CONSUMER ALERT: Internet Crime Report

November 14, 2013



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Internet Crime Report 


Grand Rapids, MI - May 15, 2013

The Internet Crime Complaint Center (IC3) released a report this week detailing the top internet and phone based criminal activities in the United States. BBB is shining a light on this report as a reminder that continual awareness, education, and vigilance is required to avoid being the victim of fraud. 


Auto Fraud: Vehicles are promoted for sale on online platforms, often below market value. The crooks claim they must sell the vehicles quickly because they are relocating for work, being deployed by the military, or have a tragic family circumstance and are in need of money.The criminals refuse to meet in person or allow inspection of the vehicles prior to the sale.  The criminal instructs the victim to wire full or partial payment to a third-party agent via a wire transfer service, and to fax the payment receipt to the seller as proof of payment. The criminal pockets the money but does not deliver a vehicle. In a new twist, the criminals have attempted to pose as dealers instead of individuals selling a single car. This allows them to advertise multiple vehicles for sale at one time on certain platforms, potentially exposing more victims to the scam.


Rental ScamsCriminals search websites that list homes for sale and take information from legitimate ads and post it with their own e-mail addresses on Craigslist® (without Craigslist's consent or knowledge) under the housing rentals category. To sweeten the pot, the houses are almost always listed with below-market rental rates. An interested party will contact the "homeowner" via e-mail, and usually explain that he or she had to leave the United States quickly because of some missionary or contract work in Africa. Victims are usually instructed to send money overseas-enough to cover the first and last month's rent-via a wire transfer service (scammers often believe money cannot be traced once it gets picked up on the other end). Renters might also be asked to fill out credit applications asking for personal information like credit history, Social Security numbers and work history. The scammers then use this information to commit identity theft.


Scareware/Ransomware: Victims reported they received pop-up messages alerting them that their computers were infected with numerous viruses. The pop-ups, known as scareware or fake or rogue anti-virus software, cannot easily be closed by clicking  "close" or the "X" button. The scareware baited users into purchasing software that would allegedly remove viruses from their computers. If the users clicked on the pop-ups to purchase the software, forms to collect payment information appeared and the users were charged for the bogus products.  A more malicious version of ransomware freezes computers and warns of a violation of U.S. federal law. To intimidate the user further, the message declares the user's IP address was identified as visiting child pornography and other illegal content. The user is instructed to pay a fine to the U.S. Department of Justice using prepaid money card services in order to unlock the computer. The malware continued to operate on the compromised computer and could be used to commit online banking and credit card fraud.


Payday Loan: The payday loan scam involves victims receiving harassing telephone calls from individuals claiming they are delinquent in payments. The callers purport to be representatives of federal government agencies, various law firms and other legitimate sounding agencies. The callers often have accurate information associated with the victims, including Social Security number, date of birth, address, employer information, bank account numbers, and more. The callers claim to be collectors for debt-collecting companies. The fraudsters are relentless in the number of calls made to the victims' homes, cell phones and places of employment. The fraudsters threaten the victims with legal actions, arrests, and in some cases, physical violence if they refuse to pay. The fraudsters asked some victims to fax a statement agreeing to pay a specified amount via a prepaid money card. It also stated the victim would never dispute the debt.


The Grandparent Scam: A telephone scam targeting grandparents, and appropriately named "The Grandparent Scam," has continued to resurface over the years. The scam involves fraudsters calling elderly individuals claiming to be a grandson or granddaughter or other young relative in a legal or financial crisis. The crises generally involve claims of being arrested or in a car accident in another country. The callers create a sense of urgency and make a desperate plea for money, begging the grandparents not to tell the parents while often crying to help prevent the potential victims from discovering the scam. The callers also impersonated third parties, such as an attorney or an official, like a U.S. Embassy representative. Once the potential victims appear to believe the caller, they are provided instructions to wire money to a specified individual, often referred to as a bail bondsman, in order for their grandchild to be released by foreign law enforcement.  Investigations have determined potential victims were identified via mass-produced lead lists that target specific demographics. Complaints reported the callers were from Canada, the United States, Mexico, Haiti, Guatemala, Peru and the Dominican Republic. The callers used telephone numbers generated by free apps, so the bogus telephone number appears on the recipient's caller ID.


Timeshare Marketing Scams: Timeshare owners receive unexpected or uninvited telephone calls or e-mails from criminals posing as sales representatives for a timeshare resale company. The representative promises a quick sale, often within 60 to 90 days. Sales representatives pressured them by claiming there was a buyer waiting on the other line or even present in the office. Timeshare owners who agree to sell are told that they must pay an upfront fee to cover anything from listing and advertising fees to closing costs. Many victims have provided credit cards to pay the fees ranging from a few hundred to a few thousand dollars. Once the fee is paid, timeshare owners report that the company becomes evasive. In some cases, timeshare owners who have been defrauded by a timeshare sales scheme have been subsequently contacted by an unscrupulous timeshare fraud recovery company as well. The representative from the recovery company promises assistance in recovering money lost in the sales scam.


Loan Modification Scams: A loan modification scam often starts when a bogus loan company contacts a distraught homeowner and offers a loan modification plan via phone call, e-mail or mailing. A homeowner may reach out to these companies after seeing an ad online or in the newspaper. The loan modification typically includes a lower interest rate, an extension in the length of the loan term, a change in the type of loan or any combination of the three. As a part of this scam, the company instructs the homeowner to cease all communication with lenders and stop making mortgage payments until the loan modification process is complete. The homeowner is required to send money to cover "processing fees" and "closing costs" in order for the new loan to be processed and approved. After the homeowner sends the money, the loan company ceases communication, leaving the homeowner behind on actual mortgage payments.


Romance Scams: Perpetrators use the promise of love and romance to entice and manipulate online victims. A perpetrator scouts the Internet for victims, often finding them in chat rooms, on dating sites and even within social media networks. These individuals seduce victims with small gifts, poetry, claims of common interest or the promise of constant companionship. Once the scammers gain the trust of their victims, they request money, ask victims to receive packages and reship them overseas or seek other favors. These cyber criminals capitalize on the vulnerabilities of their victims. This crime not only affects the victims financially, there are emotional and mental implications as well. 



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