the fraud dogs tips

Spring Break Fraud

Fraud Dog says Spring Breakers watch out for the “land shark” fraudsters while on vacation. Watch out for those phony (phishing) web sites that promise great vacation deals. Do your research to make sure you are talking to the real hotel website or travel site. Rental Vacation Properties offering weekend rental or week rentals beware, and make sure you are talking to the real owners or property managers. Make sure that property is really a rental property. Be sure to let someone know where you are going, as the “bar watcher” is just waiting to see if he can get your identity or credit card.  “Follow the swipe of your credit cards, as credit card readers can be bought on the internet for less than $20.00, and selling your identity on the internet is worth $50.00 per swipe. Watch what you put on social media, as the fraudster may follow your information so as to trick your family members into thinking your in trouble, like needing to be bailed out of jail, when your actually just going to a movie. Set up times for which you will talk to your family members so they know you are ok. Create a password for which only you and your family would know. Never leave your “ bar drink” unattended, as you never know who might slip you some unwanted narcotics to take advantage of you later. Be cautious if you are wiring money to someone you do know. Watch out for impersonators promising you some fun events while at the beach or vacationing, only to be ripped off later. Fraudster look for innocent vacationers for “staged auto accidents” like the “swoop and squat”. Always report the accident to local police. Be alert, as the fraudster is waiting for that moment you are … Continue reading →

Mar 16

Red Flags for Rental Property Scams

Red Flags for Rental Property Scams Use caution with the following: •    Long-distance inquiries. Take extra care in long-distance situations, especially from users in foreign countries. We have seen a number of scam attempts that involve individuals in foreign countries who say they are interested in purchasing or renting out a home. •    Requests that you send a check or money order, or wire funds. Most scams eventually involve such a request, and there are many variations. A scammer may have convincing reasons why they need to deal remotely. They may wire overpayment of funds to you and request that you wire back a refund. They may ask you to use a false online “escrow service”. Do not wire funds to anyone you haven’t met personally. Also, do not accept wire funds that you did not initiate. •    Requests for personal and/or financial information. With identity theft on the rise, it is a good general rule to provide your personal/financial information sparingly, and only to trusted sources. •    Offers to facilitate a home purchase or loan or rental by an individual claiming an affiliation with Zillow. Zillow acts only as a source of information and is not involved in any transactions between buyers and sellers, renters and landlords, or borrowers and lenders. Any such offers are fraudulent activity. •    Suggestions to use Zillow for money exchanges. Zillow does not handle money exchanges between buyers and sellers or tenants and landlords.  Anyone telling you otherwise is trying to scam you. (See scam example #2 below). •    Typos, grammatical errors and inflated stories. Emails that are filled with spelling and grammatical errors are usually a sign of fraud. Also, the sender might claim the importance of themselves or the person they are representing (“I work with the United nations development program”) and … Continue reading →

Mar 12

Pyramid Schemes

As in Ponzi schemes, the money collected from newer victims of the fraud is paid to earlier victims to provide a veneer of legitimacy. In pyramid schemes, however, the victims themselves are induced to recruit further victims through the payment of recruitment commissions. More specifically, pyramid schemes—also referred to as franchise fraud or chain referral schemes—are marketing and investment frauds in which an individual is offered a distributorship or franchise to market a particular product. The real profit is earned, not by the sale of the product, but by the sale of new distributorships. Emphasis on selling franchises rather than the product eventually leads to a point where the supply of potential investors is exhausted and the pyramid collapses. At the heart of each pyramid scheme is typically a representation that new participants can recoup their original investments by inducing two or more prospects to make the same investment. Promoters fail to tell prospective participants that this is mathematically impossible for everyone to do, since some participants drop out, while others recoup their original investments and then drop out. Tips for Avoiding Pyramid Schemes: Be wary of “opportunities” to invest your money in franchises or investments that require you to bring in subsequent investors to increase your profit or recoup your initial investment. Independently verify the legitimacy of any franchise or investment before you invest. Market Manipulation or “Pump and Dump” Fraud This scheme—commonly referred to as a “pump and dump”—creates artificial buying pressure for a targeted security, generally a low-trading volume issuer in the over-the-counter securities market largely controlled by the fraud perpetrators. This artificially increased trading volume has the effect of artificially increasing the price of the targeted security (i.e., the “pump”), which is rapidly sold off into the inflated market for the security by the fraud perpetrators … Continue reading →

Mar 8

“Ponzi’ Schemes

“Ponzi” schemes promise high financial returns or dividends not available through traditional investments. Instead of investing the funds of victims, however, the con artist pays “dividends” to initial investors using the funds of subsequent investors. The scheme generally falls apart when the operator flees with all of the proceeds or when a sufficient number of new investors cannot be found to allow the continued payment of “dividends.” This type of fraud is named after its creator—Charles Ponzi of Boston, Massachusetts. In the early 1900s, Ponzi launched a scheme that guaranteed investors a 50 percent return on their investment in postal coupons. Although he was able to pay his initial backers, the scheme dissolved when he was unable to pay later investors. Tips for Avoiding Ponzi Schemes: Be careful of any investment opportunity that makes exaggerated earnings claims. Exercise due diligence in selecting investments and the people with whom you invest—in other words, do your homework. Consult an unbiased third party—like an unconnected broker or licensed financial advisor—before investing.

Mar 4

Prime Bank Note Fraud

International fraud artists have invented an investment scheme that supposedly offers extremely high yields in a relatively short period of time. In this scheme, they claim to have access to “bank guarantees” that they can buy at a discount and sell at a premium. By reselling the “bank guarantees” several times, they claim to be able to produce exceptional returns on investment. For example, if $10 million worth of “bank guarantees” can be sold at a two percent profit on 10 separate occasions—or “traunches”—the seller would receive a 20 percent profit. Such a scheme is often referred to as a “roll program.” To make their schemes more enticing, con artists often refer to the “guarantees” as being issued by the world’s “prime banks,” hence the term “prime bank guarantees.” Other official sounding terms are also used, such as “prime bank notes” and “prime bank debentures.” Legal documents associated with such schemes often require the victim to enter into non-disclosure and non-circumvention agreements, offer returns on investment in “a year and a day”, and claim to use forms required by the International Chamber of Commerce (ICC). In fact, the ICC has issued a warning to all potential investors that no such investments exist. The purpose of these frauds is generally to encourage the victim to send money to a foreign bank, where it is eventually transferred to an off-shore account in the control of the con artist. From there, the victim’s money is used for the perpetrator’s personal expenses or is laundered in an effort to make it disappear. While foreign banks use instruments called “bank guarantees” in the same manner that U.S. banks use letters of credit to insure payment for goods in international trade, such bank guarantees are never traded or sold on any kind of market. Tips for … Continue reading →

Mar 2