Online Fraud
Evolution of phone and mail fraud has eventually led to online scams. Tips on what to look for and how to deal with the issue will shed light on a growing problem.
Phishing
Scammers send emails, which often including the name and logo of a legitimate business or financial institution, luring victims to a fake website where they're asked to enter personal information. Beware of emails that use a generic greeting (Dear Visa customer, or Dear friend) rather than your name, refer to an urgent problem, say that your account will be shut down unless you reconfirm billing or other personal information, or urge you to click on a link within an unsolicited message. Remember that a legitimate business or financial institution will never ask you to enter sensitive financial information via email.
Unsolicited commercial email, also known as spam, is filling our inboxes. It's estimated that unsolicited junk mail accounts for more than nine out of every 10 email messages. If you get spam that you think is deceptive, forward it to spam@uce.gov. For tips on reducing the amount of spam you receive, go to FTC's website and click on For Consumers.
Pharming
When you type in an Internet address and hit enter, you're redirected to a fake website where you're asked to submit personal information. A hacker may have hijacked the legitimate site and is redirecting all traffic. Malware such as viruses and Trojans may be directing you to the site. A minor misspelling of the domain name (vvestcu.org vs. westcu.org) may trigger the redirection. It may be DNS (domain name server) poisoning, which is most dangerous of all because a poisoned server is redirecting traffic. Basically, you enter a web address into your browser, and poisoned servers send you to a web site other than the one you requested.
Avoidance is easy. Keep your firewall and virus protection software up-to-date. Also, look for https: in the URL before entering sensitive information and for the closed padlock icon in your browser frame, separate from the vendor website window; these indicate secure sites. A legitimate business or financial institution will never ask you to enter sensitive financial information via email.
Online Payday Loans
While all payday loans have certain features (such as high interest rates) in common, loans arranged online are even more troublesome than those applied for in person. The online loan applications ask for the personal and financial information anyone would need to steal your identity. And some online payday lenders lack secure Internet connections, so you could be broadcasting your personal information throughout cyberspace. You'd have to give the lender permission to access your checking account to withdraw fees and interest, which could result in overdraft fees from the lender and your financial institutions. Since lenders want you to renew or flip the loans, they often make it difficult to pay them off, and it's typically difficult to track the lender down.
If you're thinking about a payday loan, call your credit union first. It likely offers low-cost, borrower-friendly alternatives. As Todd Mark, vice president of education for Consumer Credit Counseling Service of Greater Dallas, warns, "It's just plain and simple a bad idea to give a payday lender access to your account."
Phony Appeals
Fraudsters have long tried to talk people out of their money with hard-luck stories or too-good-to-be-true opportunities of a lifetime. They used to do it face-to-face or by U.S. mail; now email is often the preferred channel. And the messages frequently come from the other side of the world, although that is seldom obvious. The Nigerian letter scam is a common one. A message arrives claiming a reputable authority figure in an African nation needs help transferring millions of dollars to U.S. accounts, and offers a percentage if the recipient helps. But first the recipient must send an advance fee to cover the transaction costs, and often gets requests for other fees. The sender typically finds reasons to charge other fees until the recipient wises up. Then the sender disappears, with the money.
Simply put, crooks are using technology to commit fraud. International con artists also often snare lovelorn Americans through online dating sites. After the American's interest is piqued, the online correspondent claims to have a sudden need for cash, often due to a personal tragedy. Other common international-fraud scenarios include:
Phishing
Scammers send emails, which often including the name and logo of a legitimate business or financial institution, luring victims to a fake website where they're asked to enter personal information. Beware of emails that use a generic greeting (Dear Visa customer, or Dear friend) rather than your name, refer to an urgent problem, say that your account will be shut down unless you reconfirm billing or other personal information, or urge you to click on a link within an unsolicited message. Remember that a legitimate business or financial institution will never ask you to enter sensitive financial information via email.
Spam Email Prevention
Unsolicited commercial email, also known as spam, is filling our inboxes. It's estimated that unsolicited junk mail accounts for more than nine out of every 10 email messages. If you get spam that you think is deceptive, forward it to spam@uce.gov. For tips on reducing the amount of spam you receive, go to FTC's website and click on For Consumers.
Pharming
When you type in an Internet address and hit enter, you're redirected to a fake website where you're asked to submit personal information. A hacker may have hijacked the legitimate site and is redirecting all traffic. Malware such as viruses and Trojans may be directing you to the site. A minor misspelling of the domain name (vvestcu.org vs. westcu.org) may trigger the redirection. It may be DNS (domain name server) poisoning, which is most dangerous of all because a poisoned server is redirecting traffic. Basically, you enter a web address into your browser, and poisoned servers send you to a web site other than the one you requested.
Avoidance is easy. Keep your firewall and virus protection software up-to-date. Also, look for https: in the URL before entering sensitive information and for the closed padlock icon in your browser frame, separate from the vendor website window; these indicate secure sites. A legitimate business or financial institution will never ask you to enter sensitive financial information via email.
Online Payday Loans
While all payday loans have certain features (such as high interest rates) in common, loans arranged online are even more troublesome than those applied for in person. The online loan applications ask for the personal and financial information anyone would need to steal your identity. And some online payday lenders lack secure Internet connections, so you could be broadcasting your personal information throughout cyberspace. You'd have to give the lender permission to access your checking account to withdraw fees and interest, which could result in overdraft fees from the lender and your financial institutions. Since lenders want you to renew or flip the loans, they often make it difficult to pay them off, and it's typically difficult to track the lender down.
If you're thinking about a payday loan, call your credit union first. It likely offers low-cost, borrower-friendly alternatives. As Todd Mark, vice president of education for Consumer Credit Counseling Service of Greater Dallas, warns, "It's just plain and simple a bad idea to give a payday lender access to your account."
Phony Appeals
Fraudsters have long tried to talk people out of their money with hard-luck stories or too-good-to-be-true opportunities of a lifetime. They used to do it face-to-face or by U.S. mail; now email is often the preferred channel. And the messages frequently come from the other side of the world, although that is seldom obvious. The Nigerian letter scam is a common one. A message arrives claiming a reputable authority figure in an African nation needs help transferring millions of dollars to U.S. accounts, and offers a percentage if the recipient helps. But first the recipient must send an advance fee to cover the transaction costs, and often gets requests for other fees. The sender typically finds reasons to charge other fees until the recipient wises up. Then the sender disappears, with the money.
Simply put, crooks are using technology to commit fraud. International con artists also often snare lovelorn Americans through online dating sites. After the American's interest is piqued, the online correspondent claims to have a sudden need for cash, often due to a personal tragedy. Other common international-fraud scenarios include:
- Inheritance scams promising a substantial legacy from a long-lost relative in exchange for payment of fees up front.
- Employment scams offering a work permit for a highly paid job abroad in exchange for substantial advance fees. In some cases, applicants may be responding to ads posted online or targeted as a result of a resume the applicant posted online.
- Online auction scams involving over-payment for the purchase of an item offered online at an auction site such as eBay. After refunding the amount of the over-payment and perhaps even sending the item to the purchaser, the seller discovers that the international money order used for payment was fake.
- Lottery scams use emails or letters to notify recipients that they've won the Spanish (or another country's) lottery, but must pay fees before collecting. Once they pay the fees, they discover that only Spanish residents who purchased the tickets in Spain may win.