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The following are current and ongoing
Internet trends and schemes identified by the
Internet Crime Complaint Center along with the
description of the fraud or scheme:
AUCTION FRAUD
Auction fraud involves fraud attributable
to the misrepresentation of a product advertised for sale through an Internet
auction site or the non-delivery of products purchased through an Internet
auction site.
Consumers are strongly cautioned against entering into Internet transactions
with subjects exhibiting the following behavior:
The seller posts the auction as if he resides in the United States, then
responds to victims
with a congratulatory email stating he is outside the United States for business
reasons, family emergency, etc. Similarly, beware of sellers who post the
auction under one name, and ask for the funds to be transferred to another
individual.
The subject requests funds to be wired directly to him/her via Western Union,
MoneyGram, or bank-to-bank wire transfer. By using these services, the money is
virtually unrecoverable with no recourse for the victim.
Sellers acting as authorized dealers or factory representatives in countries
where there would be no such dealers should be avoided. Buyers who ask for the
purchase to be shipped using a certain method to avoid customs or taxes inside
another country should be avoided.
Be suspect of any credit card purchases where the address of the card holder
does not match the shipping address. Always receive the card holder's
authorization before shipping any products. In addition, visit
eBay and
PayPal for additional security alerts and fraud
prevention tips.
AUCTION FRAUD Romania Auction fraud is the
most prevalent of Internet crimes associated with Romania. The subjects have
saturated the Internet auctions and offer almost every in-demand product. The
subjects have also become more flexible, allowing victims to send half the funds
now, and the other half when the item arrives. The auctions are often posted as
if the seller is a United States citizen, then the subject advises the victim to
send the money to a business partner, associate, sick relative, a family member,
etc., usually in a European country. The money is usually transferred via
MoneyGram or Western Union wire transfer. The Internet Crime Complaint Center
has verified in order to receive funds via Western Union, the receiver must
provide the complete information of the sender and the receiver's full name and
address. The funds can be picked up anywhere in the world using this
information. There is no need to provide the money transfer control number (MTCN)
or the answer to any secret question, as many subjects have purported to the
victims. Money sent via wire transfer leaves little recourse for the victim. The
most recent trend is a large increase in bank-to-bank wire transfers. Most
significantly, these wire transfers go through large United States banks and are
then routed to Bucharest, Romania or Riga, Latvia. Similarly, the sellers also
occasionally direct the victims to pay using phony escrow services. Sometimes
actual escrow websites are compromised and other sites resembling them are
created by the subjects. Once the funds are wire transferred to the escrow
website, the seller discontinues contact. .In addition, visit
eBay and
PayPal for additional security alerts and fraud
prevention tips.
COUNTERFEIT CASHIER'S CHECK
The counterfeit cashier's check scheme targets individuals that use Internet
classified advertisements to sell merchandise. Typically, an interested party
located outside the United States contacts a seller. The seller is told that the
buyer has an associate in the United States that owes him money. As such, he
will have the associate send the seller a cashier's check for the amount owed to
the buyer. The amount of the cashier's check will be thousands of dollars more
than the price of the merchandise and the seller is told the excess amount will
be used to pay the shipping costs associated with getting the merchandise to his
location. The seller is instructed to deposit the check, and as soon as it
clears, to wire the excess funds back to the buyer or to another associate
identified as a shipping agent. In most instances, the money is sent to
locations in West Africa (Nigeria). Because a cashier's check is used, a bank
will typically release the funds immediately, or after a one or two day hold.
Falsely believing the check has cleared, the seller wires the money as
instructed. In some cases, the buyer is able to convince the seller that some
circumstance has arisen that necessitates the cancellation of the sale, and is
successful in conning the victim into sending the remainder of the money.
Shortly thereafter, the victim's bank notifies him that the check was
fraudulent, and the bank is holding the victim responsible for the full amount
of the check.
CREDIT CARD FRAUD
The Internet Crime Complaint Center has received multiple reports alleging
foreign subjects are using fraudulent credit cards. The unauthorized use of a
credit/debit card, or card number, to fraudulently obtain money or property is
considered credit card fraud. Credit/debit card numbers can be stolen from
unsecured websites, or can be obtained in an identity theft scheme. Visit any of
the three credit bureaus,
Equifax,
Experian, or
TransUnion, for more information or to place a
fraud alert on your credit report. Visit the
Federal Trade Commission for additional
information.
DEBT ELIMINATION
Debt
elimination schemes generally
involve websites advertising a legal way to dispose of mortgage loans and credit
card debts. Most often, all that is required of the participant is to send
$1,500 to $2,000 to the subject, along with all the particulars of the
participant's loan information and a special power of attorney authorizing the
subject to enter into transactions regarding the title of the participant's
homes on their behalf. The subject then issues bonds and promissory notes to the
lenders that purport to legally satisfy the debts of the participant. In
exchange, the participant is then required to pay a certain percentage of the
value of the satisfied debts to the subject. The potential risk of identity
theft related crimes associated with the debt elimination scheme is extremely
high because the participants provide all of their personal information to the
subject.
PARCEL COURIER EMAIL SCHEME
The Parcel Courier Email Scheme involves the supposed use of various National
and International level parcel providers such as DHL, UPS, FedEx and the USPS.
Often, the victim is directly emailed by the subject (s) following online bidding
on auction sites. Most of the scams follow a general pattern which includes the
following elements:
The subject instructs the buyer to provide shipping information such as name and
address.
The subject informs the buyer that the item will be available at the selected
parcel provider in the buyer's name and address, thereby, identifying the
intended receiver.
The selected parcel provider checks the item and purchase documents to guarantee
everything is in order.
The selected parcel provider sends the buyer delivery notification verifying
their receipt of the item. The buyer is instructed by the subject to go to an
electronic funds transfer medium, such as Western Union, and make a funds
transfer in the subject's name and in the amount of the purchase price.
After the funds transfer, the buyer is instructed by the subject to forward the
selected parcel provider the funds transfer identification number, as well as
their name and address associated with the transaction. The subject informs the
buyer the parcel provider will verify payment information and complete the
delivery process. Upon completion of delivery and inspection of the item (s) by
the receiver, the buyer provides the parcel provider funds transfer information,
thus, allowing the seller to receive his funds.
EMPLOYMENT/BUSINESS OPPORTUNITIES
Employment/business opportunity schemes have surfaced wherein bogus
foreign-based companies are recruiting citizens in the United States on several
employment-search websites for work-at-home employment opportunities. These
positions often involve reselling or reshipping merchandise to destinations
outside the United States. Prospective employees are required to provide
personal information, as well as copies of their identification, such as a
driver's license, birth certificate, or social security card. Those employees
that are "hired" by these companies are then told that their salary will be paid
by check from a United States company reported to be a creditor of the employer.
This is done under the pretense that the employer does not have any banking set
up in the United States. The amount of the check is significantly more than the
employee is owed for salary and expenses, and the employee is instructed to
deposit the check into their own account, and then wire the overpayment back to
the employer's bank, usually located in Eastern Europe. The checks are later
found to be fraudulent, often after the wire transfer has taken place.
In a similar scam, some web-based international companies are advertising for
affiliate opportunities, offering individuals the chance to sell high-end
electronic items, such as
Plasma television sets and home theater systems, at
significantly reduced prices. The affiliates are instructed to offer the
merchandise on well-known Internet auction sites. The affiliates will accept the
payments, and pay the company, typically by means of wire transfer. The company
is then supposed to drop-ship the merchandise directly to the buyer, thus
eliminating the need for the affiliate to stock or warehouse merchandise. The
merchandise never ships, which often prompts the buyers to take legal action
against the affiliates, who in essence are victims themselves.
ESCROW SERVICES FRAUD
In an effort to persuade a wary Internet auction participant, the perpetrator
will propose the use of a third-party
escrow service to facilitate the
exchange
of money and merchandise. The victim is unaware the perpetrator has actually
compromised a true escrow site and, in actuality, created one that closely
resembles a legitimate escrow service. The victim sends payment to the phony
escrow and receives nothing in return. Or, the victim sends merchandise to the
subject and waits for his/her payment through the escrow site which is never
received because it is not a legitimate service.
In addition, visit
Escrow.com for security alerts and fraud
prevention tips.
IDENTITY THEFT
Identity theft occurs when someone appropriates another's personal information
without their knowledge to commit theft or fraud. Identity theft is a vehicle
for perpetrating other types of fraud schemes. Typically, the victim is led to
believe they are divulging sensitive personal information to a legitimate
business, sometimes as a response to an email solicitation to update billing or
membership information, or as an application to a fraudulent Internet job
posting.
In addition, visit the
Federal Trade Commission for additional
information on security and fraud prevention tips.
INTERNET EXTORTION
Internet extortion involves hacking into and controlling various industry
databases, promising to release control back to the company if funds are
received, or the subjects are given web administrator jobs. Similarly, the
subject will threaten to compromise information about consumers in the industry
database unless funds are received.
INVESTMENT FRAUD
Investment fraud is an offer using false or fraudulent claims to solicit
investments or loans, or providing for the purchase, use, or trade of forged or
counterfeit securities.
LOTTERIES
The lottery scheme deals with persons randomly contacting email addresses
advising them they have been selected as the winner of an International lottery.
The Internet Crime Complaint Center has identified numerous lottery names being
used in this scheme.
The email message usually reads similar to the following:
"This is to inform you of the release of money winnings to you. Your email
was randomly
selected as the winner and therefore you have been approved for a lump sum
payout of
$500,000.00. To begin your lottery claim, please contact the processing
company
selected to process your winnings."
An agency name follows this body of text with a point of contact, phone number,
fax number, and an email address. An initial fee ranging from $1,000 to $5,000
is often requested to initiate the process and additional fee requests follow
after the process has begun. These emails may also list a United States point of
contact and address while also indicating the point of contact at a foreign
address.
NIGERIAN LETTER OR "419"
Named for the violation of Section 419 of the Nigerian Criminal Code, the 419
scam combines the threat of impersonation fraud with a variation of an advance
fee scheme in which a letter, email, or fax is received by the potential victim.
The communication from individuals representing themselves as Nigerian or
foreign government officials offers the recipient the "opportunity" to share in
a percentage of millions of dollars, soliciting for help in placing large sums
of money in overseas bank accounts. Payment of taxes, bribes to government
officials, and legal fees are often described in great detail with the promise
that all expenses will be reimbursed as soon as the funds are out of the
country.
The recipient is encouraged to send information to the author, such as blank
letterhead stationary, bank name and account numbers, and other identifying
information using a facsimile number provided in the letter. The scheme relies
on convincing a willing victim to send money to the author of the letter in
several installments of increasing amounts for a variety of reasons.
Visit the
Economic and Financial Crimes Commission to
learn more about combating financial and economic crimes in Nigeria.
PHISHING/SPOOFING
Phishing and spoofing are somewhat synonymous in that they refer to forged or
faked electronic documents. Spoofing generally refers to the dissemination of
email which is forged to appear as though it was sent by someone other than the
actual sender. Phishing, often utilized in conjunction with spoofed email, is
the creation of a website to make that site appear as the legitimate business
website. Once the fraudulent email has been launched, the spoofed websites
attempt to dupe the unsuspecting victims into divulging sensitive information
such as passwords, credit card numbers, and bank account information.
Visit the
Anti-Phishing Working Group, for more
information on phishing and email spoofing.
PONZI/PYRAMID
Ponzi or pyramid schemes are investment scams in which investors are
promised abnormally high profits on their investments. No investment is actually
made. Early investors are paid returns with the investment money received from
the later investors. The system usually collapses. The later investors do not
receive dividends and lose their initial investment.
RESHIPPING
The "reshipping" scheme requires individuals in the United States, who
sometimes are coconspirators and other times are unwitting accomplices, to
receive packages at their residence and subsequently repackage the merchandise
for shipment, usually abroad. "Reshippers" are being recruited in various ways
but the most prevalent are through employment offers and conversing, and later
befriending, unsuspecting victims through Internet Relay Chat Rooms.
Unknown subjects post help-wanted advertisements at popular Internet job search
sites and respondents quickly reply to the online advertisement. As part of the
application process, the prospective employee is required to complete an
employment application, wherein he/she divulges sensitive personal information,
such as their date of birth and social security number which, unbeknownst to the
victim employee, will be used to obtain credit in his/her name.
The applicant is informed he/she has been hired and will be responsible for
forwarding, or "reshipping", merchandise purchased in the United States to the
company's overseas home office. The packages quickly begin to arrive and, as
instructed, the employee dutifully forwards the packages to their overseas
destination. Unbeknownst to the "reshipper," the recently received merchandise
was purchased with fraudulent credit cards.
The second means of recruitment involves the victim conversing with the unknown
individual in various Internet Relay Chat Rooms. After establishing this new
online "friendship" or "love" relationship, the unknown subject explains for
various legal reasons his/her country will not allow direct business shipments
into his/her country from the United States. He/she then asks for permission to
send recently purchased items to the victim's United States address for
subsequent shipment abroad for which the unknown subject explains he/she will
cover all shipping expenses.
After the United States citizen agrees, the packages start to arrive at great
speed. This fraudulent scheme lasts several weeks until the "reshipper" is
contacted. The victimized merchants explain to the "reshipper" the recent
shipments were purchased with fraudulent credit cards. Shortly thereafter, the
strings of attachment are untangled and the boyfriend/girlfriend realizes their
Cyber relationship was nothing more than an Internet scam to help facilitate the
transfer of goods purchased online by fraudulent means.
Visit the
Economic and Financial Crimes Commission to
learn more about combating financial and economic crimes in Nigeria.
SPAM
With improved technology and world-wide Internet access, spam, or
unsolicited bulk email, is now a widely used medium for committing traditional
white collar crimes including financial institution fraud, credit card fraud,
and identity theft, among others. It is usually considered unsolicited because
the recipients have not opted to receive the email. Generally, this bulk email
refers to multiple identical messages sent simultaneously. Those sending this
spam are violating the Controlling the Assault of Non-Solicited Pornography and
Marketing (CAN SPAM) Act, Title 18, U.S.C., Section 1037.
Spam can also act as the vehicle for accessing computers and servers without
authorization and transmitting viruses and Botnets. The subjects masterminding
this Spam often provide hosting services and sell open proxy information, credit
card information, and email lists illegally.
THIRD PARTY RECEIVER OF FUNDS
A general trend has been noted by the Internet Crime Complaint Center regarding
work-at-home schemes on websites. In several instances, the subjects, usually
foreign, post work-at-home job offers on popular Internet employment sites,
soliciting for assistance from United States citizens. The subjects allegedly
are posting Internet auctions, but cannot receive the proceeds from these
auctions directly because his/her location outside the United States makes
receiving these funds difficult. The seller asks the United States citizen to
act as a third party receiver of funds from victims who have purchased products
from the subject via the Internet.
The United States citizen, receiving the funds from the victims, then wires the
money to the subject.
You can file a complaint and receive more information about these types of fraud
at the
Internet Crime Complaint Center.
Phishing attacks use both social engineering and technical subterfuge
to steal consumers' personal identity data and financial account credentials.
Social-engineering schemes use 'spoofed' e-mails to lead consumers to
counterfeit websites designed to trick recipients into divulging financial data
such as credit card numbers, account usernames, passwords and social security
numbers. Hijacking brand names of banks, e-retailers and credit card companies,
phishers often convince recipients to respond. Technical subterfuge schemes
plant crimeware onto PCs to steal credentials directly, often using
Trojan keylogger spyware. Pharming crimeware misdirects users to
fraudulent sites or proxy servers, typically through DNS hijacking or poisoning
These crimes and other internet/technology related law enforcement issues are
regularly discussed on
Criminal Justice Online.
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