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Common Fraud Schemes

Criminals are becoming increasingly proficient at defrauding people using the internet, mail, and the telephone. Their goal is to lure you into falling for their elaborate schemes by gaining your trust and gathering your personal information. Frequently our elderly residents are targeted because they are often more trusting and less experienced with technology. Recognizing the methods employed by these criminals will help you steer clear of becoming a victim.

Below is a list of common fraud schemes you should watch out for.

Mystery Shopper

Criminals contact victims through employment websites, asking them to evaluate a store or service. The criminal sends the victim a check and instructs them to deposit the check. The victim is then instructed to shop and evaluate the store. They are told to keep the merchandise they bought and return any remaining money, less their "pay", often a few hundred dollars for the victim. The remainder is sent to the criminal by way of a money transfer. The victim sends the money transfer and the criminal picks it up leaving the victim responsible for when the check bounces a few days later.

Overpayment

A common fraud in which the victim is sent a check in payment for a service or product that appears to be valid. Typically the amount of the check exceeds what the victim expects to receive. The sender instructs the victim to send the excess back to the criminal. When the check bounces the victim is left responsible.

Employment

The criminal will send a check to the victim who has accepted a "job". The check can be for multiple reasons such as a signing bonus, supplies, etc. The victim will be instructed to deposit the check and use the money for any of these reasons. The victim is then instructed to return the remaining funds to the criminal. The check will bounce and the victim is left responsible.

IRS Scam

Victims are contacted by phone by persons purporting to be from the Internal Revenue Service. The caller demands immediate payment of unpaid taxes or face arrest and/or seizure of assets. The caller demands payments be made via funds transfer companies like Money Gram or Western Union. This is a widely publicized fraud which plays on the fears and anxiety associated with the IRS. Rest assured the IRS does not take actions in this manner and you should immediately hang up if contacted.

Lottery / Prize

Victims are informed through mail or e-mail that they have won a large lottery prize or sweepstakes. The victim receives a check for part of the winnings from the criminal and is told to pay a significantly smaller amount to cover taxes and/or processing fees. The victim uses the fraudulent check to pay for the taxes or processing fees and is left responsible for the bounced check.

Rental Property

Criminals advertise a rental property usually at a considerable discount. This allows the criminal to receive as many replies or inquiries as possible. The actor goes to great lengths to make this property look as legitimate as possible and might include pictures, floor plans, etc. To make sure you express an interest in the property the criminal will ask you to send money for a deposit, verify funds, or other legitimate sounding reasons.

Traffic Citation Scam

This is a new scam, reported locally, which apparently uses some type of phone application that recognizes your location and generates a seemingly accurate report regarding your speed, time and location. That information is sent via email in the form of an electronic citation. Citations are never emailed. Do not click any links contained in the emails as they likely lead to sites which could be used to implant spyware on your computer or phone.

Emergency Funds

This fraud usually occurs in two ways. Criminals will either make you believe they are someone you know or acting on behalf of someone you know. The fraud is based on you sending money for an urgent situation or emergency. The criminal will create a story such as the need for bail, fines, medical expenses, etc. The criminal may also use social media sites to further this type of fraud.

Grandparent

This fraud is based on the Emergency Funds fraud. The criminal will contact grandparents and impersonate either their grandchildren or a person of authority such as law enforcement, medical professional or attorney. The criminal describes an urgent situation or emergency that requires money to be sent immediately.

Internet Purchases

Victims are told to send money for a product, auction item or service to the seller. The criminal will use a number of tactics to make you believe they are legitimate. Once the victim sends the money they will not receive the purchased item or service or it will be significantly lower quality than advertised.

Fake Checks

Fake checks are used for many of the frauds explained in this section. These checks can be used for employment expenses, internet purchases, mystery shopping, etc. Remember not to use funds from a check deposited in your account until it officially clears with your bank. This usually takes at least 7 days. When in doubt speak to the bank. Checks have security features which are usually not present on forged or copied checks.

Basic guidelines for financial security

  • Only send money to people you personally know and trust, especially by way of a money wire.
  • When making purchases on line from an individual, it is best to use a third party payment service such as Pay-Pal to avoid giving personal information or credit card information to an unknown person.
  • If an offer sounds too good to be true, it probably is. Be skeptical.
  • Never send money to pay for taxes or fees on lottery or prize winnings. Legitimate lotteries do not conduct business this way.
  • Never provide your banking information to unknown individuals or businesses.
  • Never share your personal information i.e. Social Security Number, mother's maiden name, security question answers to un-solicited callers or emails.
  • Never send money in advance to obtain a loan or credit card.
  • Verify every emergency situation involving family of friends before sending money.
  • Never send funds from a check in your account until it officially clears. Confirm with your bank that security features are in place on the check and the time it takes to confirm funds are officially cleared.
  • Your local police are seeing an alarming increase in these types of frauds with victims suffering losses of thousands of dollars. Speak to family members about these types of crimes so that they do not fall victim.
  • The Upper Gwynedd Police Department is happy to discuss any concerns you might have about schemes such as these. Please call us BEFORE taking any action. We can help you determine the veracity of the request

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