ADVANCE FEE SCAM
- If the offer of an “opportunity” appears too good to be true, it probably is. Follow common business practice. For example, legitimate business is rarely conducted in cash on a street corner.
- Know who you are dealing with. If you have not heard of a person or company that you intend to do business with, learn more about them. Depending on the amount of money that you intend to spend, you may want to visit the business location, check with the Better Business Bureau, or consult with your bank, an attorney, or the police.
- Make sure you fully understand any business agreement that you enter into. If the terms are complex, have them reviewed by a competent attorney.
- Be wary of businesses that operate out of post office boxes or mail drops and do not have a street address, or of dealing with persons who do not have a direct telephone line, who are never “in” when you call, but always return your call later.
- Be wary of business deals that require you to sign nondisclosure or noncircumvention agreements that are designed to prevent you from independently verifying the bona fides of the people with whom you intend to do business. Con artists often use noncircumvention agreements to threaten their victims with civil suit if they report their losses to law enforcement.
AUCTION FRAUD – INTERNET
- Understand as much as possible about how the auction works, what your obligations are as a buyer, and what the seller’s obligations are before you bid.
- Find out what actions the web site/company takes if a problem occurs and consider insuring the transaction and shipment.
- Learn as much as possible about the seller, especially if the only information you have is an e-mail address. If it is a business, check the Better Business Bureau where the seller/business is located.
- Examine the feedback on the seller.
- Determine what method of payment the seller is asking from the buyer and where he/she is asking to send payment.
- If a problem occurs with the auction transaction, it could be much more difficult if the seller is located outside the US because of the difference in laws.
- Ask the seller about when delivery can be expected and if there is a problem with the merchandise is it covered by a warranty or can you exchange it.
- Find out if shipping and delivery are included in the auction price or are additional costs so there are no unexpected costs.
- There should be no reason to give out your social security number or drivers license number to the seller.
Review and remember the following points to avoid becoming an easy target:
- Sign all credit cards when you receive them
- Never loan your credit cards to anyone
- Cancel credit cards you do not use and keep a list of the ones you use regularly
- Immediately report lost or stolen credit cards and any discrepancies in your monthly statements to the issuing credit card company
- Never leave receipts at bank machines, bank wickets, in trashcans, or at unattended gasoline pumps; ensure you destroy paperwork you no longer need
- Never provide personal information such as SIN, date of birth, credit card numbers, or PIN over the telephone unless you initiate the call
- Promptly remove mail from your ‘secure’ mailbox after delivery and do not leave pieces of mail lying around your residence or work site
- Shred or otherwise destroy pre-approved credit card applications, credit card receipts, bills and related information when no longer needed
- Avoid keeping a written record of your bank PIN number(s), social insurance number and computer passwords, and never keep this information in your wallet or hand bag
- Avoid mail or telephone solicitations disguised as promotions or surveys offering instant prizes or awards designed for the purpose of obtaining your personal details including credit card numbers
To avoid becoming a scam lottery victim, remember these points:
- Ask yourself ‘How could I win a lottery prize if I haven’t bought a ticket?’
- Usually, if you win something you don’t have to pay anything to receive your prize
- Once you respond to bogus promotions, your name and address is likely to be placed on other lists for similar scams
- If asked to use a premium rate telephone number, remember these can be very expensive and may be part of the scam
- Never reveal credit card or bank account details unless absolutely sure who you’re dealing with. These details may be asked for as ‘identification’.
Typical warning signs include:
- The approach, whether in writing, by phone or by email, is unsolicited
- There is a very short time in which to respond to claim your prize or winnings
- An invitation to send a ‘processing’ or ‘administration’ fee to obtain a prize or reward
- The need to use premium rate phone lines
- The source of the promotion is based overseas
- An invitation to send money out of the country, particularly to the Netherlands or Canada, by money transfer
- Prizes are expressed in foreign currency
- An invitation to provide credit card or bank account details.
How to protect yourself:
- Remember that if you win something you shouldn’t have to pay anything to receive your prize
- Do not enter sweepstake contests unless they are run by a company you know
NIGERIAN 419 SCAMS / FRAUD
- If you receive a letter from Nigeria asking you to send personal or banking information, do not reply in any manner. Send the letter to the U.S. Secret Service or the FBI.
- If you know someone who is corresponding in one of these schemes, encourage that person to contact the FBI or the U.S. Secret Service as soon as possible.
- Be skeptical of individuals representing themselves as Nigerian or foreign government officials asking for your help in placing large sums of money in overseas bank accounts.
- Do not believe the promise of large sums of money for your cooperation.
- Guard your account information carefully.
NON-DELIVERY OF MERCHANDISE
- Make sure you are purchasing merchandise from a reputable source.
- Do your homework on the individual or company to ensure that they are legitimate.
- Try to obtain a physical address rather than merely a post office box and a phone number, call the seller to see if the number is correct and working.
- end them e-mail to see if they have an active e-mail address and be wary of sellers who use free e-mail services where a credit card wasn’t required to open the account.
- Consider not purchasing from sellers who won’t provide you with this type of information.
- Check with the Better Business Bureau from the seller’s area.
- Check out other web sites regarding this person/company
- Don’t judge a person/company by their web site
- Be cautious when responding to special offers (especially through unsolicited e-mail).
- Be cautious when dealing with individuals/companies from outside your own country.
- Inquire about returns and warranties.
- The safest way to purchase items via the Internet is by credit card because you can often dispute the charges if something is wrong.
- Make sure the transaction is secure when you electronically send your credit card numbers.
- Consider utilizing an escrow or alternate payment service
ONLINE AUCTION FRAUD
- Tips to protect yourself:
- Deal with companies or individuals you know by reputation or experience. If you aren’t familiar with the company, do your research. Find out their address and phone number. Do not conduct business with a company that doesn’t list a physical address or telephone number on its Web site.
- Read the terms and conditions of the contract to make sure you understand the delivery options, return policy, and product or service warranty. For international transactions, ask for information about the exchange rate and any applicable duties and taxes.
- Ensure the business has a fair and clear process for submitting complaints and/or cancelling orders.
- Make sure transactions are secure. Do not enter any financial information if you see a broken-key or open padlock symbol on your Internet browser. This means that the transaction is not secure and could be intercepted by a third party. When the key is complete or the padlock is locked, your browser is indicating a secure transaction.
- Remember, unlike secure order forms on a Web site, e-mail messages are not private. Do not send confidential personal or financial information by e-mail.
- Talk to your children about online activities. Instruct them to keep their personal information private unless you approve.
How to prevent: Avoid embedded links in an e-mail claiming to bring you to a secure site. In some cases, the offending site can modify your browser address bar to make it look legitimate, including the web address of the real site and a secure “https://” prefix.
- Never e-mail personal or financial information
- Use anti-spyware, firewall and anti-virus software
- Don’t forget to update software on a regular basis
Are you a victim? If you have provided personal information:
Step 1. Contact all compromised card issuers.
Step 2. Contact your credit bureau.
It’s very difficult to get your money back if you’ve been cheated over the phone. Before you buy anything by telephone, remember:
- Don’t buy from an unfamiliar company. Legitimate businesses understand that you want more information about their company and are happy to comply.
- Always ask for and wait until you receive written material about any offer or charity. If you get brochures about costly investments, ask someone whose financial advice you trust to review them. But, unfortunately, beware — not everything written down is true.
- Always check out unfamiliar companies with your local consumer protection agency, Better Business Bureau, state Attorney General, the National Fraud Information Center, or other watchdog groups. Unfortunately, not all bad businesses can be identified through these organizations.
- Obtain a salesperson’s name, business identity, telephone number, street address, mailing address, and business license number before you transact business. Some con artists give out false names, telephone numbers, addresses, and business license numbers. Verify the accuracy of these items.
- Before you give money to a charity or make an investment, find out what percentage of the money is paid in commissions and what percentage actually goes to the charity or investment.
- Before you send money, ask yourself a simple question. “What guarantee do I really have that this solicitor will use my money in the manner we agreed upon?”
- You must not be asked to pay in advance for services. Pay services only after they are delivered.
- Some con artists will send a messenger to your home to pick up money, claiming it is part of their service to you. In reality, they are taking your money without leaving any trace of who they are or where they can be reached.
- Always take your time making a decision. Legitimate companies won’t pressure you to make a snap decision.
- Don’t pay for a “free prize.” If a caller tells you the payment is for taxes, he or she is violating federal law.
- Before you receive your next sales pitch, decide what your limits are — the kinds of financial information you will and won’t give out on the telephone.
- It’s never rude to wait and think about an offer. Be sure to talk over big investments offered by telephone salespeople with a trusted friend, family member, or financial advisor.
- Never respond to an offer you don’t understand thoroughly.
- Never send money or give out personal information such as credit card numbers and expiration dates, bank account numbers, dates of birth, or social security numbers to unfamiliar companies or unknown persons.
- Your personal information is often brokered to telemarketers through third parties.
- If you have information about a fraud report it to state, local, or federal law enforcement agencies.
How to prevent:
- As a general rule, be suspicious when receiving any unsolicited incoming communication.
- Never provide personal information in these circumstances.
- Never rely solely on your telephone caller ID function.
If you’re suspicious:
- Consumers have a role to play in stopping vishing scams. You are encouraged to Recognize it, Report it and Stop it.
- Do not react immediately without thinking.
- If this concerns you, investigate by using telephone numbers known to be valid. In the case of credit cards for example, use the telephone number printed on the back of the card.
- Never provide personal or financial information to non-validated sources.
For more articles like this one, please check out Fraud Investigator. Also check out the other posts in our Safety and Security Section on this blog or read our Avoid Scams section for more information.