Be mindful of many types of fraud schemes

Posted Oct. 17, 2010, at 7:49 p.m.

I’m going to lie to you, and that’s wrong. Then I’m going to take your money, and that’s wrong again.

By lying and taking your money, I’ve just committed fraud. It’s happening to millions of Americans each year and costing them hundreds of millions of dollars.

A new high-tech scheme involves tying up personal or business phone lines using software that hackers use to raid computers. This is preceded by social engineering or malware to elicit some personal information from the victim.

Once the phone attack begins, the criminals can contact the victims’ banks, pose as the victim and withdraw funds; they may also list their phone numbers as a new customer contact. The bank might call to verify the transaction and, because of the phone attack, be unable to get through or reach only the criminal. By the time the crime is discovered, it’s too late.

Work-at-home schemes are all over the Internet these days. A couple of them, noted recently by computer expert Kim Komando (, attempt to turn victims into co-conspirators. The money mule scam seeks people to launder money for criminal enterprises, although the proposal sounds legitimate. The reshipping mule uses the victim’s good name to move stolen goods. Both are illegal and should be avoided.

The most common fraud cases are mass marketing schemes. The victim may be promised something of value and instead wind up being taken. The sheer volume of mass marketing helps to mask the small percentage of pitches that are fraudulent.

One common type of fraud is the advance fee scheme. You are promised a prize or gift, but first you must send money to cover some fee. After the money disappears, so does the promised prize.

In an overpayment fraud, a victim who has advertised an item for sale is contacted by a scam artist, who sends a check for more than the asking price. The victim is told to cash the check, deduct the sale amount plus any expenses and return the balance to the sender. Only later does the victim realize that he or she is stuck for the entire amount, since the scammer’s check was bogus.

Tipoffs include phony addresses of real or fake companies on the check, bank names that don’t match their addresses, and check amounts that far exceed an asking price. On the other hand, the quality of paper used in the check may be excellent, and the check may include watermarks and other features that appear to deter fraud.

In a recovery scheme, a victim may be approached by someone posing as a law enforcement officer, lawyer or government employee. This person claims that a perpetrator of fraud has been captured and bank accounts seized. All you (the victim of an earlier fraud) need do is pay a fee of some sort … and you’re the victim all over again.

While the Nigerian letter and foreign sweepstakes frauds have been widely publicized, they’re still taking people in. The Nigerian letter might ask an American to help get funds out of Nigeria for some allegedly good purpose; it might also include a counterfeit check the victim can “cash” to pay some “necessary fees.” The foreign sweeps letter informs someone who never entered the lottery of a supposed big win, again requiring an upfront fee yielding nothing.

For tips on avoiding fraud schemes, visit the Federal Bureau of Investigation’s website,

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s membership-funded, nonprofit consumer organization. Individual and business memberships are available at modest rates. For assistance with consumer-related issues, including consumer fraud and identity theft, or for more information, write: Consumer Forum, P.O. Box 486, Brewer 04412, or go to