Wednesday, November 3, 2010

Avoiding Fraud and Scams During The Holiday Season

by Ophelia W. Livingston

Word of mouth is fraud's worst enemy!
The holidays are traditionally a time of giving, yet they're also a time when crooks try to take advantage of consumers. During the holiday season, scams targeting your pocketbook tend to pop up more frequently, so please be aware! Listed below are several fraud and scams that are circling around and making stops in your inbox and/or mailbox.

Holiday Electronic Greeting Cards

Seems harmless, right? How could a nice card of caterpillars hugging hurt anyone? Well, they've become so popular that scam artists have started using them as bait for installing malware on your computer. This is especially true around holiday times – Christmas, Valentine’s Day, Mothers’ Day, etc. when millions of people send or receive e-greeting cards and e-gift cards. Here's how it works:
You receive an email letting you know that "a friend" has sent you a holiday greeting card. When you click the link to open the card, you are either directed to a site with malware on it, or you'll be asked to install a video plug-in or some other kind of software so you can view the card.

SMISHING
"Smishing" is the newest twist on "phishing" - when you get an email from a supposedly trustworthy source like your bank or PayPal, claiming there's a problem with your account. The scammers hope you'll click the link in the scam email and enter in all your account information that they in turn use to steal your money.

Instead of an email, the "smishers" send you an SMS text message to your phone. The text says there's something wrong with your account and they provide a phone number they hope you'll call and then be duped into providing all your information. How can you prevent getting "smished"? Do your research. Before even thinking about calling the number, Google it. If it's a legitimate number, it should match the information on the financial institution's official website. If it's a scam, you'll probably uncover websites full of other people who also got "smished" and want to talk about it.


Nigerian Email Scam
This scam has been used for over ten years and is sent out to victims via letter, e-mail, and fax. It consists of a message stating the sender has a large sum of money, usually around 35 million, and needs help transferring it out of Nigeria, or some other place. As a reward for your help, the sender promises to pay you a few million dollars.

Once you respond stating your willingness to help, the sender explains that there are transfer fees for the transaction, and that you'll need to pay them. Surprise!! You get deeper and deeper into the scam as the money supposedly gets closer and closer to your bank account, but can't seem to quite get there without an increasing amount of money from you. These emails are constantly being modified. A new one message supposedly comes from a rich Iraqi businessman trying to get 120 million dollars out of the country. Here's a sample:



To learn more about Nigerian Email scams go to: http://www.nigerianemailscam.com/

Auction Fraud (eBay and Yahoo Auctions)
Auction fraud was the second most reported consumer fraud complaint to the FTC, totaling 51,000 auction complaints in 2002. The fraud is simple - put up a fake ad on eBay, let someone "win" the bid and send in their money, but never send out the merchandise. To learn more visit www.scam.com.


"You've Won a Prize!" Lottery Scam
We all want to be winners, but if someone calls you on the telephone and offers you the chance to receive a "major" credit card, a prize, or other valuable item, but asks you for personal data -- such as your Social Security number, credit card number or expiration date, or mother's maiden name -- ask them to send you a written application form.

If they won't do it, tell them you're not interested and hang up. If they will, review the application carefully when you receive it and make sure it's going to a company or financial institution that's well-known and reputable. The Better Business Bureau can give you information about businesses that have been the subject of complaints.

Phony Identity Theft Protection or Credit Repair Scams
The Federal Trade Commission has warned that some companies that claim to be identity theft prevention services are scam artists trying to get your driver’s license number, mother’s maiden name, Social Security number and credit and bank account numbers. Don't ever give out any personal information over the phone or online unless you are familiar with the business that is asking for it. If you are unsure about a firm, check it out with the Better Business Bureau. Credit repair scams offer to erase accurate negative information from your credit file so you can qualify for a credit card, auto loan, home mortgage, or a job.

The scam: The scam artists who promote these services can't deliver. Only time, a deliberate effort, and a personal debt repayment plan will improve your credit. The companies that advertise credit repair services appeal to consumers with poor credit histories. Not only can't they provide you with a clean credit record, but they also may be encouraging you to violate federal law. If you follow their advice by lying on a loan or credit application, misrepresenting your Social Security number, or getting an Employer Identification Number from the Internal Revenue Service under false pretenses, you will be committing fraud.

"Make Millions Stuffing Envelopes!" Scam
These business opportunities make it sound easy to start a business that will bring lots of income without much work or cash outlay. The solicitations trumpet unbelievable earnings claims of $140 a day, $1,000 a day, or more, and claim that the business doesn't involve selling, meetings, or personal contact with others, or that someone else will do all the work.
Many business opportunity solicitations claim to offer a way to make money in an Internet-related business. Short on details but long on promises, these messages usually offer a telephone number to call for more information. In many cases, you'll be told to leave your name and telephone number so that a salesperson can call you back with the sales pitch. The scam: Many of these are illegal pyramid schemes masquerading as legitimate opportunities to earn money.

To learn more contact OWL Risk Management Consulting at owlriskmanagement@gmail.com or call 1-866-579-7475

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