Wednesday, December 05, 2007

Who would fall for this? I would...

It is not bad to know everything about the last scams...You (and I) could be the next victim, as the crooks get more and more sophisticated.

Credit Card Call tag scam After the 2005 holiday season The Merchant Risk Council reported that the “call-tag” scam re-emerged over the 2005 holidays and several large merchants suffered losses. Under the scheme, criminals use stolen credit card information to purchase goods online for shipment to the legitimate cardholder.

When the item is shipped and the criminal receives tracking information via email, he/she calls the cardholder and falsely identifies himself as the merchant that shipped the goods, saying that the product was mistakenly shipped and asking permission to pick it up upon receipt. The criminal then arranges the pickup issuing a “call tag” with a shipping company different from the one the original merchant used.

The cardholder normally doe notice that there is a second shipping company picking up the product, which in turn has no knowledge it is participating in a fraud scheme. The cardholder then notices a charge in his card and generates a chargeback to the unsuspecting merchant.

Nigerian Pension Fund The number one Internet scam in recent years has to be the Nigerian Pension Fund.

Senator Ibrahim Mantu, the executive Chairman of the pension funds committee in the senate of the federal Republic Of Nigeria made contact via the trusted and reliable method of spamming your in-box having found your e-mail address on the Internet while searching for a reliable and reputable person to handle this transaction.

He needed to transfer the sum of US$9 million from unclaimed pension funds overseas through the assistance of a foreign partner.

The Senator will transfer the money to your account before it is invested, leaving you with a 20% handling fee and 5% for your troubles. All he needed was your address and bank details and the assurance that you would keep all transactions strictly confidential.

Despite alarm bells going off in the heads of most of the recipients and said email hightailing it right into the waste bin, lots of good people fell for this scam, many of whom lost their life savings or their homes.

This scam was so successful that it was used time and again, no sooner were the names and details publicised then the scammers changed their names and email addresses.

Alaska Plane Crash Beneficiaries Richard Benson, claiming to live in Manchester, UK and to work for Natwest Bank in London wrote (again via email) in his capacity as Assistant Audit Manager (Greater London Regional Office). He had discovered an abandoned sum of US$10.5 million dollars in an account that belonged to an overseas customer, the late Mr. Kevin Thompson. The customer had, unfortunately, lost his life in the plane crash of Alaska Airlines Flight 261 which crashed on January 31st, 2000, along with his wife and only daughter.

Benson claimed that as no relatives had claimed the funds then he would divide the funds between him and the recipient on a 60-40 basis, with himself receiving 60%. All that was required to take this to the next step was your full name, address and telephone number.

The next step was to hand over your bank details and details of any investments you might hold (to secure tax exemption, of course) and you can guess the rest. Again, many good people fell for this scam before it hit the headlines under the fraud alert radar.

Online selling scam One of the most basic, and thus most prolific scams is when a fraudster feigns interest in an item posted for sale on the Internet. The "buyer" explains that a client of his is interested in the item, but due to an earlier sale that fell through has a certified cheque for thousands more than the asking price and requests the seller to send the balance via wire transfer.

If the seller agrees to the transaction, the buyer sends the certified cheque via express courier (typically from Nigeria). The seller takes the cheque to their bank, which clears the funds immediately. The seller keeps his side of the bargain and wires the balance to the buyer.

Days later, the cheque bounces and the seller realises they have been scammed. But the money has long since been picked up and is not recoverable.

Re-shipping scams Re-shipping scams trick individuals or small businesses into shipping goods to countries with weaklegal systems. The goods are generally paid for with stolen or fake credit cards.

In the Nigerian version, the fraudsters have armies of people recruiting single women from western countries through chat and dating sites. At some point, the criminal promises to marry the lady and come to their home country. The criminal asks permission of his "future wife" to ship some goods he is going to buy before he comes. As soon as the woman accepts the fraudster uses several credit cards to buy at different Internet sites simultaneously. In many cases the correct billing address of the cardholder is used, but the shipping address is the home of the unsuspecting "future wife".

Around the time when the packages arrive, the criminal invents an excuse for not coming and tells his "bride" that he urgently needs to pick up most or all the packages. Since the woman has not spent any money, she sees nothing wrong and agrees. Soon after, she receives a package with pre-printed labels that she has agreed to apply to the boxes that she has at home. The boxes are picked up by the package delivery company and shipped to the criminal's real address (in Nigeria or elsewhere).

After that day the unsuspecting victim stops receiving communications from the "future husband" because her usefulness is over. And in most cases the criminals were able to create accounts with the package deliverer, based on the woman's name and address. So, a week or two later, the woman receives a huge freight bill from the shipping company which she is supposed to pay because the goods were shipped from her home. Unwittingly, the woman became the re-shipper and helped him with his criminal actions.

The Eastern European variation of this scam recruits people via classified advertising. The criminals present themselves as a growing European company trying to establish a presence in the US and will need to buy certain goods in the U.S. which need to be re-shipped to a final destination in Europe.

Online banking scam PayPal and LloydsTSB are two of the most high-profile phishing scams. Unsuspecting online bankers received information from their bank that there was a problem with their account and were asked to contact them and leave their details. The information was used to wipe accounts, accrue credit and debt or in the more sinister use of identity fraud. Even though customers are more wary these days as each time these phishing attacks resume they make the headlines, the banks continue to lose millions to this type of online fraud every year.

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