Fraud Report September 21, 2023

North Carolina: Nigerian man found guilty after trial for scheme that contacts lawyers and asked to be represented; sent them a fake counterfeit check as payment, and then canceled and asked for a refund by bank transfer; got over $20 million
New Jersey: Two men from India get 41 months prison each for fraud that used robocalls from India to impersonate the Social Security Administration or the FBI and DEA; handled $1.2 million of victim money
New Facebook scam claims to be giving away laptop or Playstation, but asks for money to pay shipping; no product exists

Australia reports that scams calling Chinese speakers, claiming to be with the Chinese government, and threatening arrest or deportation, have recently doubled; demand victims pay a “fine.”

India busts eight tech support fraud call centers; arrest over 200

Full Report here

Fraud Report Sept. 14, 2023

7th Circuit affirms the FTC’s use of Section 19 to get restitution for fraud victims; case had gone to the Supreme Court

Hackers in North Korea stole $200 million in 2023; over $2 billion in the last five years

FinCEN issues alert warning of increase in mail theft; fake checks

New scam tactic?  Caesars casino in Las Vegas suffered a ransomware attack after a caller pretended to be an employee who wanted to change their password.  Who monitors password change requests at your organization? Is it pretty easy to change one?

Chinese hackers get access to the US government email system Is this a worldwide effort?  I’ve also seen recent reports of similar problems in Canada, the UK, and Sri Lanka.

Full Report here

Fraud Report August 31, 2023

Top Stories

CFPB settles with Lexington law firm; did business also as; get $2.7 Billion judgment; company now in bankruptcy

Canadian Anti-Fraud Centre reports sharp increase in scams offering jobs at home working on apps; claim to pay in crypto; set up online account for victims showing money increases, but can never withdraw it

FBI, working with seven European countries, takes down Qakbot botnet operation that sent spam with attachments containing malware that affected 700,000 worldwide To dismantle the botnet, the FBI gained lawful access to Qakbot’s infrastructure and redirected Qakbot traffic to FBI-controlled servers, which instructed infected computers to download an uninstaller file. This uninstaller was created by law enforcement to untether the victims’ computers from the Qakbot botnet, preventing further installation of malware through Qakbot.

United Nations report says at least 120,00 people in Myanmar and 100,000 in Cambodia are being forced to operate scams

  • Includes crypto romance scams and illegal gambling

Three Nigerian men extradited from the UK get prison for inheritance scams; 90 months, 87 months, and 82 months

Full report here

Fraud Report August 24, 2032

Top Stories

Social Catfish releases report on State of Internet Scams, using FTC and IC3 data, as well as their own survey

  • Losses have increased have at least quadrupled over the last five years, from $2.7 billion to $103 billion
  • Estimate real annual losses to romance scams at $200 billion
  • Massive increase in victims 20 and under
  • Most common apps used were Facebook, Google Hangouts, WhatsApp; Instagram and Plenty of Fish
  • State by state breakdown

DOJ announces nationwide coordinated effort to fight Covid 19 fraud;

  • 371 arrested; losses of $836 million
  • Many, or most, cases involved PPP fraud or unemployment fraud

UK jury finds t wo teenagers guilty of ransomware attacks, hacking; victims in include City of London Police, Nvidia, Rockstar Games, and Uber

FBI identifies crypto accounts containing more than $40 million stolen by North Korea

Australia arrests Chinese man involved in scam that took $100 from US victims in crypto romance scams

Full study here

Fraud Report August 17, 2023

Indiana: Man from India gets nearly four years prison; collected victim money sent by FedX in response to calls claiming the victims Social Security Number had been used in a drug crime; took in $1.5 million

India busts call center targeting Americans, arrest 115 people. Callers claimed to be US Customs, and said packages addressed to them contained illegal substances; had victims buy gift cards, supposedly to cancel the shipment

Poland, with help from Euorpol and the FBI, shut down operation that provided scammers with bulletproof hosting that let them do cyber attacks; arrest five

Singapore police arrest ten who pushed apps on social media that  allowed scammers to get access to bank accounts and steal money

Fake Check fraud up dramatically; crooks rob letter carriers, steal mail from boxes; thefts up 78% over the last year; FINcen says complaints to banks have nearly doubled over two years

Florida: Man gets 8 years prison for interstate moving fraud; used brokers, and raised price after loading goods; just repay nearly $3 million; codefendant also goes to prison

Arizona:  Nigerian man extradited from the UK gets 87 months prison; two other Nigerians extradited from Spain plead guilty to scheme that mailed letters to elderly in the US claiming they were due an inheritance but first had to send money for various fees

Full Report here

Fraud Report August 10, 2023

Fraud Report August 3, 2023

Top Stories

An extended look at the Maria DuVal psychic scam, which took in at one point $23 million every year from direct mailings and small money returns

Spain arrests 101 over text message scams that pretended to be the victim’s bank telling them of security problem and then crooks transferred money from victim accounts into mule accounts going to Malta

Full report here

Fraud Report July 27, 2023

Federal Reserve launches instant payment system FedNow

Scammers will surely exploit it. Consumer fraud issues were posed by NCLC.

Identity Theft Resource Center report; more data breaches in the first half of this year than all of last year

Video by rapper Punchmade Dev explains how to commit bank fraud by hacking; now removed from Youtube

Want to see Taylor Swift? BBB warns that it got 21,000 complaints about ticket fraud last year, a big increase.   Be VERY careful about where you buy tickets

Full report here

Fraud Report July 20,2023

Top Stories

FTC announces major collective effort against telemarketing scams

  • Over 100 state and federal enforcement actions; including criminal cases; includes five new FTC cases
  • One against Fluent filed by DOJ involves tricking people into consenting to receive calls, including robocalls; settles for $2.5 million
  • Another FTC complaint alleges California company tricked job seekers into “agreeing” to get robocalls
  • Third FTC settlement with Florida company that made illegal robocalls; 1.4 billion calls made
  • Fourth with Arizona AG settlement over robocalls trying to sell solar panels
  • Fifth FTC complaint against Florida company that helped overseas robocallers pretending to be Amazon
  • Here is a list of all cases in this effort

India: Police bust call center targeting Canadians asking them to pay for nonexistent online purchases; 23 arrested

Europol issues threat assessment finding that Cybercrime is big business; report itself here

Podcast by Int’l Ass’n of Financial Investigators on pet scams featuring Steve Baker

Does consumer consumer education about fraud work, and do we know if it is effective? By Anthony Pratkanis

Along with law enforcement and policy interventions, consumer education is one of the primary ways to prevent fraud crimes.  Fraud fighters create a steady stream of warnings, fliers, handouts, videos, mailers, web pages, and seminars.  If we are honest, we really don’t know if these interventions are working. More research in this area would be really helpful.

Considerable research finds that information campaigns are generally ineffective.  As Elliot Aronson and I describe in Age of Propaganda, information campaigns fail because it is difficult to break through a message-dense environment and recipients often find information uninteresting and telling them something they may not want to hear.  Education about fraud faces additional obstacles:  the target may have an illusion of invulnerability, be in a rationalize trap, is experiencing warning fatigue, and may perceive the prevention measures as too difficult to implement.  In addition, the con criminal is morphing and changing the scam, and, most importantly, con grifters’ mimicry is purposefully difficult to detect.

For the researcher, the challenge is developing research paradigms that provide efficient, timely evaluations of fraud prevention messages to accumulate knowledge of what works.  This requires being able to “trap the dependent variable” of victimization, which can be difficult to measure in the wild especially using self-reports. I developed the sting methodology (discussed in response to Myth #8) to address this issue.  Other potentially fruitful approaches include the development of proxy, intervening, and mediational measures.

Another valuable source for consumer education is the science of social influence (which I used to develop an investment seminar that reduced victimization by 50%) and fields such as social marketing, public health, drug and tobacco prevention, risk warnings, and public communication.  The knowledge base of these fields can provide guidance on creating and testing effective social influence campaigns to prevent fraud.  

 Editors Note:  My best judgment is that generalized advice such as “if it sounds too good to be true, it probably is” is worthless, and providing education with no context on how common a scam is little better.  A piece that provides a few details on how a scam works, somewhat like the detail to explain a magic trick, is far more effective.  But we could all benefit from more research on what works – and what does not.

Full report here