USPIS Presents: Work@Home Scams: They Just Don't Pay!

The United States Postal Inspectors have produced a pretty telling video showing how Internet criminals lure people into taking jobs that will cause them financial and legal trouble.

The film entitled, Work@Home Scams: They Just Don't Pay shows what happens to people, who accept work-at-home jobs that aren't what they appear to be.

It also speaks to how this problem has grown from ads in the classified section of newspapers and magazines to being plastered all over the Internet.

A lot of us probably see spam e-mails offering these too good to be true jobs that don't make sense on a daily basis. You might also run into one of these scams on a job-site, such as Monster.com.

Another fact is that applying for one of these jobs can lead to giving up your personal information, which will later be used to steal your identity.

Please remember these scams still show up in the classified ads of newspapers and magazines, also.

Here is (what I consider) an interesting story about someone falling for one of these scams that should have known better (my opinion):

BBB Worker Takes Job Processing Fraudulent eBay Transactions

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FTC Site Teaches Public How to Avoid Bad Deals

March 1st through the 7th is Consumer Awareness Week. This year, the Federal Trade Commission (along with an army of partners) are providing a user-friendly set of free e-tools designed to help the average "Joe or Jolene" safely navigate the murky waters they face in the current economic environment.

Besides teaching us how to make the most of our financial resources, the tools also teach how to avoid the underground army of not very honest people who are spreading more economic doom and gloom with too-good-to-be-true schemes designed to take advantage of the grim economic situation.

The Web site for the 11th annual National Consumer Protection Week is now up and running. Launched by the Federal Trade Commission and its NCPW (National Consumer Protection Week) Steering Committee partners, the site gives people free tools to make smart business decisions in today’s economy. The information on the site is designed to help the average person get the most value for their money, whether they are trying to improve their credit history, tell the difference between a real deal and a rip-off, or protect their mortgage from foreclosure or foreclosure rescue scams. It explains their rights under various laws and tells how to file a complaint or seek assistance from the appropriate government agency.

According to the Federal Trade Commission, scam artists, fraudsters, hackers and flim flam artists follow the headlines and use the current economic downturn to part people from their hard-earned (and ever-dwindling) financial resources. The NCPW Web site has tools (educational resources) to teach people how to recognize a ripoff, sniff out a scam and ensure they are getting value for their dollar in today's marketplace.

The site has tips on a wide range of topics from partner organizations. These tips include from how to get a free credit report to how to spot a telemarketing scam and how to deal with debt to how to deter and detect identity theft and from how to avoid home and auto repair scams. Also included is detailed information on how to file a complaint with the appropriate agency if you do run into an issue.

Of course, on a personal level, I always recommend reporting them if you spot a problem and are able to avoid becoming a statistic, also. This can prevent a less educated person from becoming a victim and is a good deed.




The FTC partners involved in providing this information include the AARP, the Comptroller of the Currency, the Consumer Federation of America, the Council of Better Business Bureaus, the Federal Citizen’s Information Center, the Federal Communications Commission, the Federal Deposit Insurance Corporation, the Federal Trade Commission, the National Association of Attorneys General, the National Association of Consumer Agency Administrators, the National Consumers League, the U.S. Department of the Treasury, the U.S. Postal Inspection Service, and the U.S. Postal Service.

The FTC also just released the top complaints they received in 2008. For the ninth year in a row, identity theft came in at number one. 1,223,370 complaints were received in 2008. 313,982 (26%) were related to identity theft.

Not surprisingly, with all the data breaches seen recently, credit card fraud was the most common form reported. This was followed by government documents/benefits fraud at 15%, employment fraud at 15%, phone or utilities fraud at 13%, bank fraud at 11% and loan fraud at 4%.

Other complaint categories included Third Party and Creditor Debt Collection, Shop-at-Home and Catalog Sales, Internet Services, Foreign Money Offers and Counterfeit Check Scams, Credit Bureaus, Information Furnishers and Report Users, Prizes, Sweepstakes and Lotteries, Television and Electronic Media, Banks and Lenders, Telecom Equipment and Mobile Services, Computer Equipment and Software, Business Opportunities, Employment Agencies and Work-at-Home, Internet Auction, Advance-Fee Loans and Credit Protection/Repair, Health Care, Auto Related Complaints, Travel, Vacations and Timeshare Plans, Credit Cards, Magazines and Buyers Clubs and Telephone Services.

Please note these are statistics where people were victimized. The information on the NCPW site is designed to keep people from becoming one (a statistic).

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Fraudsters mutate counterfeit MoneyGram money order scam to fool victims/financial institutions

Counterfeit MoneyGram Money Orders seem to be surfacing all over the place, again! Here is what I wrote about them the last time I posted on them:

Recently, MoneyGram removed the Travelers Express name from their money order product. The new version is branded simply as MoneyGram, printed in Spanish (Espanol) in addition to English.

The old version with the Travelers Express name have been counterfeited and circulated via Internet scams for a couple of years. A lot of them had Walmart's logo printed on them. We've seen similar counterfeit American Express Gift Cheques and Postal Money Orders in recent years, also. Some of these items are still in circulation, including the older Travelers Express version.

For a long time, the counterfeiters seemed to prefer using a Walmart logo. Some of them even came with a letter from Walmart Financial Services.

The newer version, I saw on Friday bear a CVS Pharmacy logo and they are being distributed in lower dollar amounts. Presumably, the high dollar amounts $700.00 and over were being looked at too closely by financial institutions.

Not sure, but they could be starting to use a variety of logos to make them look legitimate. If anyone reading this has seen different, please add a comment to let everyone know.

The newer items seem to be in denominations of $500.00 or less.

These items normally are obtained when a person gets involved in a too good to be true financial scheme, or is solicited by a beautiful woman (or man) needing to be rescued from a foreign locale. This normally occurs on the Internet.

Here are some examples of the lures used to pass these items, along with links to old posts:

Some of these lures include, but aren't limited to (new lures surface frequently), secret shopper, romance, lottery, work-at-home and auction scams.

Sadly enough, the lowering of the dollar amount seems to have had limited success because I am getting reports that some of these items have been cashed at financial institutions.

The saddest part of all of this is (from an earlier post):

A common denominator in most of the scams is that there will be a request to send the proceeds, minus your paltry cut (normally via wire transfer) back to the person sending you the instruments. That is (unless) they are buying goods from you. In this case, your property is what they want you to send to them.

In other words, if the item is cashed at a financial instiution, when it comes back as a counterfeit -- they will hold you and YOU ALONE liable.

Even sadder, people are also getting arrested for passing them. When counterfeit instruments started getting passed in Internet scams, the financial institutions were a lot more forgiving. This isn't necessarily the case anymore with the amount of losses being taken out there.

More and more often, criminals pretend to be victims and pass the items. I call these people, "reverse scammers" because they have no intention of wiring any money back to the original scammer.

If you are a true victim, I recommend taking to the good folks at FraudAid, who advocate for the people that are really victims. The key is being able to show all the correspondence, along with proof that money was actually wired. If you kept the money from the transaction, it is going to be hard claiming "victim status."

The best way to avoid getting scammed is to call and verify the item at MoneyGram, itself. This can be done by calling 1-800-542-3590. In almost (although not always in theory) all cases, this call will reveal the item as a counterfeit.

MoneyGram money orders aren't the only instruments being counterfeited. Counterfeit cashier's checks, money orders, gift and travelers cheques are also being counterfeited and used in these types of scams.

If you want to learn more about these scams, I recommend going to fakechecks.org, who has some great videos illustrating the scams used to pass these items.

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Counterfeit Visa Travelers Cheques in circulation!

Counterfeit financial instruments are circulated in a variety of Internet scams. The ploy is always to get someone to cash them and then wire the money back to the person behind the scam.

In the past couple of weeks, readers and other sources have brought to my attention that counterfeit Visa Travelers Cheques are in circulation.

Visa has provided resources to identify these instruments.

You can call them at 1-800-227-6811 to verify an item. This can also be done on-line, here.Visa also has a good interactive tool to identify the security features of the Visa Travelers Cheque, here.

The trick is to ALWAYS verify them before you negotiate them using your good name!

Some of the scams being used to trick people into cashing these items are known as work-at-home (job) scams, secret shopper, romance, lottery and auction scams.

A collective name for all of these scams that ask you to cash an item and send the money back to the scammer is called the advance fee (419) scam.

A lot of the sites dedicated to fighting scams are also seeing an alarming trend, which is that people are getting arrested for attempting to cash these items.

I recently had a conversation with the fine folks over at FraudAid about this trend.

A great (new) resource about all the counterfeit paper being circulated is FakeChecks.org.

People, who fall for these scams do so because they are lured with something that is too good to be true. The old saying is that if it is "too good to be true, it is NOT!"

Here are some other counterfeit instruments, I written about that are still in circulation:

Counterfeit MoneyGram Money Orders being passed via Internet Scams

Counterfeit Cashier's Checks Fuel Internet Crime

American Express Gift Cheques Being Circulated in Internet Scams

Counterfeit Postal Money Orders Showing Up in IScams Again

Here is a picture of counterfeit Visa Travelers Cheques that were sent to someone about a week ago. They were sent from the United Kingdom, however the scammer wanted the money wired to Nigeria.


(Photograph courtesy of Raleigh)

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California Lottery Nails Dishonest Retailers

When you cash in a small lottery prize at a lottery retailer, the amount might not exactly what you were were entitled to receive.

On 7/1/08, the California Lottery announced that they are using undercover agents to sting dishonest retailers, who cheat lottery winners out of their prizes. The press release on this matter pointed to a case in Morgan Hill, California where a dishonest retailer (and another individual) are being charged with grand theft of lottery tickets ranging in value from $500 to $25,000.

I decided to see if I could find any additional information on arrests and discovered another one that was reported by cbs13.com in Lodi, California. CBS 13 in Sacramento, with cameras rolling, approached Baljut Kang (one of the two arrested in Lodi), who refused to talk at first. Eventually, Kang stated to the reporter that the undercover agents found "some ticket in the garbage," which made them think she and her son were committing fraud (?).

According to the article, an undercover agent turned in one ticket worth $990 receiving only $24. Another ticket was presented at the retailer worth $25,000 and the agent was paid $10 for it. The article also states that this was the result of a statewide lottery sting. Other retailers were caught in Southern California.

The official press release indicates that this is the first enforcement effort of this kind anywhere in the country. This made me wonder if other States should run sting operations, also?

While dishonest retailers getting caught cheating customers is something new, lottery scams are big business for criminals. Spam e-mails, unsolicited telephone calls and even snail mails are used to dupe people into thinking they have won the lottery. Frequently, a person is then asked to negotiate a fraudulent instrument to cover tariffs and taxes and wire the money across an International border.

The California lottery has an interesting page, which can be seen on their website warning the public about this type of activity. In February, I did a post on the eve of a $270 Mega Million Lottery prize, about fraudsters attempting to impersonate the California lottery to trick unsuspecting people into cashing worthless checks.

Please note that scams -- where unsuspecting people are duped into cashing worthless checks and wiring the money before the financial institution catches on -- aren't limited to the lottery variety. Other varieties involving bogus financial instruments include work-at-home (job) scams, secret shopper, romance and auction scams. Known bogus items in circulation are Postal Money Orders, Travelers Express (MoneyGram) Money Orders, American Express Gift Cheques and Visa Travelers Cheques. A good site to learn more about scams involving fake checks is FakeChecks.org.

In California when you claim a ticket for a prize under $600, the retailer has to validate it in a machine, which prints a receipt showing exactly how much the prize was for. A good idea is to make sure you take a look at this receipt to ensure you are getting the right amount of money.

If you note suspicious activity, I'm sure that the dedicated law enforcement personnel at the California Lottery would like to hear from you. They can be reached at 1-800-LOTTERY.

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How to spot a foreclosure scam

With 1-2 million foreclosures on the horizon, we are probably going to see a lot of shady characters advertise on lamp posts, classified ads, pay-per-click advertising and spam e-mails with questionable promises to rescue people in a difficult situation.

Apparently, the mortgage crisis is now so bad some are saying it's likely to cause a recession.

Foreclosure scams have been around for a long time, predating the current mortgage crisis.

Scams rarely change very much, they tend to disappear and then resurface when there is an event that makes them viable again.

For instance, the infamous Nigerian 419 scam which is frequently in the news can be traced to what was known as the Spanish Prisoner letter, which dates back to the early 1900s.

Advance fee is one of the more popular variations of a foreclosure scam, people are asked to pay a large fee up front and then get nothing for their money.

I had a reader send me an e-mail, where this was occurring and the intended victim was being asked to wire the money. Being asked to wire the money is common in all the advance fee type scams, because once it's wired the sender has very little recourse, if any at all!

I found an interesting article on the DOJ (Department of Justice) website published in 1998 by the American Bankruptcy Institute.

The report details the following types of foreclosure scams:

For the cost of a bankruptcy filing fee, a debtor can immediately obtain one of the most powerful injunctions available under American law: the automatic stay," the foreclosure scam task force pointed out. The task force report described bankruptcy foreclosure fraud as the practice of filing for bankruptcy to delay or defraud creditors, without intending to comply with the requirements for obtaining a bankruptcy discharge or completing a repayment plan.

The foreclosure scam most commonly associated with the West Coast is the fractional interest transfer. Typically, a partial interest--perhaps 5 percent or 10 percent--in property held by a homeowner facing foreclosure is transferred to a real or fictional entity already in bankruptcy. Because the property interest is then held by a bankruptcy debtor, the original owner's creditor cannot foreclose until the bankruptcy court lifts the automatic stay.

Some scams involve fractional interests transferred with the knowledge of the original property owner. Often, however, the original owner first transfers the property to the perpetrator of a foreclosure scam, who then transfers the fractional interest without the original owner's knowledge. Sometimes a property is moved from case to case as the stay is lifted; one residential property was linked to 24 different bankruptcy cases.

The task force report explained how one homeowner facing foreclosure was persuaded by a scam perpetrator to sign deeds of trust and grant deeds transferring fractional interests in her property. The homeowner paid the foreclosure consultant several hundred dollars per month so she could stay in her home. The fractional interest recipients included apparently fictitious individuals as well as homeless persons recruited for a fee to participate; eight recipients filed for bankruptcy one after the other. Each filing stayed foreclosure on the property, causing a 10-month delay between the first filing and the completed foreclosure.

Many more variations of bankruptcy foreclosure fraud are surfacing around the country. Probably the most widespread involves the use of foreclosure notices to identify individuals facing the loss of their homes. The scam perpetrator contacts the home owner, advertising "mortgage assistance" or "foreclosure counseling" and promising to work out the home owner's problems with the mortgagee or to obtain refinancing for an up-front fee typically ranging from $250 to $850. The perpetrator may direct the home owner to "fill out some forms," including a blank bankruptcy petition, or may collect the information needed to complete a petition later. The perpetrator subsequently files a bankruptcy petition in the home owner's name, after filling in the bankruptcy papers signed by the home owner or forging the home owner's signature. The bankruptcy petition invokes the automatic stay, the imminent foreclosure is postponed, and the home owner stops receiving collection calls and letters.

In most cases, the perpetrator does not tell the home owner about the bankruptcy petition, instead convincing the home owner that foreclosure activity has ceased because mortgage problems have been worked out. The perpetrator may tell the home owner that he or she might receive a notice from the court, which should be ignored. The home owner may even be told that the perpetrator has gone to court on the home owner's behalf. No one appears at the Section 341 meeting, the case is dismissed, the foreclosure goes forward, and the home is lost.

Permutations of this scam include the perpetrator's collecting monthly mortgage payments from the homeowner, falsely stating that they will be forwarded to the mortgagee. In these cases, each defrauded homeowner pays not only the up-front fee for "services," but also hundreds or thousands of dollars in mortgage payments.

In another increasingly common alternative, the scam perpetrator convinces the home owner to quit-claim the residence to the perpetrator or to sell the residence for a nominal fee such as $1. The home owner agrees to transfer title because he or she has little or no equity in the property. The perpetrator charges the home owner "rent" or a "consultant's fee" or "management fee" to stay in the residence while the mortgage problems are worked out, after which the home owner will be able to "apply for repurchase" of the property or share the profits if the perpetrator sells the property.

But it costs money for the perpetrators to file all of these bankruptcy cases. To avoid bankruptcy filing fees, some perpetrators transfer an interest of the home owner's quit-claimed property into the name of an existing bankruptcy debtor--perhaps a Chapter 11 business debtor across the country--in a variation of the fractional interest scam. Typically, the debtor learns that a property interest has been transferred into its bankruptcy estate when it is contacted by counsel for the property owner's secured creditor, who has learned it cannot foreclose because the property is owned by a bankruptcy debtor.

Full report from the American Bankruptcy Institute, here.

Reuters video (courtesy of YouTube) did an interesting piece that is more recent. In it they offer some pretty good advice to be EXTREMELY CAREFUL before signing any documents related to your home in any of these come-ons.

The end result could be losing your home to the person, who is claiming to help you!

You can view the video below:

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Are Internet Check Scam Artists staging a December Surge?

(Picture of counterfeit financial instruments recently intercepted in the mail by an International law enforcement task force)

In the past several days, I've noticed a surge in counterfeit check alerts from the FDIC (Federal Deposit Insurance Corporation). From December 19th to the 21st, the FDIC issued 26 alerts from various financial institutions throughout the United States reporting counterfeit activity using their information.

These checks are used in all the different varieties of overpayment scams. The basic MO (method of operation) in these scams is to trick someone into negotiating a bogus financial instrument and sending the money back to the person behind the scam. The victim is offered a small part of the money for doing this.

Of course, they are held liable for all of it when the item is discovered to be fraudulent.

Some of the known varieties of the overpayment scams are the lottery, auction, secret shopper, romance and work-at-home (job) scam(s). Please note you can search any of these "scam" terms at the top of this page for more information.

Spam e-mail is normally the vehicle in which these scams are presented, however they show up in more traditional print venues (including junk mail) from time to time, also.

One thing to bear in mind is that counterfeit checks (cheques) often appear to be legitimate in verification systems. The reason for this is simple, they use legitimate account numbers.

Victims have even asked employees at their financial institution of choice if the instrument was legitimate. Sadly, the items are often so good that the person is told that they are real. A financial institution employee verifying an item offers you no guarantee that the item is good. The person passing the instrument is the one who is liable for it.

Another tricky thing is that many financial institutions will also give their customers credit for these items in their accounts. This often gives the victim a false sense of security and causes them to send the money back to the scammer before realizing what is going on.

Federal rules dictate that banks can only put holds for a specified period of time depending on what type of check it is. The people behind the scams know about this and take advantage of it.

Although the money can be sent in a lot of different ways, most scammers prefer the use of Western Union, or MoneyGram wire transfer services. The reason for this is once the money is picked up (often within minutes), there is no recourse for the person who sent it.

Besides counterfeit checks, we've seen other instruments counterfeited on an industrial scale and sent to unsuspecting people, also. The known items in circulation are have included Postal Money Orders, Travelers Express (MoneyGram) Money Orders, American Express Gift Cheques and Visa Travelers Cheques.

The end result of these scams is that the person negotiating the item will be held financially liable. People are also getting arrested in certain circumstances for passing these items, also.

The National Consumers League recently set up a site (fakechecks.org), which is a great reference on Internet scams involving checks (complete with visual presentations), here.

Here is a post, I wrote with more information on how to verify one of these items:

Tools to verify those too good to be true financial instruments you got in the mail

Please note that if the deal you are being presented is too good to be true, or you are being asked to wire money it probably isn't worth going to the effort of trying to verify the item.

Also note that these scams have become so sophisticated that there is no guarantee that any amount of verification can guarantee the item is legitimate!

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Word of mouth is fraud's worst enemy!

FraudAid, a website dedicated to helping fraud victims has a saying, "Silence is fraud's best friend. Word of mouth is fraud's worst enemy. Pass the word!"

In a world, where fraud victims have a hard time getting anyone to even talk to them this saying makes a lot of sense.

FraudAid was conceived by a woman by the name of Annie McGuire, who fell victim to a fraud scheme, herself. Her personal story, which is told in great detail on the site proves that just about ANYONE can become a fraud victim.

In my personal dealings with victims, you would be surprised who has been scammed.

The problem is that most people -- especially those who think they should have known better -- rarely report that they have become a victim of fraud. FraudAid strives to educate all of us that the lack of communication enables fraudsters to victimize people (who if they have been made AWARE) might not be have been taken in by a fraud scheme.

Thus, the reason there seems to be so much fraud and the experts compiling all the statistics disagree on how much fraud exists. After all, "Silence is fraud's best friend."

The FTC just released their estimate of identity theft victims, which has raised a lot of speculation about how accurate their number is.

I have no doubt that the FTC did the best they could, but if fraud isn't reported, it's hard to quantify.

The FraudAid site is a wealth of information for someone, who is trying to seek help after becoming a victim. Of the greatest importance (in my opinion) is how to deal with the authorities.

One page on the site shows the average person how to write a narrative that will get the Police interested in going after your case.

It also goes into great detail on what law enforcement agency specializes in what type of fraud. This can be confusing for someone dealing with being victimized for the first time.

The site also addresses a growing phenomenon, which is how to avoid getting arrested after becoming a victim. With all the auction fraud and stolen financial information being sold wholesale, fraudsters have developed a need to launder the proceeds of their illicit transactions.

The way they do this is by tricking people to do it for them. This is accomplished by hiring them under "false pretenses" to negotiate all their illicit transactions and wire the money to them. This scam is often referred to as a work-at-home, job, or check-cashing scam.

Another variation, known as a reshipping-scam, tricks people into reshipping stolen merchandise.

In reality the victim is taking all the risk for the scammer -- and more and more often -- the rap for them when they get caught. Sadly enough, the end result is almost certain financial ruin and possibly being charged with a host of crimes including, check fraud, money laundering and receiving stolen goods.

Some of detailed information on the different scams that can be found on FraudAid include investment, Nigerian (419), sweetheart/romance, lottery sweepstakes, lottery, work-at-home, visa/green card, counterfeit check/money order and reshipping/package processing scams.

Also covered on the site is how to protect yourself and recover from identity theft. Many fraud victims later become a victim of identity theft when a fraudster sells all the information they've data-mined off them.

The site even contains information on child safety and human trafficking.

Backing all this up are a host of research tools for fraud, where to report it and how to take political action.

Annie is now backed up by a group of volunteers, one of whom, Karrie Brothers, assisted me with a lot of information on the current going-ons at FraudAid.

To grow this effort, Karrie and Annie are actively seeking volunteers to assist them. Being one of the few resources where a victim can turn to, they are getting a lot of business!

FraudAid gives a good explanation of why volunteers are needed and they are trying to grow their organization:

Fraud, by every measure, is one of biggest and fastest growing industries in the world.

One study values worldwide corporate fraud at over two trillion dollars. This is not counting consumer and Internet frauds for which there is no reliable assessment. Another study estimates that 6% of global product is laundered money.

The fraud industry is run by many, many skilled professionals. The anti-fraud industry is small and, by comparison, run by very few skilled professionals.

That's why if you have the skills you can make a real difference!

Fraud Aid, Inc. is a volunteer anti-fraud organization. We, as all other anti-fraud organizations, are out-numbered and need your help.

We have the frauds. Do you have the time?

To grow the organization, they are recruiting a wide range of volunteers with law enforcement, legal, IT and education experience. There are also opportunities for people with no experience, also.

Even if you think you are aware of all the fraud schemes out there, FraudAid is a great place to learn more about them. After all, if people weren't being taken in by the schemes, fraud would probably disappear pretty quickly!

If you want to learn more about FraudAid, the site can be seen, here.

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Internet crime victims report counterfeit American Express gift cheques being sent to them!

Scam (too good to be true) lure courtesy of miriyaparino at Flickr.

Counterfeit checks like all the ones recently discovered by an International law enforcement team being sent from Nigeria aren't the only bogus financial instruments being sent all over the world.

In this recent effort against this activity, over 15,000 counterfeit instruments were discovered in a months time.

For the past couple of weeks, I've received a lot of e-mail and blog comments from people receiving counterfeit American Express gift cheques in the mail with instructions to cash them and wire the proceeds (minus a paltry commission) back to the sender (scammer).

The reason for all the e-mails and comments are because of previous posts, I've written about these counterfeit financial instruments.

Other than having their financial world ruined, there are reports of people getting arrested after trying to pass some of these instruments. One victim recently wrote me after discovering she had been scammed -- and told me that when she tried to report her problems to the authorities, they advised her to seek legal advice before proceeding -- or she might be charged with money laundering.

The American Express gift cheques can be verified by calling 1-800-525-7641.

Counterfeit MoneyGram and U.S. Postal money orders are still also being sent to people as payment for goods, or in too good to be true lures that are nothing more than a scam.

A lot of these bogus financial instuments come from work-at-home scams, secret shopper, romance, lottery and auction scams. New varieties of these scams appear from time to time, but the common denominator in any advance fee (419) scam is that it is too good to be true and it makes little, to no sense.

Another common denominator in most of these scams is that they will try to get you to wire money. Here is what I wrote about this in a previous post:

The fraudsters want you to cash these counterfeit gift cheques and send (normally wire) the money back to them. When they are discovered to be fraudulent -- you end up taking the "rap" for the scammer and they disappear in an "electronic mist."

If you've received any of these items in the mail, I've compiled a lot of information on how to identify them and report them to the right people, here.

Another development being seen is that real scammers are getting their hands on these instruments, who have no intention of wiring any money, anywhere. In effect, they are scamming the scammers. This makes it a lot harder to figure out, whether or not, a person is a victim or a scammer. Maybe this is one of the reasons more people are getting arrested?

Of course, if the victim never wired the money, they are probably lining their own pockets (my opinion).

The bottom line is that falling, or getting involved in one of these scams can cause you a lot of financial pain and suffering and you might even get into worse trouble.

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Fraudulent Gift Cheque Update from American Express

Since September, I've been writing about counterfeit American Express Gift Cheques showing up in a variety of Internet fraud schemes.

Readers have reported receiving these items primarily as a result of work-at-home scams, but they can show up in a variety of Internet fraud come-ons. They might also show up in secret shopper, romance, lottery and auction scams.

The fraudsters want you to cash these counterfeit gift cheques and send (normally wire) the money back to them. When they are discovered to be fraudulent - you end up taking the "rap" and they disappear in an "electronic mist."

Several readers reported being asked to wire the money to Nigeria and the United Kingdom. I recently wrote a post based on large amounts of counterfeit financial instruments being found at airports in the United Kingdom (allegedly from Nigeria), here.

Most of the counterfeit gift cheques, seen thus far, have been in the $500.00, or $1000.00 denominations. Note American Express doesn't issue gift cheques for more than $100.00.

American Express states in their bulletin that gift cheques are safe when verified prior to negotiating them. Anyone can call them and verify an item at 1-800-525-7641.

Unfortunately, a lot of people don't verify these items. Many people have also deposited them, initially received credit, and then had their accounts garnished when the items returned.

I've also had a couple of people write me and say they were arrested for trying to cash them. Presenting counterfeit financial instruments is considered a crime in most places. It will be up to the person arrested to prove they were a victim of a scam and not involved, intentionally.

American Express gift cheque bulletin, here.

Listed below are the posts, I've written since September, along with some scary comments from readers:

Counterfeit American Express Gift Cheques

Counterfeit American Express Gift Cheques (Update)

American Express Gift Cheques Being Circulated in Internet Scams

American Express gift cheques aren't the only items that have been counterfeited and passed via Internet scams. In the past we've seen a lot of Postal Money Orders and Travelers Express (MoneyGram) money orders being counterfeited, also.

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Will counterfeit Visa Traveler Cheques be the latest bogus financial instrument spread in Internet Scams?

(Photo courtesy of Flickr)

Counterfeit Visa Travelers Cheques -- so far seen in $500.00 denominations -- are starting to appear in different parts of the United States.

In the past few years, counterfeit U.S. Postal Money Orders, MoneyGram Money Orders, and American Express Gift Cheques have all been circulated by Internet fraud activity.

If history repeats itself, we will see counterfeit Visa Travelers Cheques show up outside the United States, also.

These instruments have been passed in a lot of work-at-home (job) scams. They are also passed in secret shopper, romance, lottery and auction scams.

These advance fee (419) type scams all have a common theme. A lure (scam) -- which plays on greed is offered to entice someone into cashing these items -- and wiring the money back to the fraudster behind the scheme.

The lure (scam) is always too good to be true and makes no sense.

Since it is against the law to pass a counterfeit financial instrument, people are sometimes arrested when they present these items. Even if they aren't arrested, they are held liable, when the fraud is discovered.

Unfortunately, banks often give credit to their customers on these items. Tellers have even told their customers the items are legitimate, which doesn't make any difference (for the customer) when they return. Of course, the bank isn't liable for any of this.

These items are also being presented to merchants. Retail criminals use them to purchase items, get the balance in cash, then refund the merchandise. Of course, if they are unable to refund the items, they will probably try to get gift cards or fence the merchandise. There is a lot of stolen merchandise being fenced (pretty easily) on Internet auction sites.

Intelligence indicates these many of these items are being printed overseas, then distributed in bulk, worldwide. Once received in bulk, they are broken down and distributed to the criminals, who then use them in the manners listed above.

Visa recommends that you do the following to verify if one of the Travelers Cheques are real:

Can you see a watermark in the cheque?

Can you see the holographic thread embedded in the cheque?

Is the customer present?

Have the cheques been countersigned in your presence?

Does the original signature match the countersignature?

Has valid identification been presented and the details recorded along with the customer name on the back of the cheques?

If you are suspicious, you can call them at 1-800-227-6811 to verify an item. This can also be done on-line, here.Visa also has a good interactive tool to identify the security features of the Visa Travelers Cheque, here.

Here are some of my previous posts on counterfeit instruments circulating via the Internet:

Counterfeit MoneyGram Money Orders being passed via Internet Scams

Counterfeit Cashier's Checks Fuel Internet Crime

American Express Gift Cheques Being Circulated in Internet Scams

Counterfeit Postal Money Orders Showing Up in IScams Again

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Tools to verify those too good to be true financial instruments you got in the mail

(Counterfeit check picture courtesy of cknlomein at Flickr)

There are a record amount of counterfeit cashier's checks, official checks, money orders, travelers and gift cheques in circulation. This is an attempt to pass on information that the average person can use to tell IF the item is real or a counterfeit (fake).

As a disclaimer -- this is only a guide and if you deposit or cash items from people you don't know -- you do so at your own risk. The quality of these items is getting better all the time.

I’ve put together a list of the known counterfeit items in circulation, along with the current telephone numbers to verify them. You will probably receive these items after being lured with a (too good to be true) get rich quick scheme that doesn't make very much sense.

The best method to verify an item is to go to the maker, or issuer of the check (cheque). They probably will know if they issued it. The key here is to make sure you are speaking with the real issuer (maker) of the item.

Never trust a number provided on the instrument, fake telephone numbers are sometimes set up that will even verify in 411 (information).

Simply stated, as long as the communication companies think they are being paid, setting up a fake number is no problem. We are seeing fake numbers set up by scammers pretty frequently.

Since these numbers are often set up in 411 (information) rather easily, I recommend using Phonevalidator.com. This site provides a service that shows if a number belongs to a cell, or a land line. It also provides telephone directory and Google results for the number queried.

Quite often, fake numbers set-up to verify checks are cell phones.

The Internet is a good way to find the true issuer (maker) of an item. The key is to make sure you are visiting a legitimate site.

Fake websites (especially those pretending to be financial institutions) are a growing problem, also. An easy way to check if a site is legitimate is by using TrustWatch, which verifies whether a site is known (trusted) or not.

If you are interested in taking a look at some fake sites, claiming to be financial institutions the Artists Against 419 has some great examples of them on their site.

A common denominator in most of the scams is that there will be a request to send the proceeds, minus your paltry cut (normally via wire transfer) back to the person sending you the instruments. That is (unless) they are buying goods from you. In this case, your property is what they want you to send to them.

Some of these lures include, but aren't limited to (new lures surface frequently), secret shopper, romance, lottery, work-at-home and auction scams.

The National Consumers League recently set up a site (fakechecks.org), which is a great reference on Internet scams involving checks (complete with visual presentations), here.

So far as auction scams, eBay will no longer offer any protection for paper financial instruments on their site.

Here are some of the known items being counterfeited in large quantities and literally circulating worldwide:

Visa Travelers Cheques: 1-800-227-6811.

MoneyGram Money Orders (counterfeits may still use the old Travelers Express logo): 1-800-542-3590.

US Postal Money Orders: 1-877-876-2455 (mail fraud) option 4, then go to option 2.

American Express Gift and Travelers Cheques: 1-800-221-7282.

FDIC Alerts on the counterfeit cashier's and official checks in circulation, here. There is a feature that allows you to search them. I would try it by using the name of the institution.

Counterfeit cashier's and official checks change almost daily. The counterfeiters use legitimate account numbers and convincing looking check stock that will verify in most automated telephone verification systems.

It's probably good advice to never trust an automated system. In the case of a counterfeit, real ABA/account numbers are used by the counterfeiters. Because the information is real, they get past an automated verification system fairly easily. If you really want to know and believe an item is a counterfeit, ask to speak to a live person, preferably in the fraud department.

If you are dealing with a suspected counterfeit cashier's, or official check, I highly recommend reading a post I collaborated on with Tom Fragala (CEO of Truston Identity Theft Protection Services):

Counterfeit Cashier's Checks Fuel Internet Crime

Bank employees sometimes verify counterfeit instruments as legitimate. In some instances, especially at a teller window, they have been mistaken. If this occurs, you will be notified days later and the bank will take no responsibility.

Even more alarming, I have talked to and get comments/e-mails from people all the time who are getting arrested after trying to negotiate these items.

Here is what I wrote about this growing phenomenon in a previous post, along with my personal speculation as to why this is happening more frequently:

When the check is discovered to be fraudulent, anywhere from right on the spot to about ten days later the person passing the item is left holding the bag. This can translate into a loss of their freedom (getting arrested), being held financially liable, or a combination of both these consequences.

The real victims can probably blame this new phenomenon on all the criminals, who are pretending to be victims and then cashing the items themselves. Here is how I described this in a recent post, where an International task force discovered millions of dollars (face value) of these items destined to be shipped, worldwide:

A new trend has been noted called reverse-scamming, also. This occurs when scammers have the bogus instruments sent to them, cash them and then never follow the instructions to wire the money.

If confronted, these reverse scammers will normally claim to be victims. A key way to pick out a reverse scammer is that, in most instances they forget to wire the money back to the scammer that sent them the counterfeit instrument.

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Scammers Exploiting MoneyGram Money Order Verification System

If you were scammed recently with a money order, the counterfeit might have been an instrument spoofing the MoneyGram brand. These money orders have been known to appear in all the too good to be true/don’t exactly make sense come-ons being passed by spam e-mails or via a direct solicitation in a chat room.

In case you are not familiar with all the variations of these come-ons, they include , but aren't limited to (new lures surface frequently), the secret shopper, romance, lottery, work-at-home and auction scams.

The common denominator in most of the scams is there will be a request to send the money you receive via wire transfer (if you don’t get caught), to the fraudster sending you this garbage for a small cut of the total amount. That is unless they are buying goods from you. In this case, the item you are selling is what they want.

In the past, a simple call to MoneyGram’s verification line (1-800-542-3490) normally was all that was needed to reveal the fact that the item was fraudulent. Unfortunately, this is no longer the case. The criminals producing these instruments are now taking advantage of a flaw in the automated verification system, which is tricking people into believing that the money orders are good.

When a MoneyGram money order is called in for verification, the system prompts the user to enter all the particulars of the instrument, including the serial number and dollar amount. If the system doesn’t spot a discrepancy, it gives out a standard disclaimer stating there are no stops or holds on the item. If the system catches a discrepancy, it directs the caller to a live operator during their business hours.

In recent weeks, I’ve received reports of this being exploited in two ways. In the first instance – a legitimate money order is purchased for a small amount (normally $1.00) –then is chemically washed and altered to reflect a large dollar amount. It is then passed before it registers in the verification system – and since the system doesn’t recognize the dollar amount – it gives out the standard disclaimer that tells the caller there are no stops or holds on the item. According to the people, I’ve asked, money orders do not register in the system for anywhere between 24 and 96 hours after being issued by a MoneyGram agent.

In these instances, since the item was printed on actual paper, it contains all the known security features. These include a heat sensitive circle, which changes color when rubbed.

A second variation of this scam has also been seen. In this variation, the instrument is a copy of a money order purchased for a small dollar amount. These will pass muster in the system as described above, but the security features will not be present. In this second version of the scam, the dates were printed to make it appear as if the item had been purchased several weeks before the legitimate item actually was. I suspect this was to trick people, who had already discovered the "washed instrument" mutation of this scam.

When I first started getting reports on these variations of the scam, I thought it might be only targeting a limited geographical area. Normally when washing items occurs, this is the case. Since then, I've discovered this is happening throughout North America and the items are being shipped using overnight services, such as Federal Express and UPS.

I have also had reports that these are being passed not only via online come-ons, but also by professional groups who specialize in passing counterfeit instruments.

I went to the MoneyGram site to see if there were any warnings about this specific scam and found none. They do have a consumer protection area on their site, which refers to all the come-ons to trick people to cash these items. They also have information on how to verify their product in the FAQ area for customers on their site.

The sad fact is that money order companies do not take a loss on these instruments. When the items is discovered to be a fraud – they return it to the institution who cashed it and the institution goes after (if they can find them) – the person who cashed them. With any money order, it is nearly impossible to be made whole by the issuing company, itself. In fact, many experts will tell you that accepting a money order is more risky than accepting a personal check. If you listen to the disclaimer on the verification line it tells you exactly that.

So far as getting these instruments in too good to be true online scams – with the sour economy – I am seeing more and more people who really want to believe they have come into a financial windfall. When they fall for these scams – one thing is for certain – which are they are going to be held liable for cashing the items when the scam is discovered. This will certainly include being held financially liable, but can also mean facing criminal charges.

So far as counterfeit MoneyGram instruments – although a lot of them seem to be out there – they are not the only items being counterfeited. U.S. Postal Money Orders have been seen frequently in the past, too. Recently, the U.S. Postal Service redesigned their product and has a new page on their site to help consumers verify their product. Counterfeit cashier's checks, money orders, gift and travelers cheques are also known to be frequently counterfeited and used in these types of scams.

If you want to learn more about these scams, I recommend going to fakechecks.org, where you can see some highly visual demonstrations of these schemes. Another good resource on this subject – particularly if you are a victim – is FraudAid. The folks at FraudAid actually provide resources and advocate for people falling for these scams.

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A new work-at-home business that scams everyone!

With the recent raids on Swift by ICE - a lot of people have wondered how much phony identification is out there. The most recent story about this is out of the Toronto area, where a large counterfeiting ring was discovered in a residential neighborhood.

The home based business was producing counterfeit identification, credit cards, government benefit cards and passports. In other words, they were making anything a criminal, illegal alien, or terrorist would desire - right out of a private home.

The City News (Toronto) is reporting:

The hunt began last May when Red Rocket officials put out a notice about phony Metropasses that were being distributed in the city. From there, they began to follow a long and winding road of deception that eventually led cops to a residence in Mississauga.

Armed with a search warrant, they entered the home last December 20th, and discovered illegal equipment - like computers, hot stamp pressers, special inks and more - that allowed suspects to turn out the illegal phonies by the thousands. They also found seemingly endless supplies of the finished products.

They were stunned to see scores of blank cards, OHIP cards, altered driver's licenses, even passport photos arrayed inside the home.

City News story with interesting video, here.

It's no wonder that both Canada and the United States (as well as many others) are having a huge problem with illegal immigration, border security and financial crimes.

Here are some similar stories about the same activity in the United States:

Is Bashing DHS for the Swift Raids Fair?

Mexican Organized Crime Ring is Mass Producing Fake Documents - and Considers Terrorism an American Problem

And the UK seems to have discovered the same problem:

International Identity Theft Ring tied to Bank

Of course, the people doing this don't honor borders, or jurisdictions - which means the proceeds from this problem can "easily travel" and victimize a lot of people.

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IT Students Aren't the Only Human Resources that Internet Criminals Desire

In the past couple of days, I've seen a lot of articles about IT (Information Technology) students being taken to the dark-side (recruited) by organized crime.

Reuters is quoting a McAfee report released in the past couple of days.

Although, hiring IT students seems to be the latest story going around, recruiting people to commit Internet crime is nothing new. As the article aptly states, organized crime has the money to recruit whatever experts they need.

And IT students aren't the only ones being recruited.

Starting with the fall of the (Soviet Union) "evil empire" and the rise of Eastern European organized crime, there have been a lot of "technical experts" being used for nefarious purposes. The Reuters article mentions that the tactics being used are the same ones used by the KGB to recruit spies.

In fact many experts speculate that Eastern European crime has a lot of "highly placed" former KGB types in their ranks.

In 1997, FBI Director Louis Freeh stated before Congress:

The Russian syndicates conduct the most sophisticated criminal operations ever seen in the United States, based on their access to expertise in computer technology, encryption techniques and money-laundering facilities that process hundreds of millions of dollars.

According to Freeh, part of that expertise is said to be provided by "former KGB officers working directly with some of those organized crime groups, and that poses an additional level of threat and sophistication.

Story courtesy of Risk Assessment Services, here.

And Russian organized criminals aren't the only players out there.

Dr. Phil Williams, a visiting CERT (Computer Emergency Readiness Team) scientist wrote about this a few years ago:

In recent years, there has been a significant increase in the sophistication of organized crime and drug trafficking groups. Colombian drug trafficking organizations, for example, have followed standard business practices for market and product diversification, exploiting new markets in Western Europe and the former Soviet Union. Criminal organizations and drug traffickers have increasingly hired financial specialists to conduct their money laundering transactions. This adds an extra layer of insulation while utilizing legal and financial experts knowledgeable about financial transactions and the availability of safe havens in offshore financial jurisdictions. Similarly, organized crime does not need to develop technical expertise about the Internet. It can hire those in the hacking community who do have the expertise, ensuring through a mixture of rewards and threats that they carry out their assigned tasks effectively and efficiently.

Dr. Williams full essay, here.

Although, I'm sure IT students are being recruited -- they probably aren't the first -- or the only type of experts being hired.

And there are a lot of disorganized criminals recruiting people, also.

Here are a some previous posts, I've done on so-called "disorganized criminals," who recruit other people to do their "dirty work."

Work at Home Scams

Cyber Gangs Luring Children to Launder Money

BBB Worker Takes Job Processing Fraudulent eBay Transactions

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80 year old man loses over $700,000 to advance fee (419) scammers

With spam e-mails offering too good to be true come-ons filling up our mailboxes, we often forget that there are some very real people who get victimized after falling for one of them.

Of course with the availability of botnets -- which command legions of spam spewing zombies (compromised computers)-- even if only a few people fall for the scheme, the scammers still make a tidy sum off of other people's misfortunes.

An example of this can be found on the Newport Beach Police website, where an elderly gentlemen lost a lot of money (probably his life savings) to one of these schemes:

Recently, an 80 year old resident of the city learned he was a victim of an international lottery scam. He originally received an email claiming he had won an overseas lottery which required him to pay a processing fee to have the funds released. This scam continued for a two year period and ended with the victim losing over $700,000.00.

Scam operators (often based in Canada) are using email, telephone and direct mail to entice U.S. consumers to buy chances in high-stakes foreign lotteries from as far away as Australia and Europe. These lottery solicitations violate U.S. law, which prohibits the cross-border sale or purchase of lottery tickets by phone or mail.

This type of scam is often referred to as an Advance Fee (419) scam.

Of course, the lottery scam isn't the only one out there. There are work-at-home (job) scams, secret shopper, romance, lottery and auction scams being sent out in millions (billions ?) of e-mails, also. And if you don't have your own financial resources, the scammers will gladly provide you with a wide array of counterfeit financial instruments to negotiate. They could care less if you get arrested and expect that you will wire them any proceeds if you successfully pass the bogus instrument.

Please note, that just because you initially are able to pass the instrument doesn't mean that someone won't come after you, later.

The news release from Newport Beach Police Department offers the following advice on how to report scams like this:

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

They also point to a page on the FTC website about cross border scams, which can be seen here.

If you are a more "visual type," I recommend going to fakechecks.org, which has a series of video presentations on this subject.

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Immigrants targeted in learn English (with Rhythm) scam

Immigrants are often targeted in scams because they are less likely to report them. Here is an example -- where the Oregon AG with some assistance from the Willamette University College of Law Clinical Law Program is going after four California corporations for scamming immigrants -- who want to learn English.

Ironically, I seem to hear a lot of criticism about immigrants, who don't want to learn English. In this instance, people trying to exactly this (learn English), were being scammed!

From the Oregon AG (Attorney General) press release:

The lawsuit alleges that from 2002 to 2005 the defendants targeted members of Oregon's Hispanic community by advertising "free" English-language instruction courses entitled "Ingles con Ritmo" (English with Rhythm) and later charged exorbitant shipping and handling fees. The defendants repeatedly demanded additional payments for products that consumers never ordered or received. Thereafter, the defendants falsely represented themselves as third-party debt collectors and lawyers and threatened legal action in an effort to extract more money from the victims. In all cases, the victims owed the defendants nothing.

I decided to Google "Ingles con Ritmo" (English with Rhythm) and found an article by Consumer Affairs, where the FTC filed a similar action in June.

From the FTC press release:

According to the FTC’s complaint, from 2003 to 2005 the defendants sold an English-language instruction course, “Inglés con Ritmo,” advertised on Spanish-language television and the defendants’ Web sites, http://www.tonorecords.com/ and http://www.tonomusic.com/, stating that it was free due to government or non-profit subsidies. Inquiring consumers were told that a shipping and handling fee of $100 to $169 applied. Since 2006, the complaint states, the defendants, posing as third-party debt collectors, told consumers they owed money, typically $900, and repeatedly called them, even though the evidence shows that they owe no money.

The defendants are charged with violating the FTC Act and the Fair Debt Collection Practices Act (FDCPA) by falsely claiming that a debt is owed; by falsely claiming to be, or to represent, an attorney; and by falsely threatening legal action, arrest, imprisonment, property seizure, or garnishment of wages. Other FDCPA violations alleged are attempting to collect an amount of debt not authorized by contract or permitted by law; harassing consumers; and failing to inform consumers, within five days of their initial communication with them, of their right to dispute and obtain verification of their debt and the name of the original creditor.

The corporations and individuals listed in the suit are:

Tono Records, dba Tono Music and Professional Legal Services, Tono Publishing, Promo Music, Millennium Three Corp., Dulce Ugalde, Luis Roberto Ruiz, and Maria Oceguera, all based in Los Angeles County, California.

As of this writing, both the sites linked to in the FTC press release are no longer active.

Although, I'm glad to see a civil action undertaken in this instance, I have to wonder why criminal charges aren't being filed. Some of the collection practices allegedly being used, might be defined as "extortion," which is a criminal offense.

Consumer Action, a non profit organization that has been around since 1971 has a page on their site detailing the most common scams, where immigrants are targeted.

They list the most common scams against immigrants, which were put together by the FTC in 2006:

• Predatory lending practices. Lower income levels and other factors can make obtaining access to credit difficult. Moreover, Hispanics unfairly may be charged higher interest rates.

• Immigration fraud. Perpetrated by so-called “immigration consultants,” such schemes tend to increase when immigration legislation (for example, for an “amnesty”) is being proposed or considered. The “consultants” take advantage of general awareness of possible new programs and their victims’ lack of sophistication about the legislative process.

• Used cars. Some sellers fail to comply with applicable state and federal laws, such as the FTC’s Used Car Rule (if a transaction is conducted in Spanish, the mandated “Buyers Guide,” disclosing whether the vehicle comes with a warranty or “as is,” must be provided in Spanish) or California’s law that if negotiations are conducted in Spanish, the written contract also must be in Spanish.

• Health insurance fraud. Because minimum wage earners often do not obtain health insurance from their employers, they are attracted to offers for low-cost health insurance, which may not provide the advertised benefits, if any.

• Buying clubs (offering discounts on products and services). For Hispanics who seek discounts and best prices, offers for buying clubs are extremely attractive. Panelists at an FTC Hispanic/Latino Outreach Forum described a Hispanic cultural affinity for “free” or discounted goods and services, and an economic need for them driven by lower income levels as a group. Buying clubs often are offered for free for thirty days, requiring the consumer to cancel before the end of thirty days to avoid being charged for the club.

• Work-at-home schemes. The panelists considered this a growing problem area that particularly takes advantage of undocumented immigrants seeking an income without having a traditional employer. Tackling this fraud also poses challenges because these schemes are advertised not just in classified ads and other media, but often by signs tacked onto telephone poles.

• Notario fraud. In most Latin American countries, the term “notario” implies that the person described is a licensed attorney. Panelists reported a common scam involving individuals who represent themselves as “notario” and offer help with the immigration process; in fact, these individuals are not attorneys.

• Remittances. The panelists noted that many Hispanics wire money to relatives in their home countries and that there are many problems with undisclosed fees or fees that vary from what was disclosed.

• Prepaid phone cards. Panelists agreed that problems with undisclosed fees are commonplace with these cards.

• Employment agency fraud. This fraud preys upon undocumented immigrants looking for work and tends to increase when the economy is in a downturn.

• Panelists observed that purported cures for many ailments appear in numerous Spanish newspapers and other Spanish-language media.

Oregon AG press release, here

FTC press release, here.

The FTC now has information in Spanish on their site, here.

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Does anyone know - whether or not - check fraud is on the rise?

I sometimes wonder - whether or not - anyone really knows how much check fraud is out there?

Law enforcement jurisdictions often have dollar amounts (some fairly high), which must be met before a case is actively investigated - causing it to be recorded as a statistic. And in the private sector - a lot of NOT very "clear reasons" are used to return checks, which might or (might not) mean fraud.

My two favorites reasons the banks use to return checks are "refer to maker" and "stop payment." This might mean someone was unhappy with a service that was performed, or it could mean the item is counterfeit and the owner of the account placed "stop payments" on the checks. It's even possible that items returned as NSF (non-sufficient funds) are forgeries, or counterfeits because the owner of the account has yet to discover their account has been compromised.

The same holds true with "fraud accounts" that banks open for crooks (new account fraud). New account fraud occurs when fraudster(s) open an account (often with fake information), write a series of checks for a lot more than what is in the account, and disappear (literally).

Often they do this over a weekend, and withdraw the amount they initially deposited, also.

New account fraud items normally return as (NSF) non-sufficient items until the bank closes the account. Once this occurs, they are classified as "account closed." Non-sufficient fund and account closed items are normally not considered a fraud classification.

The only thing that is certain is that the loser is going to be the party, who accepted the check, and not the banks. In fact -- some believe the banks are the winners in this process -- because they make a lot of money from "bounced check" fees.

In a lot of the recent Internet scams, customers have even gone to a bank employee to ask if an item is good. After trusting the employee's expertise, the check was deposited and the funds were made "available." A few days later, the item was returned as fraud and the customer's account was "garnished."

And in all the cases, I've heard where this happened, the bank didn't accept any liability. Here's a post, I wrote about this:

Don't Trust a Bank to Tell You Whether a Check is Good, or Not

The other day, I came upon an article by SmartPros, indicating that a "possibility exists" that check fraud will rise in the coming year.

According to SmartPros:

Identity theft trends in the next year may include an increase in check fraud, check synthesizing and check counterfeiting, according to The Identity Theft Resource Center, a nonprofit victim assistance center.

SmartPros story, here.

In case no one has been watching - check fraud appears to have been growing rapidly over the past several years. It's true that all the bogus "financial paper" circulating aren't only checks, we are seeing a lot of counterfeit money orders, also.

Counterfeit cashier's checks and other bogus paper financial instruments (money orders, travelers and gift cheques) have been showing up in secret shopper, romance, lottery, work-at-home and auction scams at ever increasing rates. The situation seems to be getting worse - as more and more people - become Internet users.

In fact, eBay recently announced they will no longer offer any protection for paper financial instruments on their site.

And so far as the amount of them out there, there is evidence that bogus paper financial instruments are being produced on an industrial level:

Are Counterfeit Documents being Mass-Produced in Nigeria?

The Federal Deposit Insurance Corporation sends out alerts on all the counterfeit cashier's checks, which are pretty hard to keep up with. If you want to see what I mean, link here.

We read a lot about "DIY" (do-it-yourself) kits being sold to commit phishing and eBay fraud in shady Internet crime forums -- but in the case of checks -- DIY kits are openly sold in stores, and available on e-commerce sites.

In fact, there are a lot of "legitimate companies" selling all sorts of software, printers and even magnetic ink, which are capable of turning out some pretty convincing counterfeits. Throw in a computer, and it's not very difficult to start making checks.

To show all the "DIY check technology" for sale on the Internet, I ran a Google search, here. Of course, a lot of this (including the paper) can be bought at your local office supply store, also.

As with a lot of fraud, technology seems to be enabling the problem.

Although check fraud might continue to grow, there is little doubt that it's already a huge problem. BankersOnline did an article in 2002 stating:

About five years ago, U S NEWS and WORLD REPORT did the most in-depth study on this that we've had, and I've used their figures ever since. They probably are low by now. They said the financial institutions in the United States lose about $12 Billion a year in check fraud, and the retail industry loses a like amount. The total loss being $24 Billion as a result of check fraud. I think identity theft is getting a lot of publicity now - but it's been around for a long time. We just never gave it the designation of identity theft.

Since this report is now 5 years old and it is using figures that were 5 years old -- no one probably knows how much check fraud is really going on.

I guess until everyone comes up with some uniform standards, it's going to be impossible to determine how much check fraud is really out there.

BankersOnline article by Barbara Hurst, here.

A great resource on check fraud is the National Check Fraud Center. Their site provides a lot of expert information on check fraud and how to protect yourself from it.

Is check fraud on the rise? Despite the lack of statistics - my best guess is that it is!

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Did Vladuz hack eBay, or is stockpiled stolen information being used to make it look like he did?

(Picture courtesy of Yahoo Group, eBay_scamkillers)

There is a lot of speculation that eBay was hacked once again, and that Vladuz might be behind the latest episode.

Vladuz, who takes his name from a famous Romanian prince, Vlad Tepes, has plagued eBay with a string of hacking attacks in the past. Vlad Tepes was the inspiration for the novel, Dracula. In Internet folklore, Romanian scammers are often referred to as "Vlads."

Of course, eBay is denying that they were actually hacked. I'll let the reader form their own opinion.

Auction Bytes (Ina Steiner) is reporting:

eBay closed its Trust & Safety discussion board for hours on Tuesday after threads began appearing listing the names and addresses of eBay members. eBay spokesperson Nichola Sharpe said, "We think the fraudster obtained the eBay User names and IDs from previous account takeovers." The credit card information that was published alongside 1,200 names, User IDs and addresses were not associated with the financial information on file for those users at eBay or PayPal, Sharpe said.

Unfortunately, with the amount of account-takeovers caused by Phishing, eBay can suggest other ways the information might have been stolen. Phishing is where users are tricked into giving up their personal details, or downloading malware (crimeware), which steals it right off their hard drive.

I don't know which is worse, that they were hacked in this incident, or that all this information was compromised a long time ago? If it were compromised a long time ago, as eBay states, how much more compromised eBay information is out there?

The Cappnonymous Buds Blog has put together a pretty visual demonstration that makes a pretty good argument that eBay was hacked.

Account-takeovers enable criminals to scam others, using someone else's information. They can also be used to fence (sell) stolen merchandise with a high degree of anonymity.

It should also be noted that stolen payment(credit/debit) card details are often used to purchase the merchandise, which is then fenced.

To cover their tracks, the scammers often dupe people into laundering the proceeds of these sales in work-at-home (job) scams and wiring the money, normally across a border.

Whether Vladuz is behind this latest attack remains to be seen. But the fact remains, that there is a lot of fairly organized crime targeting eBay (my opinion) and other auction sites, on a daily basis.

Previous posts, I've written about eBay and auction fraud can be read, here.

In case anyone is interested in the graphic photo at the top, here is a post I did about a Yahoo Group that call themselves the eBay_scamkillers.

They are an all volunteer group, many of whom have impressive credentials, that are responsible for putting a lot of eBay scammers, where the sun don't shine (prison).

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