Online Dangers – Part 4 Fraud and Scams

Unless you just discovered the internet a couple of hours ago, you’re familiar with those emails promising a chunk of money for help transferring funds out of Nigeria or some other country like that. That’s the kind of thing that we’re talking about. Email is just one way that scams and fraud is practiced online.

Email scams:

The email scam we just mentioned is known as the “Nigerian 419 Letter”. The setup is that you provide your bank information supposedly in order to allow someone in Nigeria (or somewhere else, the country can vary) to transfer several million dollars in order to get the money out of the country. In exchange, you’ll get to keep a percentage, usually around 30%. The reality is that they either access all the money in your bank account and clean you out or they keep asking you to put up more money in order to expedite the process and/or pay for bribes, etc…

There are so many variations on these types of emails that it is impossible to try to cover all of them. Ultimately they are all the same. They want you to help them and promise you something in return that you’ll never get. You’ll end up paying money for non-existent merchandise or for a percentage of the transfer and have nothing to show for it except an empty bank account.

A variation on this email scam is the email that tells you you’ve won something (large screen TV, Blue Ray Player, Xbox, etc…) and that all they need from you is a debit card and pin number in order to pay for shipping costs. Again, the only thing you get is money taken out of your bank account.

Another variation is that you won the lottery in Canada, UK, or somewhere else.

There’s a simple rule in dealing with these email scams: If it sounds too good to be true, it is! Ask yourself why someone in Nigeria who has millions of dollars can’t find any other way to get his money out of the country but to contact a perfect stranger and get them to do it for them. Ask yourself how you won a contest or the lottery that you didn’t even enter! You didn’t! They are simply gambling and playing the odds, knowing that there are enough greedy people out there.

The Reshipping Scam:

I actually personally know someone who got involved in one of these. Fortunately, she got out in time.

This scam relies on emails or adds on sites like Craigs List claiming that you can make money from home (work-at-home). What they need is someone to receive goods and transfer funds. The problem is that, unbeknownst to you, the merchandise you’re receiving is merchandise that was purchased using stolen credit cards. You essentially become the front man. By the time the Feds track the stolen items to you, the address that you’re shipping to has no one there. Additionally, the funds that you are transferring are stolen funds and you are essentially laundry the money for them.

Ask yourself why a legitimate traders would use a work-at-home mom to handle his business transactions and shipping if he wasn’t trying to hide something.

From the FBI’s webpage on Internet Fraud, here’s a list on how to protect yourself:

Internet Fraud

Listed below are tips to protect yourself and your family from various forms of Internet fraud.

For information on the most common complaints and scams, see the annual reports of the Internet Crime Complaint Center, or IC3, a partnership of the FBI and the National White Collar Crime Center. Also see its information on Internet Crime Schemes and its Internet Crime Prevention Tips.

Use our online tips form or the IC3 website to report potential cases of cyber fraud.

Tips for Avoiding Internet Auction Fraud:

  • 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 website/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 possible, purchase items online using your credit card, because you can often dispute the charges if something goes wrong.
  • Be cautious when dealing with sellers outside the United States. If a problem occurs with the auction transaction, it could be much more difficult to rectify.
  • Ask the seller about when delivery can be expected and whether the merchandise is covered by a warranty or can be exchanged if there is a problem.
  • Make sure there are no unexpected costs, including whether shipping and handling is included in the auction price.
  • There should be no reason to give out your social security number or driver’s license number to the seller.

Tips for Avoiding 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.
  • Obtain a physical address rather than simply a post office box and a telephone number, and call the seller to see if the telephone number is correct and working.
  • Send an e-mail to the seller to make sure the e-mail address is active, and be wary of those that utilize 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 websites regarding this person/company.
  • Don’t judge a person or company by their website. Flashy websites can be set up quickly.
  • Be cautious when responding to special investment offers, especially through unsolicited e-mail.
  • Be cautious when dealing with individuals/companies from outside your own country.
  • Inquire about returns and warranties.
  • If possible, purchase items online using your credit card, because you can often dispute the charges if something goes wrong.
  • Make sure the transaction is secure when you electronically send your credit card numbers.
  • Consider using an escrow or alternate payment service.

Tips for Avoiding Credit Card Fraud:

  • Don’t give out your credit card number online unless the site is a secure and reputable. Sometimes a tiny icon of a padlock appears to symbolize a higher level of security to transmit data. This icon is not a guarantee of a secure site, but provides some assurance.
  • Don’t trust a site just because it claims to be secure.
  • Before using the site, check out the security/encryption software it uses.
  • Make sure you are purchasing merchandise from a reputable source.
  • Do your homework on the individual or company to ensure that they are legitimate.
  • Obtain a physical address rather than simply a post office box and a telephone number, and call the seller to see if the telephone number is correct and working.
  • Send an e-mail to the seller to make sure the e-mail address is active, and be wary of those that utilize 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 websites regarding this person/company.
  • Don’t judge a person or company by their website. Flashy websites can be set up quickly.
  • Be cautious when responding to special investment offers, especially through unsolicited e-mail.
  • Be cautious when dealing with individuals/companies from outside your own country.
  • If possible, purchase items online using your credit card, because you can often dispute the charges if something goes wrong.
  • Make sure the transaction is secure when you electronically send your credit card number.
  • Keep a list of all your credit cards and account information along with the card issuer’s contact information. If anything looks suspicious or you lose your credit card(s), contact the card issuer immediately.

Tips for Avoiding Investment Fraud:

  • Don’t judge a person or company by their website. Flashy websites can be set up quickly.
  • Don’t invest in anything you are not absolutely sure about. Do your homework on the investment and the company to ensure that they are legitimate.
  • Check out other websites regarding this person/company.
  • Be cautious when responding to special investment offers, especially through unsolicited e-mail.
  • Be cautious when dealing with individuals/companies from outside your own country.
  • Inquire about all the terms and conditions.

Tips for Avoiding Business Fraud:

  • Purchase merchandise from reputable dealers or establishments.
  • Obtain a physical address rather than simply a post office box and a telephone number, and call the seller to see if the telephone number is correct and working.
  • Send an e-mail to the seller to make sure the e-mail address is active, and be wary of those that utilize 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.
  • Purchase merchandise directly from the individual/company that holds the trademark, copyright, or patent.

Tips for Avoiding the Nigerian Letter or “419” Fraud:

  • 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.

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