Category Archives: Important Alerts & Scams

Card Skimming 101: How to spot, avoid, and deal with it

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A thief use magnet steal credit card

“Skimming” is a method by which thieves steal your credit card information, and all it requires is a little illicit technology and a lot of criminal intent by those who handle your credit card. Skimming occurs most frequently at retail outlets that process credit card payments — particularly bars, restaurants and gas stations.

How skimming works
Skimmers are small devices that can scan and store credit card data from the magnetic stripe. Crooks can install skimmers on a gas pump, or corrupt employees can have a skimmer stashed out of sight of customers. Once the card is run through the skimmer, the data is recorded, and the crooks can sell the information through a contact or on the Internet, at which point counterfeit cards are made. The criminals go on a shopping spree with a cloned copy of the credit or debit card, and cardholders are unaware of the fraud until a statement arrives with purchases they did not make.

John Brewer, assistant district attorney in the major fraud division of Harris County Texas District Attorney’s Office, says, “Many consumers think that shopping online is a high-risk endeavor compared to going to a brick-and-mortar store, but I believe the opposite. The vast majority of cases we investigate have to do with employees at a physical store stealing your information.”

How to avoid skimming

  • Make sure your card stays in sight, and never let anyone leave your presence with the card if you can help it. “Skimming occurs most at restaurants since the waiter has to walk away with your card,” Brewer says. “If you are in a retail store and they say they have to go to another counter to run the card, follow them.” If you are concerned about letting go of your card at restaurants, use cash instead.
  • Your credit card is like cash. “You need to be aware that your credit card is very valuable,” Brewer says. “Treat it like a diamond or cash. Would you just give someone cash and let them walk away with it?”
  • Monitor credit card receipts and check them carefully against your statements. If you are married, sit down with your spouse to account for all charges, Brewer says. Some thieves take out small amounts in hopes cardholders won’t notice.
  • Shred unwanted financial solicitations and put your mail on hold when you leave town. This will help with other forms of identity theft.

To further protect yourself from potential unauthorized charges or identity fraud, you can request that credit bureaus monitor your accounts for unusual spending patterns and require them to notify you before new credit can be granted in your name. These services come at a price; normally under $100 per year depending on the credit agency. But that might be a worthy investment, especially if you eat in restaurants on a regular basis.

How to deal with skimming

  • Call the police. “When your identity or credit card is stolen, it’s just like having a car stolen,” Brewer says. Make a police report and hang on to the police report number.
  • Contact your bank or credit card issuer immediately and tell them your card data has been stolen. If you don’t make a report quickly, you may be liable for some or all of the unauthorized charges.
  • If you report swiftly, federal law caps your liability at $50. Most credit cards voluntarily go further, and won’t charge you at all — again, if you report quickly. “If you end up being a victim, it’s probably not going to cost you any money,” Brewer says. “If you notify your bank quickly, they’ll return the money. Don’t get hung up about the fact that someone might drain your bank account. The most you will probably spend on it is wasted time and lots of aggravation, since it can be a long process to get everything worked out.”
  • Contact the three major credit bureaus — TransUnion, Equifax and Experian — to request a security freeze, which prevents new credit authorizations without your consent. Brewer suggests visiting the website www.annualcreditreport.com.  Through the site, which was mandated by federal law in response to consumer outcry, you are entitled to receive one free credit report each year from each of the three major credit bureaus.

Brewer suggests viewing the credit reports on a computer you can print from – since you only get to check them once a year. “Look at the inquiries section of your report, and see which companies have looked at your credit,” Brewer says.

If a car dealership looked at your report but you didn’t go there, it’s a sign that the person with your card information went car shopping. Give these reports to the police; it will help them investigate your case.

Avoiding Money Wiring Scams

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financial crookImposters. Impersonators. Fakes. Frauds. Phonies. You might call them by different names, but these scam artists have one thing in common: they pretend to be someone they aren’t and tell you a bogus story to con you into wiring them money.

The crooks will give you a pretty convincing reason to wire money. They might say you owe the IRS taxes and you’ll be arrested if you don’t pay up. Or that you won a federal grant and have to pay a processing fee to get your money. Some even tell you a loved one’s in trouble and needs your help.

They might tell you to use a money wiring service to add funds to a 16-digit account number they give you — they say it’s your case number or account number, but it’s not. Once the transfer goes through, the money’s gone and you can’t get it back.

Government agencies will never ask you to pay by wiring money. Neither will legitimate businesses. If someone insists you pay by wiring money, it’s a scam. Don’t do it. Instead, report it to the Federal Trade Commission at reportfraud.ftc.gov or 1-877-FTC-HELP.

 

Want to help the people you care about avoid a money wiring scam? Watch the short video: Money Wiring Scams

 

Beware of Counterfeit Clothes and Scam Websites

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It’s important to know that there are scam artists out there who will try to take advantage of you. Be on your guard from a new influx of counterfeit clothes and scam websites. The internet has been a great asset to US clothing shoppers looking for good buys on the best brands. Unfortunately, it has also been a great asset to criminals dealing in counterfeit clothes they try to pass off as the real thing. While the illegal market in fake top brand clothing predates the World Wide Web, the Internet has opened up new avenues of opportunity for those dealing in counterfeit clothes.

The United States has seen a large rise in scam websites that typically promise that popular and expensive items of clothing manufactured by the best known brands can be had at bargain prices. They often have fake web addresses that falsely give the impression that they are operating in the US, when in fact the website owners may be scammers operating out of other countries.

The quality of the clothes is often far below the standards set by the real manufacturers, with some websites operating with no actual inventory. Consumers order, their money is accepted, but they never receive anything at all.

The dealing in counterfeit clothes is not some small scale operation. The sums of money involved are huge, with some estimates putting the total take of larger scam websites at millions of dollars per year. The counterfeit clothes racket also ties into other criminal activities, such as banking fraud and identity theft. Once you give a criminal organization your credit card number, there are a wide array of illegal ways it can be used to rob you again.

Because the clothing scam websites are located overseas, it can be all but impossible to complain about poor quality, orders never received or seek relief in the United States legal system. Even reporting the scammers to the law enforcement agencies of the countries from which they operate will seldom bring any results. Sometimes action can be taken to de-register the scam sites so that others won’t get duped, but even this can be ineffective.

The market for counterfeit clothes is not confined to the United States. In Great Britain last year, hundreds of scam shopping websites were closed for selling fake designer clothing and jewelry. In Ireland, poorly made counterfeit clothing became so widespread that the European Consumer Centre made a special plea to consumers to be cautious when buying clothes online.

The center strongly advises “consumers to do comprehensive research on a trader when shopping on the Internet” a spokeswoman said. She continued to suggest that customer look for contact details, as any missing information is a red flag.

It’s also important to know what too look for with counterfeit products. Examine the product as closely as you can online, counterfeit designer goods often have logos that are fuzzy, misspelled, or otherwise off from the brand, something a high quality designer would never allow to ship. The stitching on counterfeit merchandise is often sloppy. If you can see the stitching without much effort, it is nearly guaranteed to be a fake.

Caution should always be used online, but becoming familiar with the genuine product and examining potential deals is one of the best ways to stay safe.

As counterfeit production becomes more elaborate, the proper tags do not necessarily mean a genuine product. As a result, many manufacturers of high quality clothing have taken extra steps to ensure their product stands out. Holographic logos and serial numbers are just a few methods that can ensure a legitimate purchase. Know the designer’s key marks and beware of products that lack them.

Be cautious of high fashion clothing being advertised at greatly reduced prices and only pay using a secure, refundable, method such as a credit card or a secure service such as PayPal.

Make sure you use online retailers that do provide genuine merchandise at a discount. In the end, you’re your own best advocate to prevent getting scammed. Use your common sense and know what you’re buying, and remember the old saying that “if it seems too good to be true, then it probably is.”

IRS Warning About Phone Scams

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scamThe Internal Revenue Service and the Treasury Inspector General for Tax Administration (TIGTA) often hear from taxpayers who have received unsolicited calls from individuals demanding payment while fraudulently claiming to be from the IRS.

“There are clear warning signs about these scams, which continue at high levels throughout the nation,” said the IRS Commissioner. “Taxpayers should remember their first contact with the IRS will not be a call from out of the blue, but through official correspondence sent through the mail. A big red flag for these scams are angry, threatening calls from people who say they are from the IRS and urging immediate payment. This is not how we operate. People should hang up immediately and contact TIGTA or the IRS.”

Additionally, it is important for taxpayers to know that the IRS:

  • Never asks for credit card, debit card, or prepaid card information over the telephone.
  • Never insists that taxpayers use a specific payment method to pay tax obligations
  • Never requests immediate payment over the telephone and will not take enforcement action immediately following a phone conversation. Taxpayers usually receive prior notification of IRS enforcement action involving IRS tax liens or levies.

Potential phone scam victims may be told that they owe money that must be paid immediately to the IRS or they are entitled to big refunds. When unsuccessful the first time, sometimes phone scammers call back trying a new strategy.

Other characteristics of these scams include:

  • Scammers use fake names and IRS badge numbers. They generally use common names and surnames to identify themselves.
  • Scammers may be able to recite the last four digits of a victim’s Social Security number.
  • Scammers spoof the IRS toll-free number on caller ID to make it appear that it’s the IRS calling.
  • Scammers sometimes send bogus IRS emails to some victims to support their bogus calls.
  • Victims hear background noise of other calls being conducted to mimic a call site.
  • After threatening victims with jail time or driver’s license revocation, scammers hang up and others soon call back pretending to be from the local police or DMV, and the caller ID supports their claim.

If you get a phone call from someone claiming to be from the IRS, here’s what you should do:

  • If you know you owe taxes or you think you might owe taxes, call the IRS at 1.800.829.1040. The IRS employees at that line can help you with a payment issue, if there really is such an issue.
  • If you know you don’t owe taxes or have no reason to think that you owe any taxes (for example, you’ve never received a bill or the caller made some bogus threats as described above), then call and report the incident to TIGTA at 1.800.366.4484.
  • You can file a complaint using the FTC Complaint Assistant; choose “Other” and then “Imposter Scams.” If the complaint involves someone impersonating the IRS, include the words “IRS Telephone Scam” in the notes.

Taxpayers should be aware that there are other unrelated scams (such as a lottery sweepstakes) and solicitations (such as debt relief), that also fraudulently claim to be from the IRS.

The IRS encourages taxpayers to be vigilant against phone and email scams that use the IRS as a lure. The IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels. The IRS also does not ask for PINs, passwords or similar confidential access information for credit card, bank or other financial accounts. Recipients should not open any attachments or click on any links contained in the message. Instead, forward the email to phishing@irs.gov.

For more information or to report a scam, go to www.irs.gov and type “scam” in the search box. More information on how to report phishing scams involving the IRS is available on the genuine IRS website, IRS.gov.

Summer Vacation Scams: Possible Hazards of Hoteling

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Customers paying at the hotelBooking a hotel stay for a summer vacation? Before you check in, check out how scammers can try to take advantage of travelers.  Always be aware and on the lookout for possible scams!

The late night call from the front desk.

You think you’re getting a late night call from the front desk telling you there’s a problem with your credit card and they need to verify the number, so you read it to them over the phone. But it’s really a scammer on the line. If a hotel really had an issue with your card, they would ask you to come to the front desk.

The pizza delivery deal.

In another scam, you find a pizza delivery flyer slipped under your hotel door. You call to order, and they take your credit card number over the phone. But the flyer is a fake, and a scammer now has your info. Before you order, make sure you check out the business (ensure it’s a franchise or reputable), or get food recommendations from the front desk.

The fake Wi-Fi network.

You search for Wi-Fi networks and find one with the hotel’s name. But it turns out it’s only a sound-alike and has nothing to do with the hotel. By using it, you could give a scammer access to your information. Check with the hotel to make sure you’re using the authorized network before you connect. Read more tips on using public Wi-Fi networks.

Other things to be cautious of when staying at or booking a hotel stay:

  • Always lock your car, and don’t leave anything valuable in your vehicle and/or visible.
  • Try to park your car as close to the front office of the hotel as possible.
  • Don’t leave anything valuable in your room unless there is a secure way to do it (like an in-room safe).
  • Check your credit card statement after your stay to make sure it’s accurate.
  • Be weary of hotel booking websites – there have been instances of advertisements claiming that for booking a hotel room you can receive a complimentary gift card from a known retailer. When clicked on, the scammers will oftentimes ask for a credit card number and more personal info.

Haven’t booked your trip yet? If you’re thinking of getting a vacation rental, take a moment to read up about rental listing scams. And check out these other travel tips, including tell-tale signs that a travel offer or prize might be a scam.

Turn the Lights Out on Fake Utility Bill Collectors

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Phone scamThe caller sounds convincing: If you don’t pay your utility bills immediately, your gas, electricity or water will be shut off, and then they ask you to pay using a specific and unusual method.

Be warned: The call probably is a scam.

The Federal Trade Commission, state and local consumer protection agencies, and utility companies have gotten a slew of complaints from consumers about utility bill scams.

Here are a few signs you may be dealing with a scammer:

  • You get a call or an email claiming your services will be cut off unless you call a number or click on a link and give your account information. Most utility companies don’t ask you to send your account information by email.
  • Someone calls demanding you wire the money or use a prepaid or reloadable debit or gift card to pay your bill. Legitimate companies don’t demand you use those methods to pay.
  • The caller tells you to call a phone number and give your credit, debit, or prepaid card number. If you do that, the scammer can access the money from your credit, debit, or prepaid card, and you can’t trace where your money went. Once it’s gone, it’s gone.

If you get a call from someone threatening to shut off your utility service:

  • Make sure you’re dealing with your utility company before you pay any amount. Call the company using a number you’ve looked up. Or go to their website to determine the status of your account. Confirm where and how to pay your bill. Don’t give out your account information on the phone unless you place or expect the call.
  • Never wire money to someone you don’t know, regardless of the situation. Once you wire money, you cannot get it back.
  • Do not click links or call numbers that appear in unexpected emails or texts, especially those asking for your account information. If you click on a link, your computer could become infected with malware, including viruses that can steal your information and ruin your computer.
  • If you are falling behind on your utility bill, contact the utility company and see if they can work with you to come up with a payment plan and a way to keep your service on.

If you think a fake utility bill collector or any other scammer has contacted you, file a report with the FTC and your state consumer protection agency.