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Scams to avoid PDF Print E-mail
Written by M.K.   
Friday, 05 June 2009 11:46

Con artists, preying on the fears or greed of their victims, abound as investment portfolios and retirement accounts decline in value and unemployment and foreclosure rates rise.   As a result, recession related scams (including employments scams, investments scams, identity theft and other types of schemes) to separate you from your money are on the rise.

§         Employment Scams include all types of work-from-home scams.  Many of these are “phishing” scams (see identity theft below), including the following email that I received after responding to an online job posting for an accounting position (I’ve changed the names to protect the guilty):

“My name is John Doe, I am the C.E.O OF XYZ Company, Inc. My company produces various clothing material and assorted fabrics. We have clients we supply weekly all over the world and most of them make payments for our supplies every week in form of direct deposits and wire Transfers.

We need someone in your country to work as our Accounts Representative who has an account with any of the following banks: Halifax , Nationwide , Natwest, EGG , Lloyds TSB, HSBC, Barclays, The co-operative Bank and Abbey National for United Kingdom residents and ANY bank in the United States of America so that we can have our clients transfer into your bank account.

If you do not have any and you wish to open one for this purpose please locate their branch nearest to you or visit their various websites in order for Money to be Transfered into your Account. All you need to do is Open one today If you do not have One but If You do, You may Provide us with the Account details so that we may proceed with immediate effect.

You shall receive a 10% commission on any amount deposited into your account.
We assure you that any information provided with us will be fullly confidential.

Fill this if interested;

Full Name(Mr, Miss, Mrs):
Full Address:
Bank Name:
Bank Address:
Account Number:
Routing Number/Sort Code:
Card Number:
Card Limit:
Card Expiry Date:
Phone Number:

Yours Sincerely,

John Doe”

Other similar schemes would have you deposit their customers’ checks into your bank account, keep a large percentage (typically 10%) of the gross receipts and immediately wire the remaining (90%) to their foreign bank account.    It takes several days for the (deposited) check to bounce and for your bank to charge back the deposit, by which time you will have already wired the funds and you would be liable to repay the bank. 

Many of these scams are perpetrated by thieves in foreign countries, most notably Nigeria as well as Asian and former Soviet block nations, and therefore difficult (if not impossible) to prosecute. The emails are generally in language that was obviously not written by a native English speaker. 

No legitimate business would ever even consider processing their receipts through an employee’s personal checking account.  This would violate all internal control policies of any legitimate business.  Many businesses do outsource the processing of their customers’ payments to their commercial bank, using the bank’s lock box service.   Most credit-card, utility, insurance, mortgage and many other relatively small payments are handled in this way.  The payment is mailed (with a payment stub in a preaddressed envelope which is enclosed with the invoice) to a PO Box, processed by the bank’s employees and deposited directly to the company’s account.  A report (generally electronic, followed by a hard copy with the stubs attached) is then sent to the business, detailing the payments, which the business then credits to their customers’ accounts.  Although the banks do charge a fee for this service, it is the most efficient and inexpensive way for many companies to process their receipts, reducing the risk of embezzlement and leaving an audit trail. 

Other work-at-home employment scams require the prospective “employee” to purchase manuals and/or materials from the “employer” to be used to assemble something, typically a mass mailing, for which the “employee” would purportedly be paid after the (worthless) work is performed.  The con-artist makes money by selling you useless junk, and never pays you for your services. I fell for a similar scam decades ago when I was a high school student.  Remember, NO LEGITIMATE EMPLOYER requests any payment from prospective employees. 

§         Investment Scams include Ponzi (pyramid) schemes in which investors are promised very high yields on their investments. Some early investors are paid off with capital invested by new investors, making the scheme appear legitimate, until the pyramid collapses when too many investors try to cash-out their investments. 

Some investment scams offer real estate, which the advertising materials present as very scenic land, to be developed at some future date as expensive property. If you buy it you may own (after the development is completed) a lovely vacation home to enjoy for your own use or to sell for a very significant profit.  In reality, the land is in the middle of nowhere (typically desert, swamp or otherwise inaccessible) and is unlikely to ever be developed in your lifetime.

There are many other fraudulent investment scams.  One key to avoid becoming a victim is to always remember that if it seems too good to be true, it usually is!! 

§         Identify Theft is the most rapidly rising type of crime.  While it is not always preventable as our personal information is stored on third-party (i.e.: government, insurance, employer, healthcare provider and other) databases (over which we have no control and which may be accessed by hackers) there are some measures that we can take to reduce the likelihood of becoming victims.

o       Shred or securely file all personal data, especially documents containing your social security number, date of birth, mother’s maiden name, passwords, etc.  Also remove and shred your name and mailing address from junk mail.  Identity thieves do use trash as a source to identify potential victims.

o       DO NOT respond to phishing emails or phone calls!  Typically the caller identifies himself as an employee of your bank or credit-card company, informs you of some threat, and requests personal information (including your account number, PIN and/or password) or asks you to meet him/her at the bank so you can close out the account and open a new one.  Credit-card issuers do monitor accounts for unusual activity and occasionally call to verify that you did actually make an unusually large purchase(s), in which case a yes or no answer will suffice.  Legitimate financial institutions NEVER call to ask you to verify personal information or passwords or to close an account.  Government agencies, (i.e.: FBI, IRS, etc.) NEVER phone you and request your social security number or other personal information!!  The sender of the email directs you to a legitimate looking government or bank website that requests personal information.  If you get this type of email from your bank, call them to verify that it is legitimate.  If a government agency or financial institution actually does contact you, they already have your personal information and won’t ask you to provide it!!

o       Protect the personal information on your computer by using firewalls, antiviral and other software and avoid using unsecured wireless connections.  Also, don’t provide personal information to any website unless you are certain that it is a legitimate website that you intentionally accessed.

o       Check your bank, credit-card and all other financial accounts frequently for unauthorized withdrawals or charges.


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