This is one of the most prolific types of fraud. Scammers prey on good people. So how do you know who is legit and who isn't? There are many worthy organizations.
But what if you receive a charitable solicitation from an organization you've never heard of? To guard against being taken advantage of follow these guidelines when
donating to charities:
- Make checks payable to an organization only--never an individual.
- Be suspicious of solicitors who say they will only accept cash only. (Con artists want cash so there will be no paper trail for authorities to follow.)
- Report any suspicious organizations to your local postmaster or Postal Inspector.
Check out organizations you're unfamiliar with, or whose names are similar to well-known charities. You can do this by visiting the Bureau's Wise Giving Alliance web
site, or by contacting them at BBB Wise Giving Alliance, 4200 Wilson Blvd., Suite 800, Arlington, VA 22203.
If you're unfamiliar with the charity, ask for its annual report and financial statement. If the organization is not willing to provide these financial documents, you
should immediately be suspicious.
Consider giving locally – these are organizations and locations that you may be able to drive to and check them out yourself. Back to Top
EMAIL COMPROMISE / WIRE FRAUD
The NCFTA, along with its law enforcement and industry partners, has observed that cyber criminals are gaining access to compromised email accounts and leveraging the relationship between the email account holder and their financial advisor to request unauthorized wire transfers. The criminals either use the existing email address or slightly change the email address by adding or supplementing a letter or number. The criminals then typically attempt to socially engineer the advisor through stories of hardship or loss in order to justify the wire transfer.
Once the criminals have verified the amount in the account, they request that funds be sent to bank accounts in the US, Australia, and Malaysia. Some of the funds sent to US and Australian accounts have ultimately been sent to Malaysian accounts. Some of the money mules were recruited by romance scams on dating websites. Banks, brokerage firms, and credit unions of all sizes have been affected by this scam.
Please see http://www.ic3.gov/media/2012/EmailFraudWireTransferAlert.pdf for additional information on this scam and guidance on how to report such incidents to law enforcement. Back to Top
First – for you to be reading this, you or a loved one is being victimized – or maybe you are just not quite sure yet. This can be difficult as you are NOT even
certain what should be done. Whether you or a loved-one is being victimized, you need guidance on what to do, and who to report it to. I have links on this web site to
various agencies that also have guidance for you. Assess all that is offered before deciding what to do. Much of the advice is repetitive – but it is good to know.
Over the years I received many complaints of seniors victimized in scams, with their adult children just finding out about it. Though losses are more often a few
thousand dollars, I have had victims that lost hundreds of thousands, and one well over a million dollars – the scammers will not relent until they have it all. Most
of the complaints relate to winning a foreign lottery with the money being sent out of the country. These investigations have limited success in identifying the suspects
overseas. In almost all cases, even if the suspects are identified, the money has already been dissipated and no recuperation can be made.
There are many source countries where these scams emanate from (about 10), but it frequently involves Nigeria or Jamaica. Though these countries are “friendly” with the
USA, they are not sympathetic to our issues. They have their own troubles and crime to investigate, and often do not have the resources to investigate foreign complaints
when their own citizens are not the victim. This does not mean that you shouldn’t file a complaint – you should – you never know what positive things may come of it. It
also may help the “next” victim.
If the victim has sent money (usually by money gram) to another country – then it is obvious as to what is occurring. But if the money was sent to another location in the
USA, do not get your hopes up too high. More often the bad guys are using intermediaries. These are often senior citizens just like Mom & Dad who thought they won the
lottery but ran out of money to pay the “fees” to collect their winnings. The victim is then told by the bad guys that in order to receive their winnings, they need to
work it off by forwarding fees from other “lottery winners”. Either way, the intermediaries have sent the money out of the country.
Here are some basic suggestions for seniors to do (or their adult children):
- DO NOT ANSWER THEIR CALLS – you will NEVER convince the caller to stop calling – even police officers have answered the senior’s phone and told the scammers not
to call again – scammers laugh at this and keep calling after the officer has left (though Nigerians typically do most of their communications by email, Jamaicans do not.
The Jamaican scammers are nasty, threatening, intimidating and will scare any senior. They have been known to call a victim dozens of times in a day, at all hours, in order
to intimidate them into sending money. This comes after they have been “sweet and nice” to the victim – but when that didn’t work – watch out! They do almost all of their
communications by phone.)
- Change the phone number if possible (some seniors do not like this option - but it is the best)
- Install an answering machine. Have the recording give the phone number – no names. Have a young strong voice make the message (or automated voice)
- Insist that the senior screen every call before they answer the phone. Scammers do NOT like to leave a message and will stop sooner.
- Consider meeting with their bank branch to see if they can help. It’s nothing new to them so don’t be embarrassed. Bank personnel have assisted in many cases.
- Consider taking over the senior’s finances or being a joint account holder – this is the hardest thing – and only necessary in some situations where other
interventions have not worked. (Being a joint account holder gives you access to oversight of the money movement without impeding your parent’s ability to write checks.
This way you can see if Mom or Dad are “moving” money or taking out cash – the best indicator of a scam.
- Please know this – if a scammer has no success with getting money, they will sell the name and phone number to other scammers and the cycle will continue.
The secret is NOT to confirm the name or number – so if you are worried about your elderly Mom & Dad being victimized – get ahead of the scam. Get an answering machine
giving only the phone number. Screen the calls. As for emails – it’s like an open door to the house. Do not respond to emails from unknown sources. Do NOT open links in
those emails whatever you do. Educate Mom & Dad and work as a team.
Please take a moment to familiarize yourself with additional resources for guidance. Back to Top
INVESTMENT FRAUD (PONZI SCHEMES)
Even smart investors can fall for a well-orchestrated Ponzi scheme. That’s because they offer high rates of return that are practically impossible to match in any marketplace –
and for good reason. A Ponzi scheme relies on money from investors, rather than from actual profit, to pay the promised returns, dooming it to failure.
The scheme was named after Charles Ponzi, a Boston man convicted in 1920 for duping about 30,000 Americans of an estimated $10 million. The scam works just as well today as it
did back then. Ponzi schemes are usually marketed by slick fraudsters who surround themselves with the trappings of legitimacy—nice office space, a receptionist, investment
counselors, and professionally designed color brochures describing the investment.
There’s only one thing you can count on in a Ponzi scheme: The money you invest will be money lost. You may not even receive the promised interest—and if you do, it’s usually
paid late and came from another victim.
If you answer “yes” to any of the following questions, you’re probably dealing with a swindler:
- Does the promoter make it sound as if you can't lose?
- Are you promised an unusually high rate of return or interest payment on your capital?
- Are you pressured to make a quick decision because new investment units “are selling fast?”
- Does the promoter have prior successful experience in the investment area being promoted?
Many schemes target friends and relatives, so be cautious when the nephew (you never spoke often to) suddenly becomes interested in your financial well-being. Ponzi’s often rely
on one investor unwittingly pulling in other investors. If you feel compelled to invest with a relative, do it with a small amount – just in case.
Protect yourself. Be suspicious of any deal that promises a fantastic return with little risk. Know whom you are dealing with. Check the company’s reputation with your
local Better Business Bureau, or state Attorney General’s Office. Protect your retirement nest egg. Back to Top
Insurance fraud victimizes everyone – we all pay higher premiums because of the payouts insurance companies make on false claims.
If you suspect you've discovered an insurance scheme, you can report it safely, easily and anonymously in most cases — and help lower the cost
everyone pays for fraud. Here are several ways...
Most states sponsor fraud bureaus that investigate insurance scams. Some states even reward whistleblowers if there's a conviction.
Check here to to see if your state has an insurance fraud bureau.
Contact the insurance company you think was defrauded. A few insurers sponsor toll free hotlines.
Call or write if the company doesn't have a hotline.
National Insurance Crime Bureau:
Call the toll-free hotline of the National Insurance Crime Bureau — 1-800-835-6422. NICB investigates insurance crimes involving property and casualty
insurance, including auto and home insurance, liability insurance, and workers compensation.
Medicaid & Medicare:
If you think you've discovered a scheme to bilk these federal health programs, call 1-800-447-8477 or click here for Medicaid information
and here for Medicare information. You can also report fraud by e-mail to: HHSTips@oig.hhs.gov. Back to Top
Other helpful links:
SOLICITATIONS DISGUISED AS INVOICES
Don't be victimized by con artists who try to get your company to order goods or services by mailing you solicitations designed to look like invoices. These are sent to
unsuspecting managers and employees who are fooled by their appearance and will automatically remit payment, thinking the company had placed an order.
Title 39, United States Code, Section 3001, makes it illegal to mail a solicitation in the form of an invoice, bill, or statement of account due unless it conspicuously
bears a notice on its face that it is, in fact, merely a solicitation. This disclaimer must be in very large type and must be in boldface capital letters in a color that
contrasts prominently with the background against which it appears. The disclaimer must not be modified, qualified, or explained, such as with the phrase "Legal notice required by law."
Some solicitations disguise their true nature. Others identify themselves as solicitations, but only in the "fine print." In either case, protect your company's assets by
withholding payment until you have verified whether your company actually ordered and received the goods or services. Even better, start an approved vendor list for your
company to use. Be sure that no vendor can be on the list until they have been properly vetted. Back to Top
OIL & GAS INVESTMENT FRAUD
If you are contemplating investing a large amount of money, oil and gas wells may be among the options you are considering. Regardless of what investment opportunities you're considering,
it is wise to gather all the information you can so you can make an informed decision. And beware.
Some oil and gas-well deals are offered by "boiler rooms," or fly-by-night operations that consist of nothing more than bare office space and a dozen or so desks and telephones. Boiler
room operators employ slick telephone solicitors trained to use high-pressure sales tactics. These con artists will make repeated unsolicited telephone calls in which they follow a
carefully scripted sales pitch that guarantees high profits. Some swindlers surround themselves with the trappings of legitimacy, including professionally designed color brochures.
In a fraudulent oil and gas scheme, scam artists promoting the investment often usually offer limited partnership interests to prospective investors who live outside the state where
the well is located and outside the state the scam artists are calling from. This reduces chances for an investor to visit the site of a well or what may be a nonexistent company headquarters.
If you are subjected to a high-pressure sales pitch in an unsolicited telephone call, watch for the following tip-offs that you may be dealing with a swindler:
- The oil well investment "can't miss."
- There is very little risk involved.
- The promoter has hit oil or gas on every other well previously drilled.
- A lot of oil or gas has been found in an adjacent field.
- A large reputable oil company is already operating near the company's leased property, or is planning to do so.
- A decision must be made immediately to invest in order to assure the purchase of a one of the few interests remaining to be sold.
- The deal is only available to a few lucky and specially chosen investors.
- The salesperson has personally invested in the venture himself.
- A tip from a reputable geologist has given the company a unique opportunity to make its venture a success.
If you believe it is a scam report it right away to your local police. They will know who to contact for additional follow-up. Back to Top
Whether you're looking for an investment, a vacation home or a place to retire, you need to exercise caution before buying a piece of land. Attractive real estate brochures
in the mail may indicate the land is in a warm and hospitable climate with recreation and conveniences nearby.
However, if you don't personally see the land, you may later discover too late that it is in the middle of nowhere, far away from utilities and other amenities, and cannot
be resold for even a fraction of the price you paid.
Before buying real estate, a wise and cautious investor should:
- Visit the property before deciding whether to buy.
- Get any verbal promises and guarantees put into writing.
- Obtain a property report from the salesperson or developer.
- Contact the local Better Business Bureau to determine if there have been any complaints against the developer.
- Contact a local real estate broker and obtain comparative prices for other plots of land nearby.
The Interstate Land Sales Full Disclosure Act (Title 15, United States Code, Sections 1701-1720) requires full disclosure of all material facts in the sale or lease
of certain undeveloped land The developers must provide each purchaser or renter with a property report containing certain information before the signing of any contract
or agreement for the sale or lease of the land.
To file a complaint or determine if there are complaints on file against a developer, a prospective buyer should contact the Department of Housing and Urban Development's
national Office of Interstate Land Registration, 451 7th Street, S.W. Room 9154, Washington, D.C. 20410. Remember, under the law, you have the right to cancel your sales
agreement within seven days of signing if you have already seen a property report (you may have more than seven days under some state laws). You may also have the right to
cancel the agreement within two years if you have not seen the property report before signing the agreement.
You should consult with an attorney first if you believe it could be fraud as there are so many variances on what you could be involved in. Back to Top
DISTRIBUTOR & FRANCHISE FRAUD
Distributorships and franchises can be profitable business ventures. Fast-food franchises, for example, offer great opportunities for those willing to invest substantial amounts of
money and time to succeed.
Unfortunately, not all franchise opportunities are legitimate. Con artists may create their own "investment" opportunities to lure inexperienced victims. The con artists promise
the world, but deliver little to nothing. Be cautious if you encounter come-ons such as these:
- Promises of unrealistic profits. Use common sense when evaluating offers. Will it really be as easy as claimed to make substantial profits?
- Promises of guaranteed earnings in a "protected market area." A bona fide business opportunity usually will not make sweeping guarantees. In fraudulent promotions, investors
may find others operating in the same supposedly "protected market area."
- Guaranteed money-back refund if not completely satisfied, as long as the investor "operates according to instructions." Such guarantees are usually worthless. The promoter
determines what "operating according to instructions" means, and the investor likely will be judged as not having met the criteria -- hence, no refund.
Be wary if a promoter is more interested in selling a distributorship or franchise than in marketing a product or service. And think twice about investing if you are not encouraged
-- or allowed to -- contact other investors to ask about their results. These scams are short-term, meaning they often fold-up their wagons and get out before anyone realizes. They
can be hard to find after that.
Your local Better Business Bureau or the Consumer Affairs Branch of your state Attorney General's Office may have information on the reputation of a distributorship or franchise
operation you are considering investing in. Back to Top
PHONY JOB OPPORTUNITIES
There are two ways to lose on these scams. The first is paying a fee and getting nothing for it. Just as bad, they want you to give your personal identifiers leaving you open to
Identity Theft. Beware of ads making unbelievable claims about job opportunities. You can be sure they misrepresent wages and the number of jobs actually available -- and they often
require you pay a fee to get more information. Job pitches such as these are bound to be phony:
- Guarantee job placement.
- No experience or special skills needed to qualify.
- Too-good-to-be-true wages.
- Overseas employment.
Con artists may offer training to “fill a critical shortage” in a specific field (such as truck driving or heavy equipment operation) that pays double or triple an applicant's
current salary. Applicants are assured jobs if they successfully graduate from the class. Offers such as these usually appear as a "business opportunity" rather than under a "school"
listing. But beware: Graduates will not be placed in jobs. The school will not be able to provide jobs and will not be associated with industry employers.
Some con artists try to sell catalogs listing companies supposedly hiring workers for various jobs, some of which may be “high-paying positions overseas.” If you buy the catalog --
often costing $30 or more –- you’ll find the companies are not hiring. And if the catalog comes with a money-back guarantee, it will include requirements difficult to meet.
If you fall victim to one of these and gave your personal information, start checking on your credit history immediately, and any credit card or checking account information
you gave. Back to Top
QUICK LINKS FOR:
EMail Compromise / Wire Fraud
Oil & Gas
Fraud Investigative Service, LLC
2199 Almanack Court
Pittsburgh, PA 15237
(412) 722 - 8380
Andrew Richards VCard
Fraud Investigative Service Scam Alert. Click Here.
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