Scammed! A Look at Summer Fraud Trends to Avoid All Year Long
By: John Buzzard – Fraud Specialist for CO-OP Financial Services
According to a recent Nilson report, global card fraud will reach $43.8 billion this year. While artificial intelligence, machine learning and other security innovations being implemented by financial institutions and credit card companies are helping to reduce fraud on all fronts, among the best weapons in this fight is an informed and vigilant consumer.
Here are this summer’s most prevalent financial scams that have been catching people by surprise – and for you to be watchful for all year long:
1. Gift cards, secret shoppers and the allure of fake offers
This scam works as follows: consumers are drawn in by a phony email or social media post to become a “secret shopper” in exchange for some form of financial gain.
When a consumer agrees to participate, the fraudster seals the deal by delivering a very large counterfeit check. The criminal then asks the consumer to deposit the check and purchase gift cards with the funds – keeping a small portion of the proceeds as compensation for being the “secret shopper.”
The victim is asked to email photographs of the gift cards, front and back, so the criminal can use them immediately – before the counterfeit check has a chance to bounce.
2. “You can never be too rich or too thin” – and other email scams
Some consumers are attracted to “get rich” and “get thin” offers, and unfortunately an age-old diet scam has surfaced again, targeting consumers with spam emails. When an unwitting consumer signs up for the “self-improvement” deal, that individual agrees to recurring billing for the proposed service. It pays to read and re-read the fine print to avoid a billing trap.
3. Counterfeit money orders
Fake money orders are frequently used for online purchases from websites like Craigslist. The problem is that high-quality counterfeit money orders are hard to distinguish from the real thing. It is suggested that before you exchange goods or services involving money orders that you at least require them to be US Postal Service money orders so that your local post office can help to verify them upon presentment.
4. “MSN” help desk fraud
This form of fraud is usually directed at the elderly. A criminal calls an unsuspecting consumer and warns that his or her PC – however seldom used – is riddled with viruses.
The fake technician offers to assist, and then dispatches the victim to a local big box store to buy prepaid gift cards which are given as payment for the tech support services. If you find yourself involved with similar circumstances you should refrain from purchasing gift cards or sending wire transfers. This scam is always fake. There are wonderful resources available from AARP’s Fraud Watch Network including scam alerts that are delivered directly to your email or phone.
5. Card cracking
This rip-off scheme typically victimizes younger consumers. A fraudster reaches out to a young person via social media and convinces the potential victim that they can both benefit by helping each other out – with the young account holder receiving a small sum – $100 or so – as compensation for cooperating with the fraudster.
The victim then gives the criminal access to his or her online banking credentials, so the criminal can deposit counterfeit checks into the account.
The fraudster also typically requires the usage of the account holder’s debit card and, in some cases, accompanies the co-conspirator to an ATM to perform withdrawals against the counterfeit checks that have been deposited. This is especially troubling if the account holder is a minor in the company of an adult criminal. Don’t be drawn into this scam by any means. Call your local police and ask them to help you with a suspected card cracking scenario.
6. Direct mail scams
Bogus – but official-looking – letters are delivered every day to random consumers with stern requests for social security numbers and other personally identifiable information.
Some of these letters are printed on what looks like big bank letterhead and, in all cases, there is at least one “official looking” hard-copy form that the consumer is asked to fill out and return. There is never a moment that your credit card issuer, credit bureau or financial institution will ever make a legitimate request for this information. If you question something you receive in the mail call your financial institution directly or visit your local branch. Don’t forget to take along a copy of the suspected scam documents.
7. What should you do if you believe you’ve been scammed?
The most important things that every consumer needs to do are monitor for unusual transactions on their individual credit card and checking accounts, followed by reporting any unusual transactions directly to the card issuer. If you suspect that someone is impersonating your financial institution or credit card issuer it is essential that you remain calm and contact the correct corporate customer service number to verify whether you are being victimized.
Many card issuers today offer online card alerts that deliver warnings to the card issuer when anomalous activity occurs and quite a few card issuers also offer card controls that enable the cardholder to literally turn their payment cards on and off at will.
If you stay vigilant, it can help you avoid being a victim of fraud. An informed consumer is an empowered one!