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Fraud Target: Senior Citizens

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

Six Defendants Charged in Separate Fraud Schemes to Obtain $2.7 Million in Mortgage, Student Aid, Bank, and Small Business Loans

http://www.fbi.gov/chicago/press-releases/2014/six-defendants-charged-in-separate-fraud-schemes-to-obtain-2.7-million-in-mortgage-student-aid-bank-and-small-business-loans

Woman Guilty of Obstructing Investigation of $1.8 Million Fraud Against Failed La Jolla Bank

http://www.fbi.gov/sandiego/press-releases/2014/woman-guilty-of-obstructing-investigation-of-1.8-million-fraud-against-failed-la-jolla-bank

FBI - Looking for Love?

Beware of Online Dating Scams:

http://www.fbi.gov/news/stories/2012/february/dating-scams_021412

FBI — Jury Duty Scam

http://www.fbi.gov/news/stories/2006/june/jury_scam060206

Jun 2, 2006 ... The phone rings, you pick it up, and the caller identifies himself as an officer of
the court. He says you failed to report for jury duty and that a ...

Published on: 2006/06/02, Last Modified on: 2010/10/12



Tip of the Week: Unexpected IRS refund

If you receive an unsolicited email that appears to be from the IRS requesting that you file a "tax refund request," do not fall victim to this identity theft scheme.

Numerous people are receiving unsolicited email informing them that a $9,390.55 IRS tax refund is due to them if they complete a tax refund request form. The email code will be forged to appear as if it originated from a trusted source, usually the IRS or an IRS tax preparer, but viewing the "message header" or "message source" will reveal its origin to be something else, and the link will not lead to a trusted domain, but one controlled by identity theft criminals.

If you file a tax return and a refund is due, you will automatically receive your refund. You will never be contacted by the IRS, and there is no tax refund request form. Never disclose personal information to any unsolicited inquiry, as compelling as the story may be.

If you have questions or concerns about any IRS tax refund you may have due, you should access the official IRS "Where's My Refund" online application at the following destination: http://www.irs.gov/individuals/article/0,,id=96596,00.html.



The California Dept. of Real Estate recently issued the following

practical advice to prevent consumers from falling victim to a scam:

• Never pay an upfront fee for loan modification services. Such fees are illegal.
• Watch out for promises of guaranteed success. No one can promise that a loan modification will be successful.
• Ask questions, get referrals from people you know and trust, and always remember the following: If it seems too good to be true, it probably is not true.
• Contact a HUD-approved counseling agency that can provide loan modification services for free.
• If you have been a victim of a loan modification scam, report it to the DRE, the FTC and the Attorney General.

Online mortgage modification scams

The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) recently announced that it has shut down 85 alleged online mortgage modification scams that prey on vulnerable homeowners through Web banners and other Web advertisements.

SIGTARP investigates mortgage modification schemes in which companies charge struggling homeowners a fee in exchange for false promises of lowering the homeowner’s mortgage through TARP’s housing program known as the Home Affordable Modification Program (HAMP). Google, in cooperation with an ongoing criminal SIGTARP investigation of these scams, has suspended advertising relationships with more than 500 Internet advertisers and agents associated with the 85 alleged online mortgage fraud schemes and related deceptive advertising.

Beware of “click-jacking”

Federal authorities have charged seven men with infecting millions of computers with a virus-like program that tricked users’ Web browsers into navigating to phony pages stocked with ads, earning the defendants as much as $14 million.

This type of online fraud is known as click-jacking, which waits for users to click on links to popular websites and then quietly redirected their browsers to similar-looking sites larded with online ads -- ads that allegedly earned the defendants cash each time they were displayed.

FTC charges credit repair operators

The Federal Trade Commission has charged the operators of a credit repair company with making false statements to credit bureaus about information in consumers’ credit reports, and illegally collecting fees from consumers before performing any services.

 According to the FTC’s complaint RMCN Credit Services Inc. and the married couple who own it, Doug and Julie Parker, advertised a six-month program to improve consumers’ credit reports. The FTC alleges that the defendants made false statements to credit bureaus disputing the accuracy of negative information in consumers’ credit reports. In letters to credit bureaus, which RMCN did not show to consumers, the firm typically disputed all negative information in credit reports, regardless of the information’s accuracy. RMCN continued to send these deceptive dispute letters to credit bureaus, even after receiving detailed billing histories verifying the accuracy of the information, or signed contracts from creditors proving the validity of the accounts.

 The complaint alleges that RMCN misrepresented to consumers that federal law allows the company to dispute accurate credit report information, and that credit bureaus must remove information from credit reports unless they can prove it is accurate. In the company’s words, credit bureaus must “prove it or remove it.” RMCN charged a retainer fee of up to $2,000 before providing any service.

 The defendants are charged with violating the Credit Repair Organizations Act by making untrue or misleading statements to credit bureaus about consumers’ credit worthiness, and by charging fees for credit repair services before they were fully performed.

Fraud Findings Statistics

 Based on Fannie Mae loan reviews completed through the end of August 2011

Fannie Mae mortgage fraud report
Fannie Mae’s September mortgage fraud report, which is based on Fannie Mae loan reviews through the end of August, shows the following misrepresentations by type:

Occupancy: 18%
Income: 24%
Assets: 6%
Property: 14%
Value: 1%
Liabilities: 27%
SNN: 7%
Credit: 3%

https://www.efanniemae.com/utility/legal/antifraud.jsp?from=hp

09/19/11

Reverse staging

Fannie Mae recently reported that a new type of short sale fraud its seeing is reverse staging – a homeowner trashing his own home to lower the value and appraisal price.

A spokesperson with Fannie Mae said that after an owner destroys his house, a buyer with whom the owner is colluding comes in with a low-ball offer, buys it, fixes it back up, and then flips it for its real market value.

02/17/11

Wise use of Wi-Fi networks

While convenient, public Wi-Fi networks often are not secure.  When using wireless networks, it’s best to send only personal information that is encrypted – either by an encrypted website or a secure network.  Encryption scrambles information sent over the Internet into a code so that it’s not accessed by others.

01/29/11

Mortgage elimination scam

Authorities have been seeing more mortgage elimination scams recently.  Con artists are targeting Latinos whose homes are in foreclosure, asking victims to pay a processing fee of $1,000 to $3,000.  The victims are told they can get a new mortgage for 25 percent of what their current mortgage is. The criminals file a new conveyance, claiming that the loan has been paid off.  Of course, the legal lender continues with its foreclosure proceedings and the borrower loses his or her home along with the fees.

More info.

01/29/11

FBI investigates courthouse auction bids

The FBI is investigating whether some real estate speculators are illegally rigging bids for foreclosure auctions.  Bid-rigging violates the Sherman Antitrust Act and can carry a maximum penalty of 10 years in prison and a $1 million fine.  The maximum fine can be increased to twice the violator’s gain or twice the victim’s loss.

The FBI has been conducting interviews and executing search warrants throughout the San Francisco Bay Area to investigate whether some auction participants allegedly pay others to refrain from bidding on certain properties to keep their prices lows. 

The FBI encourages anyone with knowledge of anti-competitive practices at foreclosure auctions to call its tip line at (415) 553-7400.

More info. 

01/29/11

Beware of e-mails containing malware

Recently, more than $150,000 was stolen from a U.S. business via an unauthorized wire transfer after the business received an e-mail that contained malware.  The malware was embedded in an e-mail response to a job posting the business placed on an employment website and allowed the attacker to obtain the online banking credentials of the person who was authorized to conduct financial transactions within the company.

The FBI recommends that e-mail recipients remain vigilant in opening e-mails with attachments.  Running a virus scan prior to opening any e-mail attachments may provide an added layer of security against this type of attack.  The FBI also recommends that businesses use separate computer systems to conduct financial transactions.

More info.  

01/21/11

Time-share resellers

According to the Better Business Bureau, the National Consumers League and ConsumerAffairs.com, deceptive resellers charge several thousand dollars to list a timeshare property; after the owner pays, he never hears from the reseller again. Complaints about the fraud have increased 40 percent this year.  

01/21/11

Fraudulent FDIC e-mails

The Federal Deposit Insurance Corp. (FDIC) has received numerous reports from consumers who received an e-mail that has the appearance of being sent by the FDIC.  The e-mail informs the recipient that “in cooperation with the Dept. of Homeland Security, federal, state and local governments…the FDIC has withdrawn deposit insurance from the recipient’s account “due to account activity that violates the Patriot Act.”

This e-mail is fraudulent and was not sent by the FDIC.  It is an attempt to obtain personal information from consumers.  Consumers should not access the link provided with the body of the e-mail and should not provide any personal information through this e-mail.  Report any attempts to obtain this information by sending an e-mail to the FDIC at alert@fdic.gov.

01/11/11

DRE warning on false and misleading designations

The DRE recently issued another consumer alert in response to an increase in the use of questionable and possibly misleading terms such as "expert", "certified", and "specialist" in the marketing and advertising of assistance to anxious homeowners in connection with their home loans and foreclosure rescue services and short sales.

01/05/11

Central Valley counties fail to report fraud

Although state law requires the reporting of fraud prosecutions to the Legislative Analysts Office by participating counties, the LAO says Kern, Kings, Madera, San Joaquin, Yolo and Yuba counties made no report.

More info 

12/01/10

The IC3 receives a high volume of complaints from victims of payday loan telephone collection scams. In these scams, a caller claims that the victim is delinquent in a payday loan and must repay the loan to avoid legal consequences. The callers purport to be representatives of the FBI, Federal Legislative Department, various law firms, or other legitimate-sounding agencies. They claim to be collecting debts for companies such as United Cash Advance, U.S. Cash Advance, U.S. Cash Net, and other Internet check cashing services.

One of the most insidious aspects of this scam is that the callers have accurate information about the victims, including Social Security numbers, dates of birth, addresses, employer information, bank account numbers, and names and telephone numbers of relatives and friends. The method by which the fraudsters obtained the personal information is unclear, but victims often relay that they had completed online applications for other loans or credit cards before the calls began.

The fraudsters relentlessly call the victim’s home, cell phone, and place of employment. They refuse to provide to the victims any details of the alleged payday loans and become abusive when questioned. The callers threaten victims with legal actions, arrests, and in some cases physical violence if they refuse to pay. In many cases, the callers even resort to harassment of the victim’s relatives, friends, and employers. 

Some fraudsters instruct victims to fax a statement agreeing to pay a certain dollar amount, on a specific date, via prepaid visa card. The statement further declares that the victim would never dispute the debt. 

These telephone calls are an attempt to obtain payment by instilling fear in the victims. Do not follow the instructions of the caller.

If you receive telephone calls such as these, you should:

• Contact your banking institutions;
• Contact the three major credit bureaus and request an alert be put on your file;
• Contact your local law enforcement agencies if you feel you are in immediate danger;
• File a complaint at www.IC3.gov.

12/14/10

Updated mortgage fraud report 

CoreLogic has updated its 2010 Mortgage Fraud Trends Report, which states that mortgage fraud increased by more than 20 percent since the fraud rates reached their lowest point in early 2009.  The increase in reported fraud by lenders is attributed to fraudsters migrating toward higher risk, high volume loan programs, including those offered by the Fair Housing Administration (FHA), Home Affordable Refinance Program (HARP), as well as short sales and real estate owned (REO) sales.

12/12/10

Top 10 cities with mortgage fraud
Business Insider has compiled a list of the top 10 cities being flooded with mortgage fraud.

More info

11/29/10

DRE warns of imposter landlords

The California DRE issued a consumer alert this week warning renters to be on the lookout for fraudulent landlords.  The imposters often are able to convince potential renters to pay money, which may include a first and last month’s rent and a security deposit, as well as follow up rental payments, for a house that is not owned by the supposed landlord.

11/29/10

Nonprofit alerts homeowners to fraud resources

Information about individual foreclosures is publicly available, with anyone able to access information such as the owner's name and address, and in some states, other sensitive information. This means that homeowners in foreclosure can become the target of mortgage loan scammers who seek to take advantage of their situation. The Homeownership Preservation Foundation, which provides information and financial education to guide consumers toward the path of sustainable homeownership, is alerting homeowners to resources that will help them avoid being victimized by unscrupulous companies conducting mortgage loan modification and foreclosure rescue scams.

More info.

11/29/10 

"CASH FOR KEYS" – INFORMATION FOR CONSUMERS AND DRE LICENSEES

The challenge to successfully market REO properties has given rise to a growing practice known as "cash for keys". The Department of Real Estate ("DRE") has been receiving questions and complaints from consumers about "cash for keys" solicitations. This article is intended to provide some guidance for consumers and licensees when involved in a "Cash for Keys" program to minimize any misunderstandings or violations of the law.

When a lender takes a home back as a result of a foreclosure action, it becomes responsible for that property. The longer the lender has to wait to sell the property, and the more money it has to spend to repair damage to and/or to maintain the property, the greater will be its ultimate loss. The consequences of foreclosure and the looming legal eviction action affects the prior resident owner of the foreclosed property and/or the tenant(s) living in the property the same way – they must, unless there is an existing landlord-tenant rental or lease agreement which survives the foreclosure by law, or a written agreement with the new owner/lender to maintain or modify the tenancy, vacate the property in a relatively short period of time.

If the lender can make a deal with a tenant to pay for the tenant’s security and utility deposits, moving expenses, and maybe even temporary living expenses, and perhaps a bonus for a quick moving date, it would be in the lender’s interest to do so to avoid the inevitable minimum 3 to 6 month delay associated with formal legal eviction proceedings. In the many circumstances, the lender would most certainly prefer that the tenant agree to vacate the property within a certain number of days, leave the property in "broom-swept condition", remove all debris from the interior and the yard, leave all fixtures and landscaping intact, and turn over the keys and garage door openers.

Generally, the amount offered to tenants vary and is usually negotiable. Anecdotal reports from those who have had experience with "cash for keys" programs report that $500 is generally the minimum and $5,000 the maximum amount offered to tenants for their keys.

The amount an owner is willing to pay for a tenant’s keys depends on several factors, including the value and physical condition of the property, and the plan(s) the lender has for the property. Other factors include the amount of time the tenant needs to move out.

As recently as early 2008, in the absence of a written lease agreement requiring greater notice, California law required that an owner provide only a 30-day notice to a tenant to vacate the property for any reason (other than the failure to pay rent, which required a 3-day notice). However, recent legislation has changed the rules.

Signed as an urgency measure in 2008, Senate Bill 1137 gives tenants at least 60 days after a foreclosure before they can be asked to vacate the property. The provisions of SB 1137 are due to sunset (be repealed) on January 1, 2013. To review a copy of the bill and get more details, please visit www.leginfo.ca.gov.

Federal legislation was enacted effective May 20, 2009, requiring property owners who have taken a residential property by foreclosure, to give their tenants at least a 90 day notice to vacate the property before beginning the eviction process. That federal law is applicable nationwide, and it is known as "Protecting Tenants At Foreclosure Act". The law is found at Title 7 US Code section 701 ("the Act"). See http://thomas.loc.gov.

The Act provides that if a tenant is renting under a lease entered into before the notice of foreclosure was communicated to the tenant, the tenant may remain in the property until the lease ends, unless the owner sells the property to a purchaser who will occupy the property as his primary residence. In that case, the owner may properly give the tenant a 90day notice to vacate.

While the Act provides greater protection to tenants than State law, local law may provide even more protection. If a particular property is subject to local "rent control" or "housing assistance" laws, or so-called "just cause for eviction" ordinances, those laws may provide even greater protection than the Act itself. As an example, even the Act itself provides that the owner of a residential property which is subject to a "housing assistance contract", and who has a lease with a tenant in that property, is subject to any additional protections in the housing assistance contract (this typically applies to "Section 8" properties).

Finally, there is a bill pending in the California legislature that would require tenants be told of their rights when the property they occupy is foreclosed. Senate Bill 1149 requires that tenants who are living in foreclosed homes be given notice of their rights and responsibilities under these state and federal laws by requiring a cover sheet be attached to any eviction notice that is served within one year of a foreclosure sale. The cover sheet would delineate the laws and rights a tenant may have in cases where the property he or she occupies is foreclosed upon. The bill also

seeks to help protect tenants who would otherwise have a negative mark on their rental history by prohibiting the release of court records in a foreclosure-related eviction unless the plaintiff landlord prevails. Whether the bill is signed into law will not be known until October 2010.

Tenants and resident owners of foreclosed properties must take a significant amount of personal responsibility in this matter. They should become acquainted with federal and State law concerning foreclosures and tenant evictions, and also with local laws which apply to their particular situation. For example, in the City of Los Angeles, beginning December 17, 2008, tenants who are current in their rent payments can not be evicted because of a foreclosure. Many cities in California, including Santa Monica, West Hollywood, Beverly Hills, Oakland, and Berkeley, are subject to local "rent control" and/or "just cause for eviction" ordinances, which may provide even greater protections. Without a working knowledge of applicable local law, a tenant is at a distinct disadvantage.

Tenants and resident owners should make sure that any "cash for keys" offer is coming from the new owner of the property, which is often a lender or a government sponsored mortgage investor, such as Fannie Mae or Freddie Mac. Tenants and resident owners should insist on verifying the identification and authority of the person making the "cash for keys" offer. They must insist on receiving a written "cash for keys" agreement, and carefully read and understand that agreement. They should have a trusted and competent attorney, real estate licensee, family member or friend review the agreement and provide counsel concerning its duties and obligations.

Before signing the agreement, a resident owner should call his or her lender directly to confirm the authority of the person making the "cash for keys" offer. A tenant must be especially careful. The tenant should call his or her landlord and ask about the foreclosure and the identity and contact information for the new owner. It would not be unusual for the landlord to tell the tenant to continue to make rent payments directly to the landlord. That should not be done if the landlord is no longer the owner of the property. And finally, a tenant or resident owner should never hand the keys over unless the money is delivered. Cash is best. If paid by check, the tenant or resident owner should make certain the check is good and/or clears. If the keys are handed over, and the owner fails to pay the money, or if the owner’s check bounces, the written agreement should be sufficient to allow the tenant to prevail in a small claims action against the owner. But obtaining a judgment is far easier than collecting it. Without a written agreement, the chances of obtaining a judgment are substantially reduced.

There is no way to generalize and declare that a real estate license is, or is not, required to solicit "cash for keys". The particular facts of each transaction will determine the answer to that question.

A licensee who solicits a "cash for keys" deal should identify him or herself to the resident owner or tenant when requested to, and provide his or her DRE license number. A consumer may look on the DRE website (www.dre.ca.gov) and, on the "Home" tab, under the heading "Consumers", click on "License Status Check" to verify that person’s license status. Under that same heading, there is also a link to "How to File a Complaint". One who has been solicited by a DRE licensee is encouraged to file a complaint with DRE if the solicitor has not acted fairly and honestly in the "cash for keys" transaction, or if the solicitor has engaged in any other unlawful conduct.

It should go without saying that California real estate brokers or salespersons who engage in "cash for keys" negotiations with tenants must be aware of the federal, State and local laws relating to foreclosed properties, and the tenants’ rights with respect to their tenancies or leasehold interests. The old saying "ignorance of the law is no excuse" really does apply in this context.

It should also go without saying that DRE licensees who solicit a resident owner or tenant to accept a "cash for keys" proposal must act fairly and honestly with respect to the transaction. Dishonest behavior, misrepresentations, harassment, failures to disclose material information to a resident owner or tenant, including failing to advise the resident owner or tenant of his or her rights with respect to eviction (that the licensee has knowledge of) as a result of foreclosure, or negligence, could possibly lead to license disciplinary action. A licensee who hires unlicensed persons to solicit cash for keys deals can also be liable for the dishonesty, misrepresentations, harassment and/or negligence of his or her unlicensed agent.

A fair and equitable cash for keys agreement will mutually benefit both the new owner of the property and the resident former owner or tenant residing in the property.

For tenants, resident owners, and Department of Real Estate licensees, knowledge of the law concerning this subject is power – power to avoid problems that are just looking for place to happen.

For resident owners and tenants in foreclosed properties, your only real safety lies in your taking the responsibility to protect yourself. Get the agreement and all other communications in writing. Have someone you trust look the written documents over. Make sure the solicitor is authorized to act for the real owner of the property. And do not give up the keys before you get the cash.

10/29/10

Phony counseling or foreclosure rescue scams: The scam artist poses as a counselor and tells the homeowner he can negotiate a deal with the lender to save the house from foreclosure, but only if the homeowner pays an upfront fee.  The “counselor” may even tell the homeowner not to contact the lender, a lawyer, or another housing counselor and that he’ll handle all details. He also may insist the homeowner make all mortgage payments directly to him while he negotiates with the lender.

10/29/10

Federal law prohibits charging consumers until help is provided

New federal laws that went into effect Oct. 27, make it more difficult for debt-relief companies to victimize consumers. The new laws prohibit these companies from charging consumers until they've helped them reduce or change the terms of at least one debt.  Since December 2007, the Better Business Bureau has received more than 6,000 complaints from consumers about debt-relief companies. Typical complaints were that the companies charged fees to consumers burdened with debt, but failed to reduce or eliminate debts.

More info.

10/01/10

The DRE has published an article titled, "Short Sales--An Overview and Warning to Real Estate Licensees Re:  Fraud, and Legal and Ethical Minefields."  The DRE hopes to alert real estate licensees about short sale fraud and other legal and ethical issues.

09/21/10

HUD has created a list of six things REALTORS® should know (and should tell their clients) about avoiding loan scams.

09/14/10 

Since the start of the housing downturn, the number of Web sites and foreclosure-prevention companies claiming to offer help to struggling borrowers has greatly increased.  While some of the businesses are legitimate, others are fraudulent and offer services that consumers may be eligible to receive free of charge.

09/09/10

This month, Fannie Mae – the government-sponsored entity that helps set lending standards for most mortgages—started a Web site, KnowYourOptions.com.  The site contains elements distinguishing it from those aiming to prevent foreclosure.  All of the information on the site is available in Spanish or English.

09/01/10

Another helpful Web site for consumers is Hope LoanPort, which allows struggling homeowners and housing counselors to submit financial documents to mortgage companies and track the status of their efforts to avoid foreclosure. Hope LoanPort was created by Hope Now, a consortium of 12 mortgage companies and 250 counseling agencies.

08/21/10

The U.S. Dept. of Housing and Urban Development (HUD) recently announced it will launch multiple investigations into the lending practices of certain mortgage lenders to determine if they illegally denied families mortgages because the mother is pregnant or a family member is experiencing a short-term disability. The action follows a report published last week in the New York Times outlining the lending practices of some lenders which might violate the Fair Housing Act.

HUD's Federal Housing Administration (FHA) requires approved lenders to review a borrower's income to determine whether they can reasonably be expected to continue paying their mortgage for the first three years of the loan. FHA-insured lenders cannot, however, inquire about future maternity leave. If a borrower is on maternity or short-term disability leave at the time of closing, lenders must document the borrower's intent to return to work; that the borrower has the right to return to work; and that the borrower qualifies for the loan, taking into account any reduction of income due to their leave.

HUD also is reviewing Fannie Mae and Freddie Mac's underwriting guidelines to determine if they satisfy the Fair Housing Act, including income verification of persons taking parental or disability leave.

01/13/10

 The FBI today reminds Internet users who receive appeals to donate money in the aftermath of Tuesday’s earthquake in Haiti to apply a critical eye and do their due diligence before responding to those requests. Past tragedies and natural disasters have prompted individuals with criminal intent to solicit contributions purportedly for a charitable organization and/or a good cause.

Therefore, before making a donation of any kind, consumers should adhere to certain guidelines, to include the following:

• Do not respond to any unsolicited (spam) incoming e-mails, including clicking links contained within those messages.
• Be skeptical of individuals representing themselves as surviving victims or officials asking for donations via e-mail or social networking sites.
• Verify the legitimacy of nonprofit organizations by utilizing various Internet-based resources that may assist in confirming the group’s existence and its nonprofit status rather than following a purported link to the site.
• Be cautious of e-mails that claim to show pictures of the disaster areas in attached files because the files may contain viruses. Only open attachments from known senders.
• Make contributions directly to known organizations rather than relying on others to make the donation on your behalf to ensure contributions are received and used for intended purposes.
• Do not give your personal or financial information to anyone who solicits contributions: Providing such information may compromise your identity and make you vulnerable to identity theft.

01/20/10

The IC3 has been alerted to an increase in employment schemes pertaining to mystery/secret shopper positions. Many retail and service corporations hire evaluators to perform secret or random checks on themselves or their competitors, and fraudsters are capitalizing on this employment opportunity.

Victims have reported to the IC3 they were contacted via e-mail and U.S. mail to apply to be a mystery shopper. Applicants are asked to send a resume and are purportedly subject to an extensive background check before being accepted as a mystery shopper. The employees are sent a check with instructions to shop at a specified retailer for a specific length of time and spend a specific amount on merchandise from the store. The employees receive instructions to take note of the store's environment, color, payment procedures, gift items, and shopping/carrier bags and report back to the employer. The second evaluation is the ease and accuracy of wiring money from the retail location. The money to be wired is also included in the check sent to the employee. The remaining balance is the employee's payment for the completion of the assignment. After merchandise is purchased and money is wired, the employees are advised by the bank the check cashed was counterfeit, and they are responsible for the money lost in addition to bank fees incurred.

In other versions of the scheme, applicants are requested to provide bank account information to have money directly deposited into their accounts. The fraudster then has acquired access to these victims' accounts and can withdraw money, which makes the applicant a victim of identity theft.

Tips

Here are some tips you can use to avoid becoming a victim of employment schemes associated with mystery/secret shopping:

• Do not respond to unsolicited (spam) e-mail.
• Do not click on links contained within an unsolicited e-mail.
• Be cautious of e-mail claiming to contain pictures in attached files, as the files may contain viruses. Only open attachments from known senders. Virus scan all attachments, if possible.
• Avoid filling out forms contained in e-mail messages that ask for personal information.
• Always compare the link in the e-mail to the link you are actually directed to and determine if they match and will lead you to a legitimate site.
• There are legitimate mystery/secret shopper programs available. Research the legitimacy on companies hiring mystery shoppers. Legitimate companies will not charge an application fee and will accept applications online.
• No legitimate mystery/secret shopper program will send payment in advance and ask the employee to send a portion of it back.

01/21/10

The FBI continues to receive reports of counterfeit check schemes targeting U.S. law firms. As previously reported, scammers send e-mails to lawyers, claiming to be overseas and seeking legal representation to collect delinquent payments from third parties in the U.S. The law firm receives a retainer agreement, invoices reflecting the amount owed, and a check payable to the law firm. The firm is instructed to extract the retainer fee, including any other fees associated with the transaction, and wire the remaining funds to banks in Korea, China, Ireland, or Canada. By the time the check is determined to be counterfeit, the funds have already been wired overseas.

In a new twist, the fraudulent client seeking legal representation is an ex-wife "on assignment" in an Asian country, and she claims to be pursuing a collection of divorce settlement monies from her ex-husband in the U.S. The law firm agrees to represent the ex-wife, sends an e-mail to the ex-husband, and receives a "certified" check for the settlement via delivery service. The ex-wife instructs the firm to wire the funds, less the retainer fee, to an overseas bank account. When the scam is executed successfully, the law firm wires the money before discovering the check is counterfeit.

All Internet users need to be cautious when they receive unsolicited e-mails. Law firms are advised to conduct as much due diligence as possible before engaging in transactions with parties who are handling their business solely via e-mail, particularly those parties claiming to reside overseas.

03/12/10

Individuals need to be cautious when posting rental properties and real estate on-line. The IC3 continues to receive numerous complaints from individuals who have fallen victim to scams involving rentals of apartments and houses, as well as postings of real estate online.

Rental scams occur when the victim has rental property advertised and is contacted by an interested party. Once the rental price is agreed-upon, the scammer forwards a check for the deposit on the rental property to the victim. The check is to cover housing expenses and is, either written in excess of the amount required, with the scammer asking for the remainder to be remitted back, or the check is written for the correct amount, but the scammer backs out of the rental agreement and asks for a refund. Since the banks do not usually place a hold on the funds, the victim has immediate access to them and believes the check has cleared. In the end, the check is found to be counterfeit and the victim is held responsible by the bank for all losses.

Another type of scam involves real estate that is posted via classified advertisement websites. The scammer duplicates postings from legitimate real estate websites and reposts these ads, after altering them. Often, the scammers use the broker’s real name to create a fake e-mail, which gives the fraud more legitimacy. When the victim sends an e-mail through the classified advertisement website inquiring about the home, they receive a response from someone claiming to be the owner. The “owner” claims he and his wife are currently on missionary work in a foreign country. Therefore, he needs someone to rent their home while they are away. If the victim is interested in renting the home, they are asked to send money to the owner in the foreign country.

06/21/10

The FBI Newark Division released a warning to consumers concerning a new scheme using telecommunications denial-of-service (TDoS) attacks.

The FBI determined fraudsters compromised victim accounts and contacted financial institutions to change the victim profile information (i.e., e-mail addresses, telephone numbers, and bank account numbers).

The TDoS attacks used automated dialing programs and multiple accounts to overwhelm victims’ cell phones and land lines with thousands of calls. When victims answered the calls they heard dead air (nothing on the other end), an innocuous recorded message, advertisement, or a telephone sex menu. Calls were typically short in duration but so numerous that victims changed their phone numbers to terminate the attack.

These TDoS attacks were used as a diversion to prevent financial and brokerage institutions from verifying victim account changes and transactions. Fraudsters were afforded adequate time to transfer funds from victim brokerage and financial online accounts.

Protection from TDoS attacks and other types of fraud requires consumers to be vigilant and proactive. In Newark’s Public Service Announcement (PSA), they recommend the following guidelines for consumers to protect themselves:

• Implement security measures for all financial accounts by placing fraud alerts with the major credit bureaus if you believe they were targeted by a TDoS attack or other forms of fraud.
• Use strong passwords for all financial accounts and change them regularly.
• Obtain and review your annual credit report for fraudulent activity.

If you were a target of a TDoS attack, immediately contact your financial institutions, notify your telephone provider, and promptly report it to the IC3 website at www.ic3.gov. The IC3 complaint database links complaints to assist in referrals to the appropriate law enforcement agency for case consideration. The complaint information is also used to identity emerging trends and patterns.

07/01/10

The IC3 continues to receive reports of individuals' e-mail or social networking accounts being compromised and used in a social engineering scam to swindle consumers out of thousands of dollars. Portraying to be the victim, the hacker uses the victim's account to send a notice to their contacts. The notice claims the victim is in immediate need of money due to being robbed of their credit cards, passport, money, and cell phone; leaving them stranded in London or some other location. Some claim they only have a few days to pay their hotel bill and promise to reimburse upon their return home. A sense of urgency to help their friend/contact may cause the recipient to fail to validate the claim, increasing the likelihood of them falling for this scam.

If you receive a similar notice and are not sure it is a scam, you should always verify the information before sending any money.

10/20/10

Cyber criminals are targeting the financial accounts of owners and employees of small and medium sized businesses, resulting in significant business disruption and substantial monetary losses due to fraudulent transfers from these accounts. Often these funds may not be recovered. More

10/20/10

Consumers continue to lose money from work-from-home scams that assist cyber criminals move stolen funds. Worse yet, due to their deliberate or unknowing participation in the scams, these individuals may face criminal charges. Work-from-home scam victims are often recruited by organized cyber criminals through newspaper ads, online employment services, unsolicited emails or “spam” ,one and social networking sites advertising work-from-home opportunities. Once recruited, however, rather than becoming an employee of a legitimate business, the consumer is actually a “mule” for cyber criminals who use the consumer’s or other victim's accounts to steal and launder money. In addition, the consumer’s own identity or account may be compromised by the cyber criminals.  More

Holiday Shopping Tips

11/15/2010—This holiday season, the FBI reminds shoppers that cyber criminals aggressively create new ways to steal money and personal information. Scammers use many techniques to fool potential victims, including conducting fraudulent auction sales, reshipping merchandise purchased with stolen credit cards, and selling fraudulent or stolen gift cards through auction sites at discounted prices.
 
Fraudulent Classified Ads and Auction Sales
 
Internet criminals post classified ads and auctions for products they do not have and make the scam work by using stolen credit cards. Fraudsters receive an order from a victim, charge the victim’s credit card for the amount of the order, then use a separate, stolen credit card for the actual purchase. They pocket the purchase price obtained from the victim’s credit card and have the merchant ship the item directly to the victim. Consequently, an item purchased from an online auction but received directly from the merchant is a strong indication of fraud. Victims of such a scam not only lose the money paid to the fraudster, but may be liable for receiving stolen goods.
 
Shoppers may help avoid these scams by using caution and not providing financial information directly to the seller, as fraudulent sellers will use this information to purchase items for their schemes. Always use a legitimate payment service to ensure a safe, legitimate purchase.
 
As for product delivery, fraudsters posing as legitimate delivery services offer reduced or free shipping to customers through auction sites. They perpetuate this scam by providing fake shipping labels to the victim. The fraudsters do not pay for delivery of the packages; therefore, delivery service providers intercept the packages for nonpayment and the victim loses the money paid for the purchase of the product.
 
Diligently check each seller’s rating and feedback along with their number of sales and the dates on which feedback was posted. Be wary of a seller with 100 percent positive feedback, with a low total number of feedback postings, or with all feedback posted around the same date and time. 
 
Gift Card Scam
 
Be careful when purchasing gift cards through auction sites or classified ads. It is safest to purchase gift cards directly from the merchant or retail store. If the gift card merchant discovers that your card is fraudulent, the merchant will deactivate the gift card and refuse to honor it for purchases. Victims of this scam lose the money paid for the gift card purchase.
 
Phishing and Smishing Schemes
 
In phishing schemes, a fraudster poses as a legitimate entity and uses e-mail and scam websites to obtain victims’ personal information, such as account numbers, user names, passwords, etc. Smishing is the act of sending fraudulent text messages to bait a victim into revealing personal information.
 
Be leery of e-mails or text messages that indicate a problem or question regarding your financial accounts. In this scam, fraudsters direct victims to follow a link or call a number to update an account or correct a purported problem. The link directs the victim to a fraudulent website or message that appears legitimate. Instead, the site allows the fraudster to steal any personal information the victim provides.
 
Current smishing schemes involve fraudsters calling victims’ cell phones offering to lower the interest rates for credit cards the victims do not even possess. If a victim asserts that they do not own the credit card, the caller hangs up. These fraudsters call from TRAC cell phones that do not have voicemail, or the phone provides a constant busy signal when called, rendering these calls virtually untraceable.
 
Another scam involves fraudsters directing victims, via e-mail, to a spoofed website. A spoofed website is a fake site that misleads the victim into providing personal information, which is routed to the scammer’s computer.
 
Phishing schemes related to deliveries are also rampant. Legitimate delivery service providers neither e-mail shippers regarding scheduled deliveries nor state when a package is intercepted or being temporarily held. Consequently, e-mails informing of such delivery issues are phishing scams that can lead to personal information breaches and financial losses. 
 
Tips
 
Here are some tips you can use to avoid becoming a victim of cyber fraud:
 

• Do not respond to unsolicited (spam) e-mail.

• Do not click on links contained within an unsolicited e-mail.

• Be cautious of e-mail claiming to contain pictures in attached files, as the files may contain viruses. Only open attachments from known senders. Scan the attachments for viruses if possible.

• Avoid filling out forms contained in e-mail messages that ask for personal information.

• Always compare the link in the e-mail with the link to which you are directed and determine if they match and will lead you to a legitimate site.

• Log directly onto the official website for the business identified in the e-mail, instead of “linking” to it from an unsolicited e-mail. If the e-mail appears to be from your bank, credit card issuer, or other company you deal with frequently, your statements or official correspondence from the business will provide the proper contact information.

• Contact the actual business that supposedly sent the e-mail to verify if the e-mail is genuine.

• If you are asked to act quickly, or there is an emergency, it may be a scam. Fraudsters create a sense of urgency to get you to act quickly.

• Verify any requests for personal information from any business or financial institution by contacting them using the main contact information.

• Remember if it looks too good to be true, it probably is.

11/29/2010

The IC3 continues to receive reports of letters and e-mails being distributed pursuant to prize sweepstakes or lottery schemes. These schemes use counterfeit checks that bear legitimate-looking logos of various financial institutions to fool victims into sending money to the fraudsters.
 
Fraudsters tell victims they won a sweepstakes or lottery, but to receive a lump sum payout, they must pay the taxes and processing fees upfront. Fraudsters direct individuals to call a telephone number to initiate a letter of instructions. The letter alleges that the victim may elect to take an advance on the winnings to make the required upfront payment. The letter includes a check in the amount of the alleged taxes and fees, along with processing instructions. Ultimately, victims believe they are using the advance to make the required upfront payment, but in reality they are falling prey to the scheme.

The victim deposits the check into their own bank, which credits the account for the amount of the check before the check clears. The victim immediately withdraws the money and wires it to the fraudsters. Afterwards, the check proves to be counterfeit and the bank pulls the respective funds from the victim’s account, leaving the victim liable for the amount of the counterfeit check plus any additional fees the bank may charge.

Persons may fall victim to this scheme due to the allure of easy money and the apparent legitimacy of the check the fraudsters include in the letter of instruction. The alleged cash prizes and locations of the financial institutions vary.

Tips to avoid being scammed:

• A federal statute prohibits mailing lottery tickets, advertisements, or payments to purchase tickets in a foreign lottery.

• Be leery if you do not remember entering a lottery or sweepstakes.

• Beware of lotteries or sweepstakes that charge a fee prior to delivering your prize.

• Be wary of demands to send additional money as a requirement to be eligible for future winnings.