Meet the top ten scams – #4 phishing scams

This is part four of our 10-part series taking a closer look at the top scams of 2012. The number four scam reported to NCL’s Fraud Center in 2012 was phishing scams. To see an overview of our complete report on the top scams of the year, visit our Web site at

Phishing scams clocked in at #4 on NCL’s 2013 Top Ten Scams report. These scams, come in a practically infinite number of variations, but a common theme involves a scammer getting their marks to click on malicious Web links or otherwise divulge sensitive information. Through the installation of tracking software on a victim’s computer or getting the victim to divulge sensitive information voluntarily scammers are able to get the information they need to commit identity theft or other frauds.

Phishing emails often are made to look like they come from a trusted entity, such as a bank or other financial institutions, complete with logos or other graphics that make the emails look legitimate.

Warning signs of phishing scams include:

  • Requests to “verify” information (such as a social security number, a bank PIN numbers, credit card account numbers, etc.)
  • E-mails from organizations that contain misspellings and/or poor grammar
  • Calls or e-mails from organizations that threaten to close accounts
  • Links or pop-ups that direct the users to unusual websites (such as .ru, .cn or other overseas web domains)
  • E-mails that do not contain your name

To ensure that more people are not tricked by one of these scams, consumers should take the following precautions:

  • If an unsolicited email or phone call from your financial institution asks for personal information, do not reply. If you are concerned about your account, contact the financial institution directly via the phone number or website listed on your statement
  • Take precautions to keep your computer secure. This includes ensuring that your e-mail provider and/or security provider scans email for threats and scans your computer for viruses regularly.
  • Do not click on links or open attachments in emails from people you do not know
  • If you are concerned that you’ve been a victim of a phishing scam, contact your financial institutions (banks, credit cards companies, etc.) and ask them to put a fraud alert on your account. You should also contact the three major credit reporting bureaus (Equifax, Experian and TransUnion) to alert them to the possibility of unauthorized individuals attempting to take out loans in your name.

For more information on phishing, please visit


Meet the top ten scams – #3 fake prizes/sweepstakes/free gift scams

This is part three of our 10-part series taking a closer look at the top scams of 2012. The number three scam reported to NCL’s Fraud Center in 2012 was fake prizes, sweepstakes, and free gifts scams. To see an overview of our complete report on the top scams of the year, visit our Web site at

This year, the third most common type of scam reported to National Consumers League involved fake prizes, sweepstakes, and prizes. These scams, which are may be advertised via phone calls, direct mail or email, generally claim that a consumer has won an a sweepstakes or other prize and must pay an upfront fee (such as fake “taxes” or “processing fee.”) The prize never materializes and the consumer lost the money spent on the “fees.” The widely reported “Jamaican Lottery Scam” is one of these types of frauds. However, this scam comes in many other variations, with scammers posing as representatives of well known sweepstakes such as Publishers Clearing House and Reader’s Digest.

Consumers should look for the following red flags of possible fraud:

  • If you’re asking to pay money in order to collect winnings from a sweepstakes, lottery or other prize offering, it’s a scam
  • If you are told that you’ve won a lottery or contest you’ve never entered, it’s a scam
  • If you’re asked to wire money in order to collect winnings, it’s a scam
  • The “promoter” asks for sensitive personal information such as a credit or debit card number, Social Security Number or bank account number
  • The advertisement states that a purchase is necessary to win
  • The “promoter” guarantees that you will win if you send funds

Consumers who have responded to an advertisement for one of these fraudulent lotteries or sweepstakes or who have sent money to the scammer should expect that they will be contacted by the scammer and the scammer’s accomplices frequently with additional demands. Scammers engaged in fraudulent sweepstakes schemes have been known to use threats to extract more money from their victims or even impersonate law enforcement (and ask for additional money to set up “stings” against the scammers).

Additional information on these scams is available here.

Meet the top ten scams – #2 Internet merchandise sales scams

This is part two of our 10-part series taking a closer look at the top scams of 2012. The number two scam reported to NCL’s Fraud Center in 2012 was Internet merchandise sales scams. To see an overview of our complete report on the top scams of the year, visit our Web site at

The second most common type of scam reported to the National Consumers League this year were general merchandise sales – online sales in which purchased goods are misrepresented or are never delivered. These scams come in many different forms. One of the most commonly-reported types of Internet merchandise scams involved fake pharmaceuticals, such as diet pills and male-enhancement pills. Other popular variations on this scam involve fraudsters creating realistic-looking e-commerce sites advertising discounts on high-dollar merchandise such as jewelry or electronics.

While these scams are difficult to stop, consumers should take some of the following precautions to avoid this theft:

  • Obtain a physical addresses and a phone number for the company or person you are buying from. Call the number to ensure it is legitimate.
  • Be skeptical of extremely low prices compared to other sites selling similar goods.
  • Pay with credit cards when buying something online since fraudulent purchases can be disputed with your card issuer. Remember to promptly report suspicious activity on your credit card bill since there is a limited window of time to dispute a charge.
  • Do not give out sensitive information such as a Social Security number or a debit card a PIN number when purchasing merchandise online.
  • Keep records of sales by printing out receipts or saving them on your computer.

For more information on general merchandise sales scams, visit


Meet the top ten scams – #1 fake check fraud

This is part one of our 10-part series taking a closer look at the top scams of 2012. The number one scam reported to NCL’s Fraud Center in 2012 was the fake check scheme. To see an overview of our complete report on the top scams of the year, visit our Web site at

Sandra LatouffBy Sandra Latouff, NCL Public Policy Intern

“Congratulations! You’ve won the lottery!”

“You can earn a large salary just by working at home!”

“Get paid for doing what you love, earn a large salary just for shopping!”

Sounds great, right? There is one catch: all you have to do to get your reward is deposit a check and wire the money to the sender to pay the taxes and fees.

There’s another catch, which consumers aren’t told – The checks are fake and the “great opportunity” is actually a scam that could cost you big-time. On average, consumers who fell victim to these schemes lost an average of more than $2,400! That’s serious cash for most of us.

Scams involving counterfeit or fake checks were the number one scam reported to NCL’s campaign in 2012. The scams comes in a number of variations, including foreign lottery scams, check overpayment scams, internet auction scams, and secret shopper scams, just to name a few.

The scams works like this: a scammer contacts a potential victim, either by email, phone, through the mail, or by some other means. The original communication may or may not include a realistic-looking check made out to the victim. If the victim responds to the outreach, usually by replying to an email or by calling a phone number operated by the scam artist, she is instructed to deposit the check into her personal bank account and wire all or a portion of the proceeds from the check to the scam artist or an accomplice via a money transfer service like MoneyGram or Western Union. The scammer gets cash in hand, often within minutes. Depending on how long it takes the bank to recognize the fake check, the victim may not find out about the fraud until days or weeks later. By that time, the scam artist is long gone and the victim is left owing their bank for the proceeds from the fraudulent check.

Regardless of the type of fake check scam the scammer employs – the “mystery shopper,” the “overpayment,” and the “lottery/sweepstakes winnings” variations are popular – the common thread involves the deposit of a check into a personal bank account and then having money wired to the scammer or a third party, such as a fictional “escrow service.”

It is not unusual for a scam artist to use social persuasion techniques to gain a victim’s trust. When being contacted, the scammer may disclose some personal information such as the victim’s name, address, or email address in an effort to convince their mark that the offer is legitimate. Such personal information is widely available online and does not make the alleged company or organization legitimate or trust-worthy.

Tips to keep in mind:

  • If someone gives you a check or money order and asks you to send money somewhere in return, it’s a scam.
  • If you are asked to pay money to collect lottery or sweepstakes winnings, it’s a scam. If you have really won, you will pay taxes directly to the government after you receive your winnings. Be especially wary of claims that you have won well-known sweepstakes such as Reader’s Digest or Publishers Clearing House.
  • Legitimate mystery shopper or account manager jobs don’t involve using money transfer services to send money. Be especially cautious of offers to mystery shop Western Union or Moneygram locations, or the retail stores that house them, such as Walmart, 7-Eleven, or local drug stores.
  • The check or money order may be fake even if your bank or credit union lets you have the cash. You have the right to get the cash quickly, usually within 1-2 days, but your bank or credit union may not be able to tell if there is a problem with the check or money order until it has gone through the system to the person or company that supposedly issued it. That can take weeks. By the time the fraud is discovered, the crook has pocketed the cash.
  • Even if a consumer is defrauded in a fake check scam, she may still be required to pay the bank back for the losses.

For more tips about avoiding scams involving fake checks, please visit NCL’s campaign site or NCL’s guide “Avoid Fake Check Scams: Five things you should know.” For more information on scammers misusing the Publishers Clearing House name, click here. For more information on the Reader’s Digest fake check scam, click here. Western Union’s Consumer Protection Web site is also a good resource for information on these scams.

Experts discuss payroll fraud at Senate briefing

The National Consumers League’s Special Project on Wage Theft hosted a Senate briefing on March 13 to explore the under-reported and growing issue of payroll fraud. Payroll fraud is the result of misclassification, meaning that an employer will identify an employee as an independent contractor or pay them off the books, skirting certain worker protections such as minimum wage, paid leave, or worker’s compensation. This phenomenon is widespread in temporary employment industries such as construction, agriculture, trucking, and janitorial services. Unfortunately, misclassification continues to grow, with too few regulators and too many employers who see payroll fraud as an easy way to save money. Workers who do not receive proper benefits, as well as ethical businesses who follow the rules, are ultimately the biggest victims. More information about this issue can be found at the NCL Web site.

Employers responsible for payroll fraud do so knowingly and intentionally. Classifying a worker as an independent contractor is not a minor clerical error, but rather a conscious decision made by an employer. The problem is not that the laws are confusing or hard to understand. However, employers know that they can get away with not paying employees the benefits they deserve. In this tumultuous economy, with the added factor of fear over the implementation of the Affordable Care Act, many purposefully break the rules. This puts honest businesses, especially those bidding on contracts, at a distinct disadvantage and unable to compete with the violators.

Heather Rowe, the Director of the Department of Labor Standards from the Commonwealth of Massachusetts and member of the payroll fraud panel, explained how Massachusetts is handling this complex issue. Her state is a good example for how to combat violating employers. Using a joint task force and a fraud detection system, Massachusetts has begun the process of identifying employers who violate payroll rules and collecting the money they owe. From 2010 to 2011 the state of Massachusetts recovered almost 11 million dollars in unpaid revenues.

With this problem continuing to grow, the question becomes: how do you honor those companies that have followed the rules and punish the companies practicing payroll fraud? At Wednesday’s Senate briefing, panelists discussed one option: publicly shaming employers who violate the rules in order to drive business to companies that play by the rules. California included a public shaming aspect in the employee misclassification law passed in the state in 2012. Another option is to pass federal legislation such as the Payroll Fraud Prevention Act, which was proposed by Sen. Sherrod Brown (D-OH) in 2011. Kim Bobo, author of Wage Theft in America: Why Millions of Working Americans Are Not Getting Paid – And What We Can Do About It and member of the panel, says that there need to be more federal regulators monitoring payroll fraud. “The TSA was able to add 56,000 new regulators in one year. All we need is 1,000 regulators, but it’s an unpopular position in this economy, and people won’t support that,” she said.

The simple fact is payroll fraud is steadily on the rise and rapidly spreading to new industries. Today, many people who work low-wage jobs do not know that they deserve additional benefits or they are too afraid to complain to their employer for fear they will lose the job altogether. New sites such as allow people to anonymously report cases of payroll fraud and helps put public pressure on employers to cease violations. The issue needs more exposure and, as more states follow the example of Massachusetts and other states that have taken action, it will become clear that preventing payroll fraud not only benefits workers, but also provides additional revenues to the states at a time when nearly every state needs the money.

Lessons from National Consumer Protection Week

By John Breyault, Vice President of Public Policy, Telecommunications and Fraud

On Saturday, March 7, the annual observance of National Consumer Protection Week (NCPW) will come to a close.  News articles have been written about it and a presidential proclamation has been issued.  The National Consumers League has been proud to again be a member of the national steering committee for NCPW.

But NCPW does not HAVE to end at midnight Saturday night.  In the current economic environment, the opportunities for scammers to bilk desperate consumers out of their depleted wealth have rarely been greater.  Now, more than ever, it is important that consumers take the lessons of NCPW to heart to help avoid becoming another number in the billion-dollar fraud statistics.

The theme of this year’s NCPW is “Nuts & Bolts: Tools for Today’s Economy.”  Given the immense resources available to help consumers protect themselves and become more informed, this theme is especially apt.  The Federal Trade Commission’s NCPW website provides a wealth of governmental resources that consumers can use to get educated about a variety of consumer topics.  In addition, there is a great outreach toolkit so consumers can talk to their local media, government officials, bloggers, and friends to spread the work about NCPW.

Con-artists have found out that the Internet is an enormously powerful tool for reaching victims.  However, the power is not just in the scammers’ hands.  Thanks to tools like the ones detailed on the NCPW site, NCL’s own, and in literally hundreds of others a quick Google search away, consumers can turn the table on the scammers and use the power of the Internet to get informed and stay one step ahead of the fraudsters.

Love Still In the Air?

Still munching on conversation hearts? Still enjoying just-beginning-to-droop fresh cut flowers or romantic meal leftovers? Valentine’s Day may have come and gone, but for some unfortunate consumers, the sting of falling for a sweetheart swindler can last months – emotionally and financially!

It’s been more than a year since the fraud experts at the National Consumers League’s Fraud Center first identified a new trend in consumer scams: the Sweetheart or Friendship Swindle. While NCL’s Fraud Center only started tracking this type of scam in July of 2007, the Sweetheart Swindle scams gained enough momentum in the second half of that year to propel it to the 2007 top 10 scam list, which is annually released by NCL. According to complaints logged at in 2007, the average sweetheart lost more than $3,038 to con artists disguised as friends or loved ones.

The trend seems to be holding up. In 2008, Friendship/Sweetheart swindles were the 10th most-reported type of scam to NCL’s Fraud Center, and – even worse – the average loss for such scams was nearly $12,500! Four times the previous year’s average loss. This average loss made friendship/sweetheart swindles the third-most costly type of scam, on average, for their victims.

Love stinks, doesn’t it? With so many of us turning to the Internet to find dates, friends, community activities, and more, it’s no wonder that scammers have cultivated a new way of taking money from their victims. Think you’ve found a new friend online but something’s fishy? Here are some warning signs that your new beau or gal may not be the real deal:

  • The person asks you for money, to cash a check or money order.
  • Your online sweetie says, “I love you” almost immediately.
  • The person claims to be a U.S. citizen who is abroad, and or claims to be well off, or a person of important status.
  • The person claims to be a contractor, and needs your help with a business deal.

The Washington Post’s Michelle Singletary wrote a great piece on the scam last year. Read it!