Scammers

Partly inspired by the previous post about bomb-non-detectors, I'm expanding into general frauds.



Account take-over fraud

Broadly speaking, someone impersonating you will telephone your bank, give the right answers, and transfer the money in your account to their own, then withdraw it.

Alternatively, they may obtain fake ID in your name, open a joint account with a confederate, then transfer the money across, leaving the hapless confederate to go to a branch and attempt to withdraw £10,000 in cash. That didn't work too well, the confederate got two years inside.

MORAL OF THE STORY: Have passwords that are difficult to guess (no pet's names, kid's names, dates of birth, address, 1066, 1966, 1945, etc.)

This type of fraud is similar, but distinct from...



Identity theft

Someone assumes your identity, obtains official documents, bank accounts, etc. and eventually arrives in a position where they may apply for credit in your name. They do so, taking the money, and allowing you to clear up the mess. Forget the mortgage, you probably won't be able to a mobile phone until this one gets cleared up. Even *attempts* at ID fraud will show up on your credit record, as it is usually committed by applying for credit.

MORAL OF THE STORY: Shred ALL personal correspondence before disposing of it. Guard your personal data with your life. It's not paranoia if they're really after you. I've opened a bank account before now using nothing but a mailshot about car insurance. It's harder these days, but not by much.



Advanced fee fraud

The 'classic' or 419 scam. 419 is the provision of the Nigerian Penal Code prohibiting such behaviour in Nigeria. Most of the fraud is from Nigeria, for some reason. 419eater.com is worth a read if you have a spare afternoon and need a laugh.

How does it work? First, the carrot -- a cash lottery prize, a suitcase full of money, a box of gems, gold bullion, money in escrow accounts, whatever. The hook is, they want to share it with YOU, yes YOU.

Touched, you correspond at length. It turns out they need to bribe customs officials / pay registration fees / whatever. Would you please wire the money to me, by Western Union? Ta. Needless to say, you never hear from them again.

MORAL OF THE STORY: If it sounds too good to be true, it is.



Deposit fraud

Particularly relevant for flat-hunters or car-buyers, this one. You see a nice one, cheap, good area / low miles (alarm bells should be ringing already...).

Anyway, they want to show it to serious punters only, so prove you've got the money for the deposit please. How? Oh, why don't you just wire some money to your mate, by Western Union, and email me a picture of the confirmation slip?

You do so, and they just take the money -- the picture of the confirmation code is all they need. Off they trot to their local Western Union branch, and jackpot!

MORAL OF THE STORY: avoid Western Union like the plague.



Cheque fraud

Many and various forms. Generic principle: the fraudster must engineer a situation by which you need to give him some money or valuable object, like a car. This may be by overpaying you for something, the excess to be sent to him from your account. This may be by him giving you a cheque in exchange for your nice motor vehicle.

In all variations, your money / valuable consideration is handed over against a cheque. This cheque will be stolen or forged. The money will appear on your bank account. Many banks call this 'pre-clearing' or some such rubbish. It's nothing of the sort. The cheque can be reversed up to a week later, and the money will magically disappear. By which point, of course, your money is long gone.

MORAL OF THE STORY: nothing valuable should leave your possession until the cheque has cleared. A UK cheque takes SEVEN WORKING DAYS to clear. Even electronic transfers can be reversed on occasion. Cheques drawn on foreign banks take MUCH longer.



And finally, in reply to one of the comments on the previous post, about cheque fraud...

Arnold, saying 'you don't have to be stupid or greedy to fall for a scam' is not entirely accurate. The lawyer scam you mention, is in fact entirely typical. The fraudster contacts a lawyer purporting to be a director at a prestigious company. The lawyer checks it out online, it looks good, mentions in newspapers, etc.

They need help collecting debts from recalcitrant clients of their, which funds are then to be forwarded on to the company.

They give contact details of the 'non-paying customer', who is, of course, the fraudster by any other name. They 'pay up' using a stolen or otherwise fraudulent cheque.

The money goes into the lawyer's account, AND THE LAWYER FORWARDS THE MONEY TO THE COMPANY WITHOUT THE CHEQUE HAVING FULLY CLEARED.

I've put the stupid bit in capitals to help you out. Actually, the really stupid bit is not checking the client out properly. Best thing is to ask for a name, call the listed number for the company, and ring them, asking to be put through. If it's a scam, "no-one by that name works here, I'm sorry", if not, one satisfied client, impressed by his cautious and thorough lawyer.

The lawyer described himself in the following terms; "I'm a capital 'D' Dumbass". For a man with 23 years' experience, that's probably a little harsh, or at least I hope so, for his clients' sakes. He dropped his guard, and didn't verify a client's identity. And it cost him $182,500. Ouch.

MORAL OF THE STORY: Be careful, everyone.