Over the years, there have been a number
of scams that have evolved, which are designed to defraud consumers
and investors. In the past, many of these fraud schemes
were conducted through telemarketing, mail, or in person.
The global economy available through
the Internet has provided a new forum for these and other scams.
While there are new schemes appearing on
the Internet, there are a number of common ones you may come in
contact with. These include:
LOTTERY
SCHEMES
Winning a lottery that you did not enter,
paying an advanced fee for taxes, delivery or processing before
your winnings are released, receipt of cheque representing a
small portion of your prize so that you can forward taxes,
duties etc to release your winnings, request for banking
information so that prize can be deposited in your account are
all indications that you may be the target of a fraud.
AUCTION
AND E-COMMERCE FRAUD
One of the most common Internet fraud
schemes involves online auction sites, or Web sites that sell
items as retail vendors. In this scam, items are offered
for sale. The item may be an expensive watch, jewelry,
computer, collectibles, or other expensive goods. The
victim purchases the item, but doesn't receive what he or she
expected. Either nothing is delivered, or the victim
receives a counterfeit or less valuable item than was promised.
People who have listed an item for sale or
an apartment for rent on the Internet or newspaper have also
been targeted. Fraudsters will send a cheque or money
order in an amount greater than the asking price requesting the
seller to return or forward the 'overage' to another party,
often by money transfer. The cheque or money order
received will inevitably be returned a fraudulent of forged and
the victim will be held responsible for the loss.
Caution should be used anytime you are
asked to send money by money or 'wire' transfer to a person you
have not met personally. Electronically sending money by
this means is meant for sending money to persons you know and
are not meant to be used for commerce.
CREDIT
CARD FRAUD
The most common method of credit card
fraud on the Internet is obtaining another person's credit card
number, and then making online transactions with it. With
this scheme, the credit card is used to purchase items from
other Web sites, over the telephone, or other methods that don't
require the physical card to make a purchase. The victim
may provide the information initially purchasing something from
the criminal, entering information into a form on a Web site, or
any number of other methods. The criminal may max out the
credit card, but this isn't always the case. Small
purchases may be made, so that there is a good chance it may be
overlooked by the victim when he or she reads the monthly credit
statement.
Another credit card scheme involves a
variation of the e-commerce or auction fraud mentioned
above. In this particular scam, the criminal poses as a
legitimate e-commerce site or auction seller. The criminal
sells an item online at a price that's lower than normal, and
offers that no payment is necessary until after the item is
delivered. When a victim purchases an item, the scam goes
into action. The criminal use's the victim's real name
with another person's unlawfully obtained credit card number to
buy that product from another e-commerce site, and has it
shipped to the victim. Once the victim receives the item,
he or she then authorizes the credit purchase to be completed,
and the payment is made to the criminal.
There are multiple victims in this
crime. The legitimate e-commerce site who delivered the
item has been bilked out of the product and the money for
it. All they have is the name of the person it was
delivered to, and another person's unlawfully obtained credit
card number. The person who purchased the item from the
criminal believes the items paid for, but their name is now
attached to a fraudulent transaction made with the legitimate
e-commerce site. While this is being sorted out, the
criminal has the money and may be victimizing other individuals
and companies in this manner.
DIVORCE
SCHEMES
Offers of quick, uncontested divorces have
been offered over the Internet, which allow married couples to
get divorces for a relatively inexpensive fee. People are
offered a divorce through a foreign country (such as the
Dominican Republic), without having to visit that country or
attend the procedings. Unfortunately, these divorces may
be invalid. The victims find that they are not divorced,
and may not have even dealt with an actual legal service.
FAKE
DIPLOMAS AND DEGREES
University degrees and college diplomas
have been offered for a few hundred dollars on the
Internet. These offers claim that people will receive a
valid diploma, degree, or doctorate from legitimate educational
institutions. However, these diplomas and degrees aren't
authentic, and don't qualify as actual proof of education.
People who actually receive the fake diploma or degree aren't
registered with the educational institution. If used to
obtain employment, an employee may be fired for fraudulently
representing themselves, or risk criminal charges.
IDENTITY
THEFT
In this scheme, the goal isn't to
initially trick the victim, but to obtain information about the
person for future scams. Personal information (such as the
person's name, address, employment, credit card information,
etc.) is obtained about the victim through a variety of
methods. The victim may enter the information into a form
on a Web site, purchase something online and provide credit
payment and delivery information, or any number of other
methods. In some cases, information about victims was
stolen from the databases of legitimate businesses or
organizations, and then used by the thief for fraudulent
purposes. Using the victim's personal or credit
information, the criminal can then apply for credit cards,
loans, or purchase items under the victim's name. The
victim may not become aware of this scam until months later when
the cards are "maxed out" and payments have been
stopped.
"NIGERIAN"
LETTER SCAM \ ADVANCE LETTER SCHEME
This fraud involves issuing faxes or e-mails to random
businesses. These faxes or emails claim to be from an official representing a foreign
government or agency. This scheme
promises the transfer of millions of dollars into the
recipient's personal
account, and claims there is no risk.
The business
community is usually targeted by this fraud. The faxes or
e-mails do not target a single company, but rather are sent out
en masse. The business names are usually obtained by trade
publications or mailing lists.
Although the offer
appears transparent, the criminal will eventually reach someone
who, while skeptical, desperately wants the deal to be
genuine. It sets the stage for the rest of the scam.
After responding to it, the criminal begins convincing the
victim to invest money for expenses, so that the millions of
dollars can be obtained. The excuses for needing the money
include legal fees, customs fees, bribes, and/or other costs
that will "free up" the money. This continues
until the victim is broke.
SECRET
SHOPPER
This is a very common scam. Victims
apply for a job to pose as a secret shopper and receive a cheque
or money order to make a number of small purchases including a
substantial 'wire' or electronic transfer of funds.
Victims will be asked to complete a questionnaire for each
purchase. The cheque or money order received will
inevitably be returned a fraudulent of forged and the victim
will be held responsible for the loss.
ACCOUNTS
RECEIVABLE OR CHEQUE PROCESSING
This is another common scam. Victims
apply for a job to process cheques or receive funds on behalf of
an off-shore company. Victims will receive a cheque or
money order and be asked to deposit the cheque to their and
again 'wire' or electronically transfer funds to a third
party. Victims will allowed to retain 10 percent for their
work but once again the cheque or money order received will
inevitably be returned a fraudulent of forged and the victim
will be held responsible for the loss.
Agenda
