Protect Yourself from Criminals by Knowing Their Financial Scams


By James Lint
Faculty Member, School of Business, American Military University
Senior Editor for In Cyber Defense and Contributor, In Homeland Security

Financial criminals have many ways to get rich and make you poor. In fact, they have found many new ways to take your money.

Amazingly, most people have forgotten the classic techniques that criminals use to separate you from your money.

In the past, you might have received a letter in your mailbox from a Nigerian prince who wants you as a business partner in a can’t-miss investment or an email from a lawyer working on an inheritance that will give you great wealth. All you have to do is send money for processing fees and you will quickly strike it rich.

If you get mail that requests you send money to receive a valuable prize or to inherit a large sum of money, it is probably a mass mail scam. The Department of Justice (DOJ) “Mass Mail Fraud Prevention Initiative” provides several clues to make citizens aware of this fraud, which often targets the elderly.

Nowadays, criminals save money on stationery and stamps by using the Web to send emails or try to scam victims over the phone.

Last month, a Cyber Security Awareness Lunch and Learn event in Las Vegas hosted by MJ Computer Concepts featured a speaker from the Financial Crimes division of the Las Vegas Metropolitan Police Department.

This law enforcement officer, who did not want to be named, began his talk with a simple reminder that anything that identifies you – Social Security numbers, bank account numbers and passwords – are targets for criminals to use for their benefit.

Some of the current scams he discussed include:

Remote Access to Help Fix Your Computer Scam:

In this scam, you receive a phone call claiming to come from a large software company (often falsely identified as Microsoft). The speaker says your computer software needs to be fixed or upgraded once you give the phone “technician” remote access to your computer.

The best protection against this scam is to just hang up. If you allow scammers to remotely access your computer, you have given them the keys to your virtual home and online personal data.

Threat of Immediate Arrest Scam:

Phone scammers often attempt to extort money by calling you and saying that the local police or FBI has a warrant for your arrest. To avoid going to jail, you can simply wire the amount of the fine through Western Union MoneyGram or by buying a prepaid credit card (like Green Dot), registering it online and sending it to an address operated by the scammers.

Fake IRS Tax Payment Scam:

In a 2013 press release, the Internal Revenue Service “warned consumers about a sophisticated phone scam targeting taxpayers, including recent immigrants throughout the country. Victims are told they owe money to the IRS and it must be paid promptly through a pre-loaded debit card or wire transfer.”

“Rest assured, we do not and will not ask for credit card numbers over the phone, nor request a prepaid debit card or wire transfer,” IRS Acting Commissioner Danny Werfel says in the IRS notice. “If someone unexpectedly calls claiming to be from the IRS and threatens police arrest, deportation or license revocation if you don’t pay immediately, that is a sign that it really isn’t the IRS calling.” Werfel says the first actual IRS contact with taxpayers on a tax issue is likely to occur via USPS mail.

The key indicators of this scam are that the IRS does not call taxpayers or ask for credit card numbers or pre-loaded debit cards. Criminals ask for preloaded debit cards because they can then withdraw funds from your account and you cannot go to your bank to report fraud.

Counteractions and Protection Against Financial Scams:

We all should report crime when we see it. The more reports that law enforcement authorities receive, the better they can understand scams and protect the public by making an arrest.

The FBI Internet Crime Complaint Center (IC3) has an easy way to report computer crimes on its website. The site explains how to acquire email headers and other information that can help solve scammer crimes.