Learn how to avoid the most common swindles-from high-tech password theft to low-tech door-to-door hustles.
by Susan Stellin
- Social-Networking Rackets
The rip-off: Websites like Facebook have become fertile ground for scam artists who hijack members' accounts to spread viruses and spam. Via news feeds and messages, they distribute videos or phony gift certificates that appear to be from friends but, when downloaded, install damaging software on your computer. Two cons going around Facebook this year: a page offering a $1,000 Ikea gift card in exchange for your personal information; and messages asking for money, supposedly from friends in trouble who are traveling overseas. These scams can spread through e-mail, too. A recent one, a bogus coupon for a free bag of Doritos, did not harbor a virus, but it did cause Frito-Lay a big headache.
The tip-off: Although lots of legitimate companies send customers special offers by e-mail and use Facebook to market promotions, these deals rarely involve opening an attachment. As for those $1,000 or $500 gift cards? Facebook warns members on its security page (facebook.com/security) to be wary when overly generous offers are dangled in front of you. And any request for money should set off alarms. Last year Erin Fry, 41, of Chelsea, Michigan, received a Facebook message supposedly from her mother saying that she had been robbed while on vacation, along with a plea for money. "I knew my mother wasn't in Europe," says Fry, "but some of her friends who also received the message thought the request was legitimate, since my parents do travel frequently. Luckily no one sent any money."
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How to protect yourself: Don't be seduced into opening an attachment unless you're absolutely certain of its origin. If the offer or video is tempting and it seems legit, first peruse websites like Snopes.com (a fact-checking source for Internet rumors) and Consumerist.com (a consumer-advocacy website); they're quick to publish news about fake deals and viruses making the rounds (no, the Olive Garden did not recently offer Facebook "fans" $500 gift cards). You can also go to the Coupon Information Corporation (cents-off.com), which lists counterfeit coupons. To avoid catching a virus-or getting scammed-on Facebook, don't click on links in messages from friends that seem out of character, especially ones soliciting money. Would a friend really use social media to ask to borrow cash? Probably not.
- Phishing for Passwords
The rip-off: Some fraudsters try to trick you into revealing personal information, like passwords, credit-card numbers, and account details, by pretending to be your bank or credit union or a government agency. This crime is so commonplace that it has its own name, phishing. How do these crooks do it? Often you'll receive an e-mail or a text message that appears to be from your financial institution that says your password needs to be reset or you need to update your account information. Instead, you might be directed to a website to fill out a form that is set up for the purpose of stealing your personal data. Or you might receive a recorded phone call asking you to call back a number and enter your account details via an automated system. (This version of the scam is called smishing.) Think you would never be taken in? Consumer Reports estimates that 1 million households gave phishers confidential material within the last two years, leading to estimated losses of $650 million.
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The tip-off: It's not easy to sniff out these scammers, since they are so tech-savvy. "Some phony phishing websites use logos and text copied from genuine bank sites," says Sid Kirchheimer, author of Scam-Proof Your Life (Sterling, $16, amazon.com). Swindlers can even program their phones so that an actual bank's name shows up on your caller I.D.
How to protect yourself: If you get a call that's supposedly from your lender-which might happen, especially if you're traveling and they are concerned about any unusual purchases-hang up and call the number listed on your bank statement or credit or debit card. If you have doubts about a text or an e-mail that you receive, delete it. Then phone your bank to resolve any questions and to notify it about a possible scam.
- Shady Online Sellers
The rip-off: Say you buy something online and it never arrives, or the item isn't what you thought you were buying. You're not (remotely) alone. This type of fraud continues to be one of the top complaints tracked by the Internet Crime Complaint Center, a partnership between the Federal Bureau of Investigation and the National White Collar Crime Center, a nonprofit that helps law-enforcement agencies com-bat financial and high-tech crimes. It happened to Stephanie Welbourn, 27. She used Craigslist to buy tickets to see the musical Wicked on Broadway last December. When she and her mother got to the theater, they found out the tickets were fake-after paying $240 for the pair. "I felt sick to my stomach," says Welbourn. "I thought I had checked everything out."
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The tip-off: According to Welbourn, the tickets looked completely legitimate: They had a bar code, the terms and conditions were printed on the back, and they were even perforated where the stub would be torn off. The only giveaway was that one digit in the theater's street address was wrong. Buying tickets from a reseller is always risky. And Craigslist is a hotbed for scammers, who thrive on the site's anonymity. If a seller gives you just a cell-phone number (not a land line), which is the only contact info Welbourn had, that should be a red flag. Why? Cell phones can't always be tracked. Other signs of a dubious deal: a seller who asks you to wire money, a retail website that doesn't list an address or a phone number, and a company name that doesn't have much of a presence or any reviews online.
How to protect yourself: Verify that the item you're purchasing on Craigslist (or any reseller website) is genuine and will function as advertised. If there's no way to do this, just don't buy it. (For example, if you're purchasing tickets and the seller won't meet you at the theater or arena and wait to be paid once the tickets scan, don't hand over the cash.) And confirm the seller's name and address before you meet-always in a public place-so you have contact information in case things go awry and you need to report the fraud. With online retailers, always research the site's return policy before hitting the checkout button, and pay with a credit card so you can dispute the charge if there is a problem later on.
- Charity Cons
The rip-off: Every time there's a disaster, like the earthquake in Haiti or the oil spill in the Gulf, bogus charities arise. They pretend to seek donations for the relief effort, then pocket the money themselves.
The tip-off: Be suspicious of any organizations you've never heard of that request money through e-mail or social-networking sites. And scrutinize charity names carefully. Like phishers, these scammers are sophisticated about impersonating well-known entities, sometimes using a name or a Web address that sounds like a recognizable nonprofit, such as America's Red Cross instead of the American Red Cross.
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How to protect yourself: Stick with charities that have received tax-exempt status from the Internal Revenue Service. Ask them to e-mail you a copy of their charitable-status letter. Or go to irs.gov/charities to verify a group's nonprofit status. You can also search the Better Business Bureau's Wise Giving Alliance (bbb.org), which evaluates charities based on criteria such as percentage of donations going to overhead costs and percentage going to victims. To report suspicious solicitations, contact the National Center for Disaster Fraud (firstname.lastname@example.org), established by the U.S. Department of Justice after Hurricane Katrina to investigate criminals who target donors.
- Vacation-Rental Ruses
The rip-off: Fraudsters post a home to rent, but it doesn't really exist...keep reading about scams even you could fall for.
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