. A scammer, posing as the grandchild, explains that he or she has gotten into trouble — often in Canada — and needs help. Sometimes, victims are contacted by someone claiming to be a police officer or lawyer representing the grandchild.
The "grandchild" begs for his parents not to be told and asks the victims to wire thousands of dollars for reasons such as posting bail, repairing the grandchild's car, covering lawyer's fees or even paying hospital bills for a person the grandchild injured in a car accident. A couple in Wisconsin recently sent $19,000 to swindlers posing as their grandson and his lawyer.
Because stopping scammers, many of whom have mastered the methods of illegal activity and are conducting their "business" from faraway lands, is such an insurmountable challenge, I write this column to keep readers informed and aware. We might not be able to eradicate all of these criminals, but we certainly can avoid being exploited by them.
The Better Business Bureau offers a comprehensive resource called Scam Source (www.bbb.org/scam). The site details scam investigations from BBBs around the country. This new website also helps visitors to detect scams themselves and to report scams they've discovered. Consumers and businesses are encouraged to sign in and ask to get our Scam Alerts via email.
Jim Hegarty is president of the Better Business Bureau representing Nebraska and southwest Iowa. To contact him, email to jhegarty@bbbnebraska.org or call 402-898-8520.
Sweepstakes and lotteries
These come in all shapes and sizes, but they almost always begin with, "You've won (or are a finalist to win) a whole lot of money. To claim your winnings (or maybe to register for the final drawing) you must send us a smaller amount of money." Folks are almost always told to keep their windfall secret, until the firm is "ready to make the announcement." If you aren't sure it's genuine, don't click on the link. And remember: A legitimate sweepstakes or lottery will never ask you to send any money to collect your prize.
Advanced fee loans
These scam artists often impersonate legitimate lenders and use ads and promotions that guarantee approval regardless of an applicant's credit history. Just last week, an Omaha woman lost thousand of dollars after being notified that she qualified for a $10,000 loan. She was informed that, because of her poor credit, she would be required to pay substantial processing fees and make the first few payments in advance. After wiring nearly $3,000 to Kingsview Loan Brokers, whose website appeared to be that of a legitimate Rhode Island business, she learned that the firm doesn't exist. The money she sent, which she had borrowed from relatives, is gone for good.
Check cashing
Here's how it works: Someone contacts you via a Craigslist posting, maybe for a legitimate reason like buying your bookshelf or perhaps a phony offer to hire you as a secret shopper. Either way, they send you a check for more than the amount they owe you, and they ask you to deposit it in your bank account and send them the difference via Western Union. A deposited check takes a couple of days to clear, whereas wired money is gone instantly. When the original check bounces, you are out whatever money you wired.
Financial help offers
In challenging economic times, many people are looking for help getting out of debt or desperately trying to hang on to their homes. Because the federal government expanded several mortgage relief programs this year, all kinds of sound-alike websites have popped up to fool consumers into parting with their money. Some sound like government agencies or nonprofit consumer organizations. Most ask for substantial upfront fees to help you deal with your mortgage company (which you could do yourself, for free) and almost all leave you in more debt than when you started.
Social media/online dating
On the Internet, it's easy to pretend to be someone you are not. Are you really friends with all of your "friends" on Facebook? Do you have a lot of personal information on a dating site? With so much information about us available online, criminals can gather enough details to make us think they knows us.
Viral videos have shown up on social media sites, often looking as if they have been shared by friends. When curious users click on such links, they are prompted to "upgrade Flash player." The file downloaded contains a virus that logs into their social media account, sends similar messages to their friends and seeks out personal data, which can be used for identity theft. The next time you see a sensational headline for the latest viral video, resist the urge to peek.
Phishing
Hundreds of thousands, perhaps millions, of people have received emails that appear to be from the Better Business Bureau. The subject line says something like "Complaint Against Your Business," and the instructions tell the recipient to either click on a link or open an attachment to get details. If the recipient follows the instructions, it launches a virus that steals banking information, passwords and other critical pieces of information needed for cyber-theft. BBB is working with security consultants and federal law enforcement to track down the source of these emails. Anyone who has opened such an attachment or clicked on its link should run a complete system scan using reputable anti-virus software.
Credit cards
You get a call in your hotel room in the middle of the night. It's the front desk clerk, very apologetic, saying their computer has crashed and they need to get your credit card number again, or perhaps that they must have gotten the number wrong because the transaction won't go through. They ask you to please read the number back so they can fix the problem. Many people are too sleepy to catch that the call isn't from the hotel at all, but from someone who is just trying to pilfer your pocketbook. By the time morning rolls around and you are clear-headed, your credit card has already been on a major shopping spree.
Jobs
Our BBB receives calls regularly from people who have fallen for bogus "work from home" offers. Emails and websites offering such employment opportunities (almost always through online applications) can look very professional. In some cases, a candidate is even interviewed (usually over the phone) before receiving a "job offer." In order to start in the new position, however, the candidate is required to provide personal information so the firm can run a credit check and a background report. Candidates also may be asked to provide bank information for direct deposit of their "paychecks." These forms are nothing more than a way for thieves to capture Social Security numbers, bank accounts and other senstive data — and, of course, there is no job.
Grandparents
In the last year, it's estimated that 60,000 senior citizens in the U.S. have been victimized by the grandparent scam. Thieves are now using social networking sites like Facebook to get detailed personal information about families they use to coax people out of a whole lot of money.
Typically, the victim receives a frantic phone call from someone they are led to believe is their grandchild. A scammer, posing as the grandchild, explains that he or she has gotten into trouble — often in Canada — and needs help. Sometimes, victims are contacted by someone claiming to be a police officer or lawyer representing the grandchild.
The "grandchild" begs for his parents not to be told and asks the victims to wire thousands of dollars for reasons such as posting bail, repairing the grandchild's car, covering lawyer's fees or even paying hospital bills for a person the grandchild injured in a car accident. A couple in Wisconsin recently sent $19,000 to swindlers posing as their grandson and his lawyer.
Because stopping scammers, many of whom have mastered the methods of illegal activity and are conducting their "business" from faraway lands, is such an insurmountable challenge, I write this column to keep readers informed and aware. We might not be able to eradicate all of these criminals, but we certainly can avoid being exploited by them.
The Better Business Bureau offers a comprehensive resource called Scam Source (www.bbb.org/scam). The site details scam investigations from BBBs around the country. This new website also helps visitors to detect scams themselves and to report scams they've discovered. Consumers and businesses are encouraged to sign in and ask to get our Scam Alerts via email.
Jim Hegarty is president of the Better Business Bureau representing Nebraska and southwest Iowa. To contact him, email to jhegarty@bbbnebraska.org or call 402-898-8520.
