. If you know someone who is corresponding in one of these schemes, encourage that person to contact the FBI or the U.S. Secret Service as soon as possible.
Be skeptical of individuals representing themselves as Nigerian or foreign government officials asking for your help in placing large sums of money in overseas bank accounts.
Do not believe the promise of large sums of money for your cooperation.
Guard your account information carefullyAdvance 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.
Tips for Avoiding Advanced Fee Schemes:
If the offer of an "opportunity" appears too good to be true, it probably is. Follow common business practice. For example, legitimate business is rarely conducted in cash on a street corner.
Know who you are dealing with. If you have not heard of a person or company that you intend to do business with, learn more about them. Depending on the amount of money that you plan on spending, you may want to visit the business location, check with the Better Business Bureau, or consult with your bank, an attorney, or the police.
Make sure you fully understand any business agreement that you enter into. If the terms are complex, have them reviewed by a competent attorney.
Be wary of businesses that operate out of post office boxes or mail drops and do not have a street address. Also be suspicious when dealing with persons who do not have a direct telephone line and who are never in when you call, but always return your call later.
Be wary of business deals that require you to sign nondisclosure or non-circumvention agreements that are designed to prevent you from independently verifying the bona fides of the people with whom you intend to do business. Con artists often use non-circumvention agreements to threaten their victims with civil suit if they report their losses to law enforcement.
Health Care Fraud or Health Insurance FraudMedical Equipment Fraud:
Equipment manufacturers offer "free" products to individuals. Insurers are then charged for products that were not needed and/or may not have been delivered."Rolling Lab" Schemes:
Unnecessary and sometimes fake tests are given to individuals at health clubs, retirement homes, or shopping malls and billed to insurance companies or Medicare.Services Not Performed:
Customers or providers bill insurers for services never rendered by changing bills or submitting fake ones.Medicare Fraud:
Medicare fraud can take the form of any of the health insurance frauds described above. Senior citizens are frequent targets of Medicare schemes, especially by medical equipment manufacturers who offer seniors free medical products in exchange for their Medicare numbers. Because a physician has to sign a form certifying that equipment or testing is needed before Medicare pays for it, con artists fake signatures or bribe corrupt doctors to sign the forms. Once a signature is in place, the manufacturers bill Medicare for merchandise or service that was not needed or was not ordered.
Tips for Avoiding Health Care Fraud or Health Insurance Fraud:
Never sign blank insurance claim forms.
Never give blanket authorization to a medical provider to bill for services rendered.
Ask your medical providers what they will charge and what you will be expected to pay out-of-pocket.
Carefully review your insurer's explanation of the benefits statement. Call your insurer and provider if you have questions.
Do not do business with door-to-door or telephone salespeople who tell you that services of medical equipment are free.
Give your insurance/Medicare identification only to those who have provided you with medical services.
Keep accurate records of all health care appointments.
Know if your physician ordered equipment for you
Redemption / Strawman / Bond FraudProponents of this scheme claim that the U.S. government or the Treasury Department control bank accounts—often referred to as “U.S. Treasury Direct Accounts”—for all U.S. citizens that can be accessed by submitting paperwork with state and federal authorities. Individuals promoting this scam frequently cite various discredited legal theories and may refer to the scheme as “Redemption,” “Strawman,” or “Acceptance for Value.” Trainers and websites will often charge large fees for “kits” that teach individuals how to perpetrate this scheme. They will often imply that others have had great success in discharging debt and purchasing merchandise such as cars and homes. Failures to implement the scheme successfully are attributed to individuals not following instructions in a specific order or not filing paperwork at correct times.
This scheme predominately uses fraudulent financial documents that appear to be legitimate. These documents are frequently referred to as “bills of exchange,” “promissory bonds,” “indemnity bonds,” “offset bonds,” “sight drafts,” or “comptrollers warrants.” In addition, other official documents are used outside of their intended purpose, like IRS forms 1099, 1099-OID, and 8300. This scheme frequently intermingles legal and pseudo legal terminology in order to appear lawful. Notaries may be used in an attempt to make the fraud appear legitimate. Often, victims of the scheme are instructed to address their paperwork to the U.S. Secretary of the Treasury.
Tips for Avoiding Redemption/Strawman/Bond Fraud:
Be wary of individuals or groups selling kits that they claim will inform you on to access secret bank accounts.
Be wary of individuals or groups proclaiming that paying federal and/or state income tax is not necessary.
Do not believe that the U.S. Treasury controls bank accounts for all citizens.
Be skeptical of individuals advocating that speeding tickets, summons, bills, tax notifications, or similar documents can be resolved by writing “acceptance for value” on them.
If you know of anyone advocating the use of property liens to coerce acceptance of this scheme, contact your local FBI office.
Investment-Related Scams
Letter of Credit FraudLegitimate letters of credit are never sold or offered as investments. They are issued by banks to ensure payment for goods shipped in connection with international trade. Payment on a letter of credit generally requires that the paying bank receive documentation certifying that the goods ordered have been shipped and are en route to their intended destination. Letters of credit frauds are often attempted against banks by providing false documentation to show that goods were shipped when, in fact, no goods or inferior goods were shipped.
Other letter of credit frauds occur when con artists offer a "letter of credit" or "bank guarantee" as an investment wherein the investor is promised huge interest rates on the order of 100 to 300 percent annually. Such investment "opportunities" simply do not exist. (See Prime Bank Notes for additional information).
Tips for Avoiding Letter of Credit Fraud:
If an "opportunity" appears too good to be true, it probably is.
Do not invest in anything unless you understand the deal. Con artists rely on complex transactions and faulty logic to "explain" fraudulent investment schemes.
Do not invest or attempt to "purchase" a "letter of credit." Such investments simply do not exist.
Be wary of any investment that offers the promise of extremely high yields.
Independently verify the terms of any investment that you intend to make, including the parties involved and the nature of the investment
“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.
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” FraudThis 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 (i.e., the "dump"); resulting in illicit gains to the perpetrators and losses to innocent third party investors.
Typically, the increased trading volume is generated by inducing unwitting investors to purchase shares of the targeted security through false or deceptive sales practices and/or public information releases.
A modern variation on this scheme involves largely foreign-based computer criminals gaining unauthorized access to the online brokerage accounts of unsuspecting victims in the United States. These victim accounts are then utilized to engage in coordinated online purchases of the targeted security to affect the pump portion of a manipulation, while the fraud perpetrators sell their pre-existing holdings in the targeted security into the inflated market to complete the dump.
Tips for Avoiding Market Manipulation Fraud:
Don't believe the hype.
Find out where the stock trades.
Independently verify claims.
Research the opportunity.
Beware of high-pressure pitches.
Always be skeptical.
Telemarketing FraudWhen 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:
"You must act 'now' or the offer won't be good."
"You've won a 'free' gift, vacation, or prize." But you have to pay for "postage and handling" or other charges.
"You must send money, give a credit card or bank account number, or have a check picked up by courier." You may hear this before you have had a chance to consider the offer carefully.
"You don't need to check out the company with anyone." The callers say you do not need to speak to anyone including your family, lawyer, accountant, local Better Business Bureau, or consumer protection agency.
"You don't need any written information about their company or their references."
"You can't afford to miss this 'high-profit, no-risk' offer."
If you hear these or similar "lines" from a telephone salesperson, just say "no thank you" and hang up the telephone.
Tips to Protect Yourself
1) Alter your phone book listing. Phone books still exist (even though they're not as prevalent as before). Call your local phone company and limit the information they publish about you in the phone book or ask to be completely removed from it.
2) Subscribe to a credit-monitoring service. Not all services are alike. Most will monitor your credit report and notify you when new data is found. Some will help you clean up the damage if your identity is stolen. Some reputable options to look into are I.D. Theft Shield (from Pre-Paid Legal), iSekurity, CSIdentity, and Debix.
3) Beware of Internet phishing scams. In this scam, a crook sends you a fake email pretending to be from a known company (your bank, eBay, IRS, your state lottery, etc.) with some kind of urgent message saying you "need" to fill-in your private account details. Bottom line: If you don't trust the email or if it "feels" fishy – do NOT click on any of the links. If you're concerned that it may be important, use a "proven" phone number (NOT the phone number on the suspicious email) and call the company direct. Chances are if you feel unsure about the email, you'll find out it is in fact a fraudulent email.
4) Own a cross-cut shredder. Shred everything that has any identifying information, even if it's just your name, I.D. thieves can piece together your profile over time, like putting together a puzzle. Sometimes, all they need is one piece of information
5) Encrypt email. A great stopgap to begin encrypting email on your end is to use Hushmail.com. This is a free web-based email service, just like Gmail or Hotmail. (Note: Hushmail keeps a copy of the encryption keys within the corporation, which means if asked by authorities to open your emails, they have the ability to do so.) Their free service option comes with a small 2 MB storage size, which is the size of the old 2-inch diskettes. One trick is to use the free version for sensitive email – bank, health insurance, doctor, broker, etc. Of course, you can buy a membership to increase your storage capacity.
6) Pay cash as often as possible. Reduce exposure of your checks, credit, or debit cards. Pay in cash. If you like the convenience of plastic, especially if you shop online, purchase pre-paid Visa, Mastercard, Amex, or Discover "gift" cards. These "gift" cards are available at most chain stores such as CVS, Wal-Mart, even your local post office. Gift cards can only be used once and do not require any identifying information. (This is not the case with "re-loadable" pre-paid debit cards – to use these you must surrender your birth date, social security number, and more).
7) Use Firefox as your web browser. This is an open-source browser with safety, security, and privacy built in. Plus, it has a number of add-ons that further enhance protection of your online use.
8) Load these Firefox privacy-related add-ons. BetterPrivacy, Ghostery, HTTPS Finder, HTTPS Everywhere, NoScript, PrivacyChoice, TrackerBlocker. A few of these add-ons' benefits may overlap a bit. Overall, they help keep out little programs (scripts) from embedding on your computer, make it more difficult for tracking software to track you, and encrypt your sessions with the more secure, but often optional, HTTPS (S meaning secure) version of the website "url."
9) Secure your mobile electronics. Imagine if someone stole (or you lost) your cell phone, smart phone, iPad, or any other portable digital device. Most likely these gadgets have some personal information like your name, address, or address book with your friends, family, and workmates' personal details. At the very least, use a code to open and access these devices. Limit how much information you carry in these devices. And if you must store private information, use code names or initials to mask the information.
10) Electronically secure your computer and laptop. Make it difficult to steal your data off your computer equipment. As in the example above, use an access code to open and enter your computers. Also, encrypt the data on your computer. You can use TrueCrypt.org to encrypt your hard drive or other portable storage device. You can also use Wuala.com to encrypt and backup your data online (Wuala does NOT store copies of the encryption keys; only you have the keys. Not even their own employees can access your files).
RESOURCES:
http://www.scams.net/