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Consumer Scams
Presented By
State’s Chief Consumer Advocate
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Purpose of Consumer Protection Division
Represent and protect the State, its subdivisions, legitimate business community, and general public as
consumers.
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Mediates consumer complaints
Investigates violations of the
law
Reports results
Advocates for consumers
Educates consumers and businesses about fair business practices
Prosecutes civil cases on behalf of the consumer
public
What Does Consumer Protection Do?
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Wire transfer scams
Charity scams
Internet auction fraud
Smishing, phishing and pharming
IRS phone scam
Tech support scam
Prize promotions
Junk mail
ID theft
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Wire Transfer Scams
Scammers come up with all kinds of convincing stories to get your money. Many of these methods involve wiring money through money transfer services like Western Union or MoneyGram.
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Why Money Transfers?
It’s like sending cash: the scammers get the money quickly, and you can’t get it back.
Typically, there’s no way to reverse a money transfer or trace the money.
Money wired to another county can be picked up at multiple locations, making it impossible to identify or track down the recipient.
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Common Wire Scams
International Lottery and Sweepstakes
Sweetheart Scam
Favorite Grandson Scam
Counterfeit Check Scam
Employment Offers
Mystery Shopper Scam
Work‐at‐Home Scam
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• You receive a phone call or letter stating that you have won a lottery or sweepstakes.
• To receive your winnings ‐‐ all you have to do is pay “taxes” or “processing fees” via a wire transfer.
• In some cases, the letter will be accompanied by a counterfeit check, which you will be asked to deposit in your bank account.
International lottery and sweepstakes
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• You meet someone through email or a dating website. As the relationship progresses, the scammer will tell you that they must go to another country for work.
• Once there, the scammer will need your help to assist with travel needs, unexpected medical expenses.
• The first request will be small, but it will be followed by requests for additional funds – always with the promise to pay you back.
• The scammer may email documents or have an “attorney” call you with proof.
Sweetheart scam
As real as the relationship may seem, it is a scam.
You will have lost any money you wired, and the person you thought you knew so well will be gone with it.
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Favorite Grandson Scam•You receive an unexpected telephone call from someone claiming to be a friend of a family member, usually a grandchild, niece or nephew.
• The caller asks you to wire money to assist the grandchild out of a jam – to fix a car, get out of jail, pay a hospital bill, or leave a foreign country.
• The caller will also tell you that the grandson doesn’t want anyone else in the family to know.
Ask the caller questions that only the family member would know.
Verify the claim with other family members.
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• Can be utilized in conjunction with other types of scams.
• You will be asked to deposit the check you receive into your checking account and wire a smaller sum of money back to the sender of the check.
• The check will bounce.• Because you withdrew money from your account and then wired it, you are on the hook for the bounced check and any fees.
Counterfeit check
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• Mystery Shopper• The scammer may ask you to pay a fee to obtain certification information or to “register.”
• You should never have to pay a fee, and the certification will be worthless.
• Work‐at‐Home• The scammer will ask you to pay for a starter kit or a useless certification.
• Once you pay, the scammer will continue to market additional “tools” to get your business off the ground.
Employment offers
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• Do you recognize the name of the charity?
• Ask if the solicitor is employed by a paid fundraiser.
• Ask to see identification.• Ask what percentage of your donation will be used by the charity and how much will be retained by the fundraiser.
• Don’t feel pressured to donate immediately.
• Call the organization or research it online.• Be on the lookout for similar sounding charity names.
Charity fraud
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• Overpayment Scam: A legitimate seller advertises an item, and the scammer sends a counterfeit check or money order for an amount greater than the item. The scammer asks the seller to deposit the payment, deduct the actual sale price, and return the difference to a shipper or handler.
•Wire Transfer Scam: The scammer advertises a fraudulent item. When a legitimate purchaser contacts the scammer, they are asked to wire money to complete the purchase.
• Second‐Chance Scam: When a legitimate purchaser loses a bid on a legitimate auction, a scammer may offer an opportunity to purchase the item for a price that is less than the losing bid. The scammer will ask the buyer to wire the money.
Internet auction fraud
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IRS Phone Scam • Review the seller’s feedback on the auction site.
• Understand the refund, return, and warranty policies of the site.
• Be cautious with out‐of‐country buyers or sellers.
• If the seller wants to use an escrow service, ensure it is legitimate.
• Consider insuring your purchased item.
• Avoid unsolicited offers.
How to navigate
an internet auction and avoid being
scammed
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• You receive a phone call from the “IRS” demanding that you pay back taxes immediately to avoid being arrested.
IRS phone scam
• If you owe the IRS money, they will communicate with you via mail first.
• The IRS will never demand payment without first giving you the opportunity for questions or appeal.
No government entity will call and
ask for your personal financial information
through an unsolicited phone
call.
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• The solicitation may be through a phone call, an email, or a pop‐up ad.
• The scammer will claim that your computer is infected with a virus and that they can assist you in fixing it.
• Often they will claim to be from a reputable software company.
Tech support scam
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• A form of fraud in which the scammer tries to learn information such as login credentials or account information by masquerading as a reputable entity or person in email, instant messenger, or other communication channels
What is phishing?
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• Phishing emails are designed to look like legitimate companies you are already doing business with (banks, eBay, credit card companies, etc.).
• The email will request that you follow a link and enter your login credentials into what appears to be a legitimate webpage.
How can I tell if it
is phishing?
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• The fraudulent website will capture your information when you login.
• The scammer will then use that information to access the actual account.
• This may result in theft of the account’s contents, or provide access to additional information that the scammer can use against you.
How does
phishing work?
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•“Smishing” is phishing that occurs over text messages.
Smishing
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•“Pharming” is phishing that occurs via a pop‐up window on your computer.
Pharming
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• Do not give your name, address, or other contact information to telemarketers.
• Never wire money based on an unsolicited phone call. Wiring money is like sending cash.
• Never agree to deposit a check from someone you don’t know and then wire money back to that person.
• Never pay money to get money from a lottery or sweepstakes.
• Phone numbers on Caller ID can be deceptive.
Tips to avoid scams
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• If you are scammed by mail, send documentation or counterfeit check to the U.S. Postal Inspection Service at P.O. Box 15058, Little Rock, AR 72231; call (877) 876‐2455; or go to postalinspectors.uspis.gov.
• File a report with your local law enforcement office.
• If you are scammed via the internet, report the scam to iC3.gov, a partnership between the Federal Bureau of Investigation and the National White Collar Crime Center.
• If you are scammed via wire fraud, contact Moneygram at (800) 666‐3947 or [email protected] or Western Union at (800) 448‐1492.
If you become a victim
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• Tell you the odds of winning.• Tell you what you pay or the conditions to receive the prize.
• Not imply that you won or are close to winning unless it is true.
• Not require you to purchase something to enter the contest.
• Not represent that they are endorsed by or associated with the government.
Prize promotions
–Promoters must:
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• Call 1‐888‐5OPTOUT (1‐888‐567‐8688). Once you provide your name, address, and social security number, you will be able to “Opt Out” for 5 years or for life. This removes your name from mailing lists.
• Visit the websites of the Direct Marketers Association and the U.S. Postal Service to educate yourself about junk mail.
Cut down on junk mail
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