Types of Scams and Fraud Sources

Unsecured, Public Area Computers – keyloggers and sniffers are placed on computers by criminals to watch and record every key stroke.  Even checking your e-mail is dangerous on public area computers.

SMS Attacks or “Smishing” – SMS (Short Message Service) or text messages sent to smart phones or a cell phone. The message may warn of dire consequences if you do not respond or validate your information immediately.  Do not respond to these messages.  Contact the company to confirm the messages validity using a telephone number or website you know to be genuine.

Pharming occurs when you are redirected to a fraudulent website and unknowingly share your personal information.

Spyware is software used to collect personal information necessary to hijack accounts.  The personal information is collect from the infected computer and sent to the criminals.

Malware, short for “malicious software,” includes viruses, spyware and trojans that are designed to infiltrate or damage a computer system. Malware is often used to steal personal information and commit fraud.

Money Mules are unsuspecting victims who become middlemen for criminals trying to launder stolen funds. Victims are lured by the promise of a new career opportunity making large sums of money for minimal work. Criminals recruit money mules, send them stolen money and then ask the money mules to wire or transfer the money unwittingly to the criminals. Using the money mule masks the criminal’s identity.  Common signs of a money mule scam: Overseas companies requesting money transfer agents in the U.S., Opening new bank accounts to receive money from someone you do not know, Accepting large sums of money into your personal bank account for a new job, Transferring or wiring funds out of your personal bank account to people you do not know.

Phishing attacks use ‘spoofed’ e-mails and fraudulent websites designed to fool recipients into divulging personal financial data such as credit card numbers, account usernames and passwords, Social Security numbers, etc.  By hijacking the trusted brands of well-known banks, online retailers and credit card companies, phishers are able to convince recipients to respond to them.

Vishing uses Voice over Internet Protocol (VoIP) to call, leaving an automated recording. It alerts the consumer that their account has experienced unusual activity. The message instructs the consumer to call the same phone number shown in the spoofed caller ID with the same name as the financial company they are pretending to represent. And sometimes, criminals who try to get consumers to turn over personal data send emails and text messages containing fraudulent phone numbers.


Common Scams and Fraud Alerts

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:

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


Secret or Mystery Shoppers

You may have heard about people who are “hired” to be mystery shoppers, and told that their first assignment is to evaluate a money transfer service, like Western Union or MoneyGram. The shopper receives a check with instructions to deposit it in a personal bank account, withdraw the amount in cash, and wire it to a third party. The check is a fake.

By law, banks must make the funds from deposited checks available within days, but uncovering a fake check can take weeks. It may seem that the check has cleared and that the money has posted to the account, but when the check turns out to be a fake, the person who deposited the check and wired the money will be responsible for paying back the bank.

It’s never a good idea to deposit a check from someone you don’t know and then wire money back.


Advance Fee Schemes

An advance fee scheme occurs when the victim pays money to someone in anticipation of receiving something of greater value—such as a loan, contract, investment, or gift—and then receives little or nothing in return.

The variety of advance fee schemes is limited only by the imagination of the con artists who offer them. They may involve the sale of products or services, the offering of investments, lottery winnings, “found money,” or many other “opportunities.” Clever con artists will offer to find financing arrangements for their clients who pay a “finder’s fee” in advance. They require their clients to sign contracts in which they agree to pay the fee when they are introduced to the financing source. Victims often learn that they are ineligible for financing only after they have paid the “finder” according to the contract. Such agreements may be legal unless it can be shown that the “finder” never had the intention or the ability to provide financing for the victims.


Sweepstakes/Prize Scams

Every day, thousands of American consumers receive sweepstakes promotions by phone, over the Internet or in the mail. Legitimate sweepstakes are advertising and marketing techniques that offer participating consumers a chance to win a prize or money with no purchase or entry fee required. But if you have to pay to play or pay to receive your “winnings,” the promotion is a scam.

You should never have to pay to enter a sweepstakes. That includes paying shipping and handling fees, taxes, or buying a product to receive your “prize”. And that “free prize” could end up costing you hundreds or thousands of dollars.

A legitimate sweepstakes will never charge you to win. If you receive a promotion congratulating you on winning a prize, but requiring a shipping and handling fee, it is not a sweepstakes and may be fraudulent. You should never have to pay any fee in order to receive a prize in a sweepstakes.



Bank customers are responsible for the checks they deposit, and victims must repay the bank for bad checks. Federal law requires banks to make the funds you deposit available quickly, but it’s important for consumers to know that, just because you can withdraw the money, it doesn’t mean the check is good. Banks often release funds from a cashier’s check or money order before it clears.

Why are there so many victims?

Con artists have found a means of exploiting the charitable nature of Americans. This confidence scam plays to our core values as a society, which often blinds our judgment in dealing with the real issue. Additionally, the Internet brings this scam into our home, where we feel most secure and are more vulnerable.

There are also “non-victims.” Anyone who agrees to cash the instruments on behalf of a foreign citizen and keep a portion for themselves are not victims, they are accomplices.



Counterfeit Check Scams

You think cashier’s checks and money orders are as good as cash, but really they’re just like any other check – they are only as good as the person sending it to you, whether it’s an online acquaintance or a buyer.

A seller advertises an item or service over the Internet, (i.e. roommate). A “buyer” often from a foreign country, contacts the seller about purchasing the item or service with a cashier’s check issued from a bank in the United States. The buyer tells the seller that he either mistakenly sent too large a check or that he will be sending a check for more than the purchase price.

In friendship cases, the scam starts in chat rooms on the Internet where participants tell a hardship story; usually involving having a large check they cannot cash in their own country. The scammer tells their chat room friend that, if they will cash the check, they can keep a portion of the proceeds for themselves.

In either event, the seller or friend is instructed to immediately wire the “balance” back to the buyer. The unsuspecting victim then deposits the cashier’s check in their bank account and waits until they think the check clears. Because a cashier’s check is used, a bank will typically release the funds immediately, or after a one or two day hold. At that time, the victim is able to withdraw the “overpayment” before the check winds its way back to the bank that supposedly issued it. That can take two to three weeks, or even longer. Of course, after wiring the money back to the buyer, the scam artist is nowhere to be found and the victim learns from his bank that the check was counterfeit, and he must refund the full amount to the bank.

These fake cashier’s checks and money orders appear to be authentic — including the name of a legitimate United States bank and even containing the magnetic routing codes that appear along the bottom of the check.

Read More About Counterfeit Check Schemes at these links:




Tips to Avoid Being Scammed:



Internet Crime Complaint Center – Report suspicious activity to the Internet Crime Complaint Center, a partnership between the FBI and the National White Collar Crime Center at www.ic3.gov.

Anti-Phishing Working Group – Report Phishing e-mails to:  www.antiphishing.org

FBI – Find out about recent scams at:  www.fbi.gov

Counterfeit Currency – For information about counterfeit currency, go to U.S. Secret Service – Know Your Money – https://www.secretservice.gov/data/KnowYourMoney.pdf

Foreign Lotteries – For more information on foreign lotteries and to order the free DVD, Longshot, call 1-800-STAMP-24.

Money Order Fraud Hot Line, run by the Inspection Service’s Criminal Investigative Support Center, at (800) 372-8347.

Counterfeit Check Schemes – Read More About Counterfeit Check Schemes at these link


Suspicious E-mails or Calls – You can report suspicious emails or calls to the Federal Trade Commission through the Internet at https://www.consumer.gov/idtheft, or by calling 1-877-IDTHEFT.

Identity Theft Kit is available at:  https://www.consumer.ftc.gov/articles/pdf-0009-taking-charge.pdf

To report a lost or stolen Check Card, call (800) 454-8969.



The Fair and Accurate Credit Transactions Act, also known as FACTA, establishes rules to help ensure the accuracy and protection of your credit information used by credit reporting agencies.

Some FACTA rules you can use:

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