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ARCHIVED FRAUD ARTICLES

Schemes, tricks and online fraud come in many varieties. Every day there is a new scheme and a new way to defraud the public. These tips and tricks will make you aware of some of the types of schemes out there. Share this page with friends and relatives so they won't fall prey to any of them. For a list of all archived articles visit our Archived Articles List.




 

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COMMON FRAUD SCHEMES

The following are some of the most common scams that the FBI investigates and tips to help prevent you from being victimized.

6 Warning Signs of Telemarketing Fraud

When you send money to people you do not know personally or give personal or financial information to unknown callers, you increase your chances of becoming a victim of telemarketing fraud.
Here are some warning signs of telemarketing fraud—what a caller may tell you:

  • "You must act 'now' or the offer won't be good."
  • "You've won a 'free' gift, vacation, or prize." But you have to pay for "postage and handling" or other charges.
  • "You must send money, give a credit card or bank account number, or have a check picked up by courier." You may hear this before you have had a chance to consider the offer carefully.
  • "You don't need to check out the company with anyone." The callers say you do not need to speak to anyone including your family, lawyer, accountant, local Better Business Bureau, or consumer protection agency.
  • "You don't need any written information about their company or their references."
  • "You can't afford to miss this 'high-profit, no-risk' offer."

If you hear these or similar "lines" from a telephone salesperson, just say "no thank you" and hang up the telephone. 

Tips for Avoiding Telemarketing Fraud:

It's very difficult to get your money back if you've been cheated over the telephone. Before you buy anything by telephone, remember:

  1. Don't buy from an unfamiliar company. Legitimate businesses understand that you want more information about their company and are happy to comply.
  2. Always ask for and wait until you receive written material about any offer or charity. If you get brochures about costly investments, ask someone whose financial advice you trust to review them.
  3. Always check out unfamiliar companies with your local consumer protection agency, Better Business Bureau, state attorney general, the National Fraud Information Center, or other watchdog groups. Unfortunately, not all bad businesses can be identified through these organizations.
  4. Obtain a salesperson's name, business identity, telephone number, street address, mailing address, and business license number before you transact business. Some con artists give out false names, telephone numbers, addresses, and business license numbers. Verify the accuracy of these items.
  5. Before you give money to a charity or make an investment, find out what percentage of the money is paid in commissions and what percentage actually goes to the charity or investment.
  6. Before you send money, ask yourself a simple question. "What guarantee do I really have that this solicitor will use my money in the manner we agreed upon?"
  7. Don’t pay in advance for services. Pay services only after they are delivered.
  8. Be wary of companies that want to send a messenger to your home to pick up money, claiming it is part of their service to you. In reality, they are taking your money without leaving any trace of who they are or where they can be reached.
  9. Always take your time making a decision. Legitimate companies won't pressure you to make a snap decision.
  10. Don't pay for a "free prize." If a caller tells you the payment is for taxes, he or she is violating federal law.
  11. Be sure to talk over big investments offered by telephone salespeople with a trusted friend, family member, or financial advisor. It's never rude to wait and think about an offer.
  12. Never respond to an offer you don't understand thoroughly.
  13. Never send money or give out personal information such as credit card numbers and expiration dates, bank account numbers, dates of birth, or social security numbers to unfamiliar companies or unknown persons.
  14. If you have been victimized once, be wary of persons who call offering to help you recover your losses for a fee paid in advance.
  15. If you have information about a fraud, report it to state, local, or federal law enforcement agencies.

 

 

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FBI FRAUD TIPS FOR SENIORS

Our Common Fraud Schemes webpage provides tips on how you can protect you and your family from fraud. Senior Citizens especially should be aware of fraud schemes for the following reasons:

  • Senior citizens are most likely to have a “nest egg,” to own their home, and/or to have excellent credit—all of which make them attractive to con artists.
  • People who grew up in the 1930s, 1940s, and 1950s were generally raised to be polite and trusting. Con artists exploit these traits, knowing that it is difficult or impossible for these individuals to say “no” or just hang up the telephone.
  • Older Americans are less likely to report a fraud because they don’t know who to report it to, are too ashamed at having been scammed, or don’t know they have been scammed. Elderly victims may not report crimes, for example, because they are concerned that relatives may think the victims no longer have the mental capacity to take care of their own financial affairs.
  • When an elderly victim does report the crime, they often make poor witnesses. Con artists know the effects of age on memory, and they are counting on elderly victims not being able to supply enough detailed information to investigators. In addition, the victims’ realization that they have been swindled may take weeks—or more likely, months—after contact with the fraudster. This extended time frame makes it even more difficult to remember details from the events.
  • Senior citizens are more interested in and susceptible to products promising increased cognitive function, virility, physical conditioning, anti-cancer properties, and so on. In a country where new cures and vaccinations for old diseases have given every American hope for a long and fruitful life, it is not so unbelievable that the con artists’ products can do what they claim.

Internet Fraud
As web use among senior citizens increases, so does their chances to fall victim to Internet fraud. Internet Fraud includes non-delivery of items ordered online and credit and debit card scams. Please visit the FBI’s Internet Fraud webpage for details about these crimes and tips for protecting yourself from them.

Fraudulent “Anti-Aging” Products

Tips for Avoiding Fraudulent “Anti-Aging” Products:

  • If it sounds too good to be true, it probably is. Watch out for “Secret Formulas” or “Breakthroughs.”
  • Don’t be afraid to ask questions about the product. Find out exactly what it should and should not do for you.
  • Research a product thoroughly before buying it. Call the Better Business Bureau to find out if other people have complained about the product.
  • Be wary of products that claim to cure a wide variety of illnesses—particularly serious ones—that don’t appear to be related.
  • Be aware that testimonials and/or celebrity endorsements are often misleading.
  • Be very careful of products that are marketed as having no side effects.
  • Question products that are advertised as making visits to a physician unnecessary.
  • Always consult your doctor before taking any dietary or nutritional supplement.

Investment Schemes
As they plan for retirement, senior citizens may fall victim to investment schemes. These may include advance fee schemes, prime bank note schemes, pyramid schemes, and Nigerian letter fraud schemes. Please visit the Common Fraud Schemes webpage for more information about these crimes and tips for protecting yourself from them.

Reverse Mortgage Scams
The FBI and the U.S. Department of Housing and Urban Development Office of Inspector General (HUD-OIG) urge consumers, especially senior citizens, to be vigilant when seeking reverse mortgage products. Reverse mortgages, also known as home equity conversion mortgages (HECM), have increased more than 1,300 percent between 1999 and 2008, creating significant opportunities for fraud perpetrators.

Reverse mortgage scams are engineered by unscrupulous professionals in a multitude of real estate, financial services, and related companies to steal the equity from the property of unsuspecting senior citizens or to use these seniors to unwittingly aid the fraudsters in stealing equity from a flipped property.

In many of the reported scams, victim seniors are offered free homes, investment opportunities, and foreclosure or refinance assistance. They are also used as straw buyers in property flipping scams. Seniors are frequently targeted through local churches and investment seminars, as well as television, radio, billboard, and mailer advertisements.

A legitimate HECM loan product is insured by the Federal Housing Authority. It enables eligible homeowners to access the equity in their homes by providing funds without incurring a monthly payment. Eligible borrowers must be 62 years or older who occupy their property as their primary residence and who own their property or have a small mortgage balance. See the FBI/HUD Intelligence Bulletin for specific details on HECMs as well as other foreclosure rescue and investment schemes.

Tips for Avoiding Reverse Mortgage Scams:

  • Do not respond to unsolicited advertisements.
  • Be suspicious of anyone claiming that you can own a home with no down payment.
  • Do not sign anything that you do not fully understand.
  • Do not accept payment from individuals for a home you did not purchase.
  • Seek out your own reverse mortgage counselor.

 

 Article by: http://www.fbi.gov/scams-safety/fraud/seniors

 

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FRAUD SCHEMES AGAINST SENIORS

Senior Citizens especially should be aware of fraud schemes for the following reasons:

  • Senior citizens are most likely to have a “nest egg,” to own their home, and/or to have excellent credit—all of which make them attractive to con artists.
  • People who grew up in the 1930s, 1940s, and 1950s were generally raised to be polite and trusting. Con artists exploit these traits, knowing that it is difficult or impossible for these individuals to say “no” or just hang up the telephone.
  • Older Americans are less likely to report a fraud because they don’t know who to report it to, are too ashamed at having been scammed, or don’t know they have been scammed. Elderly victims may not report crimes, for example, because they are concerned that relatives may think the victims no longer have the mental capacity to take care of their own financial affairs.
  • When an elderly victim does report the crime, they often make poor witnesses. Con artists know the effects of age on memory, and they are counting on elderly victims not being able to supply enough detailed information to investigators. In addition, the victims’ realization that they have been swindled may take weeks—or more likely, months—after contact with the fraudster. This extended time frame makes it even more difficult to remember details from the events.
  • Senior citizens are more interested in and susceptible to products promising increased cognitive function, virility, physical conditioning, anti-cancer properties, and so on. In a country where new cures and vaccinations for old diseases have given every American hope for a long and fruitful life, it is not so unbelievable that the con artists’ products can do what they claim.

 

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GUARDING AGAINST FRAUD

What can you do to defend yourself from scams, frauds and identity theft? Whether you think you have been the victim of a fraud or scam or want to be proactive in protecting yourself, here is a list of specific and simple actions that you can take, some just once, to protect yourself and your family!  We have ranked them in order that you should take them:

  1. Don't use or carry a checkbook. Pay by cash or credit card. Paying your bills through your bank or credit union's online bill paying service (which is usually free) is much safer than mailing a check.
  2. Buy and use a paper shredder. Shred any documents that have your social security number or other financial information, such as your bank account numbers, credit card numbers etc.  identity thieves actually go through homeowner's trash to obtain personal information. If you don't have a shredder, burn these  documents completely in the fireplace. For large volumes of sensitive documents, you can go to a paper shredding service.
  3. Freeze your credit!  It prevents scammers from opening unauthorized accounts in your name. Even if your state is one of the few that doesn't allow a freeze, thanks to pressure from consumer advocacy groups, you can still freeze your files at the three major credit bureaus.  See this page for more information about both freezes.
  4. Sign up on the Do-Not-Call List
  5. Sign up to block credit card offersfrom arriving in your mailbox.
  6. Don't carry your Social Security card with you. When you renew your driver's license, make sure the DMV does not use your Social Security number as your driver's license number.
  7. Use a separate email address when you post messages to any public forum, such as newsgroups and mailing lists. Free email accounts from Yahoo and Hotmail are perfect for this. Never use your personal email address for this purpose: you will be flooded with spam. You can periodically check this email account to see what is spam and what isn't. A bonus is that Yahoo's spam blocker is better than those from most ISP's! And your main personal email address won't be as clogged with spam.   
  8. Don’t give out any financial information, such as checking account and credit card numbers; and especially your social Security number; on the phone or online, unless you initiate the call and know the person or organization you’re dealing with. Don’t give that information to any stranger. In general, it is only required for medical providers, banks, mortgages and credit card companies.
  9. Don't fill out the "win a vacation" and other promotions you see in stores and shopping malls.  That will just get you on a junk mailing list and guarantee calls from persistent, high-pressure salesmen.
  10. Don’t pre-print your driver’s license, telephone or Social Security numbers on your checks. And in states that want to use your social security number as your driver's license number, insist on another method - most allow it.
  11. Report lost or stolen checks immediately. The bank can block payment on the check numbers that are missing. Also, review new checks you receive, to make sure none has been stolen in transit.
  12. Store new and cancelled checks, credit card statements, medical bills, and anything with confidential information in a safe place and shred them when you are done with them.
  13. Guard your Personal Identification Numbers (PINs) for your ATM and credit cards, and don’t write on or keep your PINs with your cards. You should also guard your ATM and credit card receipts. Thieves can use them to access your accounts.
  14. Be creative in selecting Personal Identification Numbers for your ATM and credit cards, and passwords that enable you to access other accounts.  Don’t use birth dates, part of your Social Security Number or driver’s  license number, address, or children or spouse names. Remember: If someone has stolen your identity, he or she probably has some or all of this information.
  15. Use a good anti-virus software, anti-adware software and a hardware firewall on your computer, and keep them up to date. You need all three. Almost all modern Routers have a hardware firewall built in.  
  16. Don’t put outgoing mail in or on your mailbox. Drop it into a secure, official Postal Service collection box. Thieves may use your mail to steal your identity.
  17. If regular bills fail to reach you, call the company to find out why. Someone may have filed a false change-of-address notice to divert your information to his or her address.
  18. If your bills include suspicious charges, don’t ignore them. Instead, investigate immediately to head off any possible fraud before it occurs.
  19. Check your credit report regularly.  Federal law allows you to obtain one from credit report from each of the 3 major credit reporting agencies per year
  20. NEVER buy anything from a company that sends you spam. Don't even visit their sites or ask for more information. It is like feeding a stray cat.  Give it one morsel of food, and it will be there all the time (and that may be fine with cats, but NO one wants spammers at the doorstep!).  Remember, since they send out millions of spam emails, they only need a tiny fraction of responses to be profitable.  And if that doesn't convince you, consider this: the vast majority of spam "offers" are in fact scams!
  21. Set up filters in your email program.  Outlook does this quite easily. When you open an email and realize that it is spam, just click on Actions then Create Rule, then select an appropriate action, such as "from" then click "Move e-mail to folder" and select the "Deleted Items" folder. That's it!  You'll never receive email from that particular address or subject again! 
  22. If you have a website, do not post your address in the HTML "mail-to" format, otherwise you will be spammed, since address-harvesting spiders (programs) extract your email address from the website and add it to the spammer's lists.  Instead use feedback forms through PHP, ASP, or JSP that hide the email address, OR post the email address as a GIF (image file).
  23. Finally, if it seems too good to be true... IT IS! No one is going to send you a pile of money from a dead Nigerian president, no lottery is going to make you a winner from a "randomly selected from a database of email addresses".  Multi-level marketing IS A SCAM, ALL psychics are nothing more than conmen, and you cannot make big money from "passive residual income in a few hours of your spare time each day". And there is no Easter Bunny.

 

Article taken in part from Consumer Fraud Reporting
http://www.consumerfraudreporting.org/defend_yourself.php

All text © Copyright Benivia, LLC 2011  

Permission is given to link to any public page on http://www.ConsumerFraudReporting.org

 

 

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Information and recommendations are compiled from sources believed to be reliable. The Sheriff’s Office  makes no guarantee as to and assumes no responsibility for the correctness, sufficiency or completeness of such information or recommendations. Other or additional safety measures may be required under particular circumstances. Last Revised: 7/14