Fraudsters use ‘local’ ties to pull in victims

Date Published: 
July 29,2011

A Frankford couple this week reported an online scam that they said took more than $200 from their bank account.

Using the allegedly “true” story of a Dagsboro woman who had purportedly made thousands of dollars by posting information via the Internet, the related Web site offered support for the claim through links supposedly to major news sources (including CNN) covering the story of this amazing way to earn money with easy work from home. (Danger! Danger, Will Robinson!)

Visitors are enticed to find out how they can do it themselves, for the paltry sum of $2.99, paid by credit card. (Warning bells should be going off here…)

Figuring that $2.99 was a small risk to take for potential great rewards and engaged by the local connection, the victims in this case completed the purchase process for the supposed information package, using their debit card. That day, charges for two credit-report-related items – about $40 total – were placed on their account. Days later, $140 was charged. Days after that, two more credit-report-related charges were made, at another $40.

Since the victims in this case weren’t keeping close tabs on their accounts, they didn’t notice the problem until the third set of charges had been made, leaving them more than $200 light on funds – a big hit for a family during tough times. They did immediately contact their bank once the problem was discovered. They were advised to cut up their debit card and file a report with their local bank branch.

The good news in this case is that the victims’ bank promised to refund the lost money in its entirety. (Some banks limit customers’ liability to $50 and cover everything above that, assuming they are notified in a timely manner. Check with your bank for their policy on fraud.) A few days after filing a fraud report, they expect to have that money returned.

The bad news is that – particularly as there is some indication that credit-related items were purchased by this fraudster – these victims may have to be particularly careful of identity or credit theft related to this scam. The banking and other information attached to their “purchase” could aid an identity or credit thief in applying for credit in their names or in transferring existing credit accounts to the fraudsters’ control.

A credit freeze might be an advisable option for these victims, to prevent anyone from taking out credit in their names without strong evidence that they are who they say they are. Requests to the various credit reporting bureaus can let them check whether identity or credit theft has happened or been attempted, as well as putting a freeze on their credit to prevent that in the near future.

Lessons to be learned, or reminded of:

• If something sounds too good to be true, it probably is. (Time-worn, but still true!) Anything promising easy work that yields major income should be suspect.

• Make sure the source you’re using isn’t hiding something. If the site links to a story on CNN (or another trusted site), hover over the link to make sure it does indeed go to CNN.com, and only then follow the link to see what the story says.

It’s also easy for a “make big bucks” site to tell you it’s been “featured on CNN.” What you may not know is that it was featured on CNN because of reported fraud and other poor business practices. Do your homework, including searching for reports of fraud or scams connected with the business and the keywords related to it.

• Avoid using a debit card for purchases that are not made in person or from a well-trusted company, as any charges are immediately withdrawn from your account and some banks may be less likely to refund fraudulent charges than credit card companies.

• Don’t trust an unknown source’s word on what they will be charging to your card or what they will provide. They may flat-out lie to you, saying they’ll charge a tiny amount for a product – or the shipping costs for a product sample – but then take as much as they can get. They may also deceive you by using fine-print or hidden statements to technically get your permission to charge you for a subscription to a service or product that you could have difficulty stopping once you realize they’re still charging you.

Use only trusted businesses when doing anything online that requires you to give out your account or other personal information. If you’re not sure if they’re trustworthy, research them first. If there are reports of problems, it’s probably best to steer clear, no matter how good the deal may seem.

• Keep a close eye on your bank and credit card accounts, checking for incorrect or fraudulent charges. The sooner these are reported, the better, as timely notification to a bank can prevent additional fraudulent charges.

• Also keep an eye on your credit reports. Any unfamiliar accounts showing up should be checked into and contested if they are not yours. You can get one free credit report per year for each of the credit-reporting agencies.

Don’t just go online and look for “free credit report.” Most of these “free” reports are offered through paid services that charge a monthly or yearly fee (whether you realize it or not). Rather, the Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies — Equifax, Experian and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months.

To order one, visit annualcreditreport.com, call 1-877-322-8228, or complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. The form is available online at ftc.gov/credit. Do not contact the three nationwide consumer reporting companies individually. They are providing free annual credit reports only through the above contact methods.

Additionally, if you are rejected for credit (or for a job, due to poor credit), you have a right to ask at that time for a report on why you were rejected, complete with the supporting credit report documents. If you’ve been negatively impacted by a credit or identity thief, this may be the first way you find out what’s happened. Follow up on any credit rejections to make sure that’s not the case, or to help you get on your way to repairing legitimate credit-score dings.