Scam of the day – July 18, 2014 – Facebook lottery scam

Lottery scams are one of the most common scams and with good reason.  They are effective.  Scammers will notify people that they have won a lottery and then often inform the victim that they need to pay administrative fees or income taxes in order to claim their prize.  Other times they will actually be sent what appears to be a certified check and told to deposit into their checking account and then send the administrative fees back to the lottery sponsor.  In all of these phony lotteries there is no prize.  Even when you are provided with a certified check, it is counterfeit and will bounce, but not until you have already sent your check or wired money to the scammer.  Recently many people including a woman in North Carolina received a friend request on Facebook from someone claiming that they are a Facebook administrator and telling the victim that they had won a Facebook lottery.  All they had to do in order to claim their prize was to wire  funds, in the case of the North Carolina woman, it was $350 to the lottery sponsor.  She sent the money as do other victims, but none of them ever received a dime.


You will never win a lottery you did not enter so when you are informed that you have won a lottery that you have not entered, you should be extremely skeptical.  In addition, legitimate lotteries never ask you for administrative fees or income tax payments in order to claim your prize.  In regard to income tax payments, although lottery winnings are subject to income taxes, either the lottery sponsor deducts your taxes before giving you your  money or it pays you the full amount and you are responsible for paying the IRS.  Legitimate lotteries never collect taxes for the IRS.  As for phony certified checks, you should remember that when you deposit a check, your bank will give you provisional credit after a few days, which may look like the check has cleared.  But it is not.  And when  a counterfeit check later bounces, the funds are removed from your account.  Facebook’s extreme popularity makes it a fertile target for scammers so be wary of people that you do not know asking to be your friends.

Scam of the day – July 9, 2014 – Spoofing scam

Spoofing is a funny sounding word, but there is nothing funny about spoofing, which is the name for the scam tactic used by scammers by which they are able to fool your caller ID such that when you receive a call, it appears to come from a legitimate company, governmental agency, such as the IRS or even your own telephone number.  Sometimes the spoofed calls are automated robocalls in which you are asked for financial information in order to assist you in obtaining a lower interest on your credit card or some tempting ruse.  Other times there will actually be someone on the line purporting to be from a legitimate company or governmental agency.  Using either the carrot or stick approach, they either try to instill fear in you in order to lure you into providing personal information in order to avoid a problem with your bank, the IRS or some other entity or they use the carrot and try to entice you to provide your personal information in order to receive a prize or some other financial benefit.  In all cases you risk identity theft when you provide personal information by phone in response to any telephone call you receive.


There are some basic precepts to remember to help protect you from being scammed by spoofed calls.  First, remember that your caller ID is not fool proof.  You cannot trust your caller ID to accurately inform you as to who is really calling you.  Second, the IRS does not initiate contact with taxpayers by email, text messages or phone calls so if you receive such a communication, you can be sure that it is a scam.  Third, robocalls are illegal except from charities or politicians so whenever you receive a robocall that purports to be from a company or governmental agency, you can be sure it is a scam.  You should never provide personal information to anyone over the phone whom you have not called.  If you ever receive a communication requesting personal information and you think it might possibly be legitimate, merely hang up and call the entity back at a number that you know is accurate and even then do not provide personal information unless there is a real need for it.

Scam of the day – June 26, 2014 – Hedge funds hacked

Hedge funds are aggressively managed investment portfolios that are largely unregulated.   They generally are used by only the wealthiest of people.  They also have become a ripe target for hackers who, according to a recent report by computer security firm BAE System, have been hacking into the computers of these funds and causing financial harm in a multitude of ways.  According to BAE, one unnamed hedge fund lost millions of dollars after hackers managed to infiltrate their computers through simple spear phishing tactics by which the hackers tricked hedge fund employees into clicking on links in infected emails that downloaded malware into the hedge fund’s computers that enabled the hackers to learn about impending trades and then delay the trades while the hackers traded first based upon the stolen information.   Another way that the hedge funds have been attacked is through the ransomware  program Cryptolocker, about which I warned you repeatedly since November of 2013.  Cryptolocker is a type of malware that infects the computer of the unwary victim and encrypts all of the victim’s data making it unusable unless they pay a ransom to the criminal hacker.


The financial industry as a whole has not taken sufficient security precautions and steps to protect themselves and our economy from the attacks of scammers, hackers and identity thieves.  Just because you have not heard of many of these hackings as much as with high profile hackings of Target and other companies is very much because quite often the companies do not disclose that they have been hacked.  The hedge fund industry’s sophisticated digital trading systems have become attractive targets to hackers and the hedge fund industry has not taken the necessary security steps to protect the integrity of their business from attack.  Unfortunately, this type of crime is something that is going to get worse before it gets better.  Whenever you are investing your money with a company, you should first inquire as to the security steps taken by the company.

Scam of the day – November 7, 2012 – Disaster investment scams

Following in the wake of Hurricane Sandy and tonight’s projected Nor’Easter which is expected to hit many of the areas already devastated by Hurricane Sandy, there will be many scams as scam artists and identity thieves attempt to further victimize the victims of the storm.  I have already warned you about the scams involving phony contractors, phony FEMA representatives, phony insurance adjusters and phony charities, but with history as a guide, you should also be wary of the next round of scams which will take the form of scam investment opportunities.  As previously happened following Hurricane Katrina, you can expect to receive emails and other communications offering to let you in on fool-proof investments in companies that have developed products or are providing services that will be part of the massive clean-up and reconstruction of the storm affected areas.  These investments may be in a revolutionary new type of generator, a water-removal system or other storm related technologies or products.  Many of these investments will be scams and you should be very careful before making private investments.


First you must ask yourself, why is this stranger contacting me to invest in this fool-proof investment that is guaranteed to deliver a huge profit?  You should also never underestimate the power of a fool.  Nothing is fool proof and no investment can guarantee a huge profit.    Before investing with anyone, you should investigate the person offering to sell you the investment with the Securities and Exchange Commission’s Central Registration Depository.  This will tell you if the broker is licensed and if there have been disciplinary procedures against him or her.  You can also check with your own state’s securities regulation office for similar information.  Many investment advisers will not be required to register with the SEC, but are required to register with your individual state securities regulators.   You can find your state’s agency by going to the website of the North American Securities Administrators Association.   You should also check with the Financial Industry Regulatory Authority (FINRA) for information about the particular  investment adviser.  It is also important to remember that you should never  invest in something that you do not completely understand.  This was a mistake that many of Bernie Madoff’s victims made.  You also may want to check out the SEC’s investor education website at  Scammers can be very convincing and it may sound like there is a great opportunity for someone to make some money, but you must be careful that the person making money is not the scam artist taking yours.

Scam of the day – October 6, 2012 – FTC freezes accounts of scammers

On July 15, 2012 I warned you about a scam in which you receive a telephone call purportedly from Microsoft, Dell or other major computer companies or security software companies such as McAfee and Norton telling you that they have remotely determined that your computer is seriously infected with computer viruses and that you need to immediately remedy the problem for fees ranging from $49 to $450.  To confirm the problem, they tell you to go to your Windows’ Event Viewer which is a utility that keeps track of program errors and other events on your computer.  Everyone’s Windows’ Event Viewer will show many errors, but almost universally they are of no significance.  However, when directed to this utility and seeing a long list of problems, people can begin to trust the scammer, not knowing that these “problems” are insignificant.  The victim is then directed to a website to download a code or download a software program that permits remote access to the scammer under the guise that the scammer would then remove the offending malware.  Too often when the victim downloaded the software, they also downloaded dangerous keystroke logging programs that allowed the scammer and identity thief full access to all of the information in the victim’s computer that, in turn, let the scammer steal the identity of the victim.


This week the Federal Trade Commission filed legal actions against 14 companies and 17 people the FTC said were involved in this scam and a New York Federal Court Judge ordered the assets of these defendants be frozen while the case proceeds.  I will keep you informed as to the progress of the cases.  Meanwhile, the best place to find a helping hand is at the end of your own arm, so my advice to you is to be proactive and protect yourself from these scams.  Whenever you receive a telephone call from someone saying they are with a particular company, you can never be sure that they are who they represent themselves to be.  Never give out personal information to someone who calls you on the phone.  If you believe a call is legitimate, call the company back at a number you know is accurate.  It is also important to remember that none of these computer companies or software security companies will ever initiate a call to you so if someone contacts you purporting to be from one of these companies to tell you that your computer is having problems, hang up;  they are scammers.  Always maintain up to date security software and if you have questions, call your computer company or your security software company directly at a telephone number that you know is accurate.


Scam of the day – September 24, 2012 – Bernie Madoff update

Bernie Madoff, the foremost Ponzi schemer in history is now serving the third year of his 150 year sentence in a federal prison in North Carolina.  His victims, many of whom lost their entire life savings have continued to feel the pain of his criminal acts  However, quietly and often out of the news, Irving Picard, the trustee appointed to liquidate Bernard L. Madoff Investment Securities and to attempt to recover funds on behalf of the victims of Madoff has been having some success.  Recently, Picard sent partial reimbursement checks ranging from $1,784 to $526.9 million dollars and totalling 2.48 billion dollars to 1,230 former customers and victims of Madoff.  The average payout of this distribution was 2.02 million dollars.  This brings the total amount recovered from various sources including insurance and settlements to 3.63 billion dollars.  It is expected that 44% of the victims with valid claims will end up totally compensated for their losses, which is amazing for scam victims


The best way to not be swindled is to not be taken in the first place.  Madoff’s scam epitomized two common scam dangers.  The first is affinity fraud.  People tend to trust people who are “like them” without questioning what is being proposed to them.  Someone “like us” would never steal from us is how the victims think.  The truth is that scam artists, the only criminals we call artist,s make it a point to play up whatever they have in common with their victims, such as race, religion or ethnicity to get their victims to trust them instead of doing the kind of due diligence you should do before getting involved in any investment.  The second scam danger prominent in Madoff’s Ponzi scheme was that people who invested in it did not understand how the investment worked.  You should never invest in anything that you do not fully understand.  No one understood what Madoff was doing because, frankly, if they did, they would understand that it couldn’t work.  You may miss out on some good investments by limiting your investments to things you understand, but you won’t be a victim of a scam.

Scam of the day – September 22, 2012 – Keeping the family computer safe

Often it seems that the teenaged and even younger members of your family know more about computers than the adults do; and maybe they do.  However, unfortunately, they are also less security conscious and more susceptible to downloading malware such as keystroke logging programs that can read all of the information from your computer and make you a victim of identity theft.  Often the malware comes when the kids dowload free music, games or videos.  Scammers and identity thieves are adept at luring people, particularly young people into downloading these virus laden software programs that can lead to identity theft.


Along with good firewalls and computer security software, which you should regularly update, you should also educate your children about the risks of viruses and malware in free music, games and videos.  However, perhaps the best protection for the adults in the family who should be using the computer for online banking, which is safer than paying bills through the mail, is to have one computer reserved for the adults that they use for online banking, purchases and the storage of sensitive information and another that they share with the kids.  In this way, you can avoid the risks of the kids downloading damaging malware.  Now we just need to educate the adults to avoid the free pornography that is loaded with malware.


Scam of the day – August 12, 2012 – Deployed soldier scam

Scammers certainly have no ethics when it comes to determining their victims.  A new scam that is now appearing involves the spouse of a deployed soldier being contacted by an email indicating that the spouse needs to wire funds in order to cover the cost of luggage charges before the service member spouse can be approved for a temporary leave.  This particular scam actually contains the name of real service members which indicates that there has been a breach of security somewhere in a data bank with information on military members and their spouses.


No matter how legitimate an email may look, it can be a forgery.  In this particular instance, despite the fact that actual names are used, you should be skeptical of a military program pertaining to a leave that requires you to wire funds.  If you have any questions you should contact the service member’s base in the United States to confirm that the message is a scam.

Scam of the day – July 26, 2012 – Olympic scams part 2

Phony lotteries have long been a staple of scammers and the Olympics have already given scammers an opportunity to scam people through emails that appear to come from legitimate companies, such as Coca Cola that are also advertisers at the Olympics.  The phony emails look very real.  Unfortunately it takes little forgery talent to make an email communication look like it is a legitimate communication from a legitimate company.  The phony emails are telling unsuspecting victims that they have won lotteries tied to the Olympic games as promotions by the companies.  Then comes the hook.  The scammer posing as the legitimate company asks you to wire them processing fees, transfer charges or tax payments for a prize you will never receive.


You can’t win a contest that you never enter.  Legitimate companies do not require processing fees or transfer charges and income taxes are either deducted from your prize or you pay them directly to the IRS.  If you have the slightest thought that the contest might be real, contact the real company at a telephone number that you know is accurate to inquire.