Common Fraud Schemes

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Common Fraud
Schemes and How
to Avoid Them
Insert Instructor name here

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Welcome & Introduction
 Part of having a healthy financial outlook is educating yourself on
the potential risks to your finances that are out there.
 The risks we will focus on today are those associated with fraud
schemes and scams which may potentially negatively impact
your banking relationship.
 Knowing what to look for and how to avoid these potential fraud
risks will help you build a stronger financial outlook.

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What is a Scam?
This presentation covers the following
types of scams:
 Telemarketing Fraud
 Advanced Fee Schemes
 Romance/Online Dating Scams
 Family Emergency Scams
A dishonest or illegal plan or activity, especially one for making money.*

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Who is a Target?
 EVERYONE and ANYONE may become
a target of a scam including YOU!
 It doesn’t matter to the perpetrator what
background, age and/or income level you
have achieved.
 Main goal of the fraudster: Get the
money as quickly as possible and prior to
discovery!

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Telemarketing Fraud
 What you may hear from the fraudster:
– ACT NOW or
– the offerwon’t be good.
– You will miss a HIGH PROFIT,NO RISK offer.
– You’ve won a FREE gift, vacation or prize BUT you’ll
have to pay some type of fee, charge, etc. to claim it.
– Pressure to send money, give a credit card or bank
account number or have a check picked up by courier
before you have time to review the offer.
– You don’t need to:
– Independentlyverify the company
– Receive written information or referencesabout the
company
Fraudulent selling of a product or service by phone.

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Telemarketing Fraud
 AVOID being a victim:
– Don’t buy from/give to an unfamiliar company or
charity:
– Requestwritten materials aboutthe company/charity
– Research the company/charity independently:
– Better Business Bureau
– Local consumerprotectionagency
– State Attorney General’s office
– Watchdog groups suchas the National Fraud Information
Center.
– Obtain and independently verify:
– Salesperson’s name
– Business identity
– Telephone number
– Address
– Business license number
Fraudulent selling of a product or service by phone.

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Telemarketing Fraud
 AVOID being a victim:
– Before you give or send money:
– Set limits on the types of financial information you will
give out over the phone.
– Don’t pay in advance for services.
– Don’t allow companies to send a courier to your home
for the money.
– Don’t pay for a FREE prize.
– NEVER respond to an offer you don’t thoroughly
understand.
– ALWAYS talk over any offers with a trusted
advisor.
– Don’t give money, confidential personal
information or account information to unknown
persons or companies.
– REPORT FRAUD to law enforcement!
Fraudulent selling of a product or service by phone.

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Advanced Fee Schemes
 Advanced fee schemes are varied and numerous. They are
limited only by the ability of a fraudster to think up a new method of
delivery.
 Advanced fee schemes focused on in this program:
– Nigerian Letter “419” Scams
– Lottery/Sweepstakes Scams
– Work from Home Scams
A victim pays money to receive something of greater value but receives nothing.

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Advanced Fee Schemes
Nigerian Letter or “419” Fraud
How does the scam work?
 Victim promised large sum of money for assisting in the transfer of
funds into the US.
 Victim mailed official looking documents to prove legitimacy of
transaction.
 Victim is instructed as follows :
– DO NOT DISCUSS with anyone.
– Forward your blank letterhead, bank name and account information to
facilitate the transfer.
– Send funds in “x” amount to assistwith payment of taxes, fees and bribes
to governmentofficials.
 There will be continued requests for funds to assist with this
until the victim stops making further payments. Once the
victim stops payments, the fraudsters will use the bank and
account information to impersonate the victim and drain the
victim’s accounts and credit balances further.
A letter or email mailed from Nigeria offering the recipient a percentage share of
millions of dollars that the author is attempting to transfer to the United States

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 AVOID being a victim:
– Don’t respond to any letter received from
Nigeria requesting personal and/or banking
information. Instead forward the letter to one
of the following:
– U. S. Secret Service
– U.S. Postal Inspection Service
– Local FBI office
– BE SCEPTICAL!
– Don’t believe individuals who represent themselves
as officials for Nigeria or other foreign governments
and ask for your assistance in placing large
amounts of money in overseas accounts.
– Don’t believe the promise of large sums of money!
– GUARD your account information carefully!
Advanced Fee Schemes
Nigerian Letter or “419” Fraud
A letter or email mailed from Nigeria offering the recipient a percentage share of
millions of dollars that the author is attempting to transfer to the United States

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Advanced Fee Schemes
Lottery Scams
How does the scam work?
 Victim receives an unsolicited letter with check included claiming victim
is a winner in a recent raffle drawing, lottery or sweepstakes.
 Victim is told that the check is to assist with payment of fees or taxes
associated with winning a much larger amount.
 Victim is instructed to negotiate the check at their bank and when funds
become available, wire those funds back to the Claims Agent for
payment of the fees or taxes.
 Victim is told that once the fees or taxes payment is received, the
winning proceeds will be remitted to victim.
 Victim wires the funds, fraudster absconds with the funds, and the
victim is left owing the financial institution for the fee check that
returned counterfeit.
Unsolicited mailing claiming a prize/money awaits you from a recent raffle
drawing or lottery.

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 AVOID being a victim:
– ASK YOURSELF, “Did I enter a lottery or
sweepstakes?”
– If an offer or communication of winnings
appears too good to be true, it most likely
is!!!
– Follow common business practices
– KNOW who you are dealing with
– UNDERSTAND FULLY the transaction you are
entering into
– BE WARY of businesses who operate out of post
office boxes or mail drops with no street address
– PAY ATTENTION to individuals or entities who
request you keep the transaction confidential
Advanced Fee Schemes
Lottery Scams
Unsolicited mailing claiming a prize/money awaits you from a recent raffle
drawing or lottery.

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Advanced Fee Schemes
Work from Home Scams
How does the scam work?
 Victim replies to an advertisement for a work-from-home opportunity
promising a high income
 Victim is instructed that in order to get started victim will need to pay a fee up
front for the products and/or program information needed to do the job
 Victim may also be asked for personal confidential information such as social
security number, banking and other account information for employment
purposes
 Victim may be sent a check as payment for employment which may be for a
larger amount than victim “earned”- victim is asked to deposit the check and
wire the difference back to the “employer”
 Victim is left holding the bag on the check when it returns as
counterfeit and/or victim’s personal identifying and account information
is used fraudulently by the “employer”
A fraudulent job opportunity which gives no guarantee of regular salaried
employment and usually requires advance payment from the victim for products
and/or instructions.

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 AVOID being a victim:
– Don’t get involved with an employer that:
– Does not explain its business model clearly
– Hire’s YOU without even a phone interview
– NEVER GIVE your confidential personal information
and/or account information to an employer you are
unable to verify independently
– RESEARCH the employer yourself via the internet:
– Better Business Bureau
– States’ Secretary of State sites
– Consumer watchdog organizations
– UNDER FINANCIAL STRESS? Recognize your
vulnerability and talk to a trusted independent advisor
before getting involved in a suspicious employment scheme
Advanced Fee Schemes
Work from Home Scams
A fraudulent job opportunity which gives no guarantee of regular salaried
employment and usually requires advance payment from the victim for products
and/or instructions.

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How does the scam work?
 The fraudster will cultivate an online relationship with the victim and
make the victim believe they are “in love.”
 The fraudster may even send gifts such as flowers, chocolate, etc.
All to make the victim believe they have a true connection.
 Once the fraudster believes they have the victim “hooked,” the
fraudster will begin to request money from the victim.
Romance/Online Dating Scams
A fraudster poses as a potential online love interest in order to obtain funds
fraudulently from unwitting victims.
 The victim will be left at the end defrauded of personal funds (this can easily be in the
thousands of dollars range) and/or being the unwitting partner in a money laundering
scheme when cashing checks the fraudster sends and wiring the funds back.
 The fraudster will continue to come up with a variety of reasons why they need funds from the
victim until the victim stops sending the funds.
 The fraudster may also send checks to the victim to cash for him/her and wire the funds back.
Again, the fraudsters will give a variety of reasons why they cannot cash the check themselves.

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 AVOID being a victim:
– Recognize the signs that your online
dating/romance interest may only be interest in
your money:
– The individual pressures you to discontinue
communication through the online dating website,
chatroom, etc., and start communicating via personal
email or instant messaging
– The individual professes an instant connection,
instant love, instant “you are his/her soulmate”
– The photo(s) the individual sends you of him/herself
looks like a model in a professional photoshoot
– The individual will claim to be American but currently
travelling and/or working overseas
– The individual will make plans to visit you but be
stopped by some tragic event/occurrence for which
he/she will ask you for funds to get out of or get
assistance with
Romance/Online Dating Scams
A fraudster poses as a potential online love interest in order to obtain funds
fraudulently from unwitting victims.

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 AVOID being a victim:
– Recognizethe signs that your online dating/romance interest
may only be interestin your money:
– The individual will ask you for money for a variety of different
reasons/scenarios:
– Travel (to see you)
– Medical emergencies (they were in a horrible accident and now in the
hospital)
– Hotel bills (they were robbed and stranded and need funds to cover
their hotel bill)
– Hospital bills (they had a family member that was in a horrible accident
or had a medical emergency or is dying and they need funds to help
pay for their care)
– Visas or other official documents (they need funds from you to assist
them with obtaining their visa and/or other documentation they need to
come visit you)
– Any other financial setbacks or scenarios where they were the victim of
a crime
– Only use reputable,nationallyknown dating websites.
– If you feel that you have been the victim of this type of
scam (or any other online scam)file a complaintwith the
FBI via their InternetCrime ComplaintCenter(IC3) at
www.ic3.gov
Romance/Online Dating Scams
A fraudster poses as a potential online love interest in order to obtain funds
fraudulently from unwitting victims.

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How does the scam work?
 Impersonation of a loved one:
– Victim will receive a text, email or telephone call from an individual
posing as a relative or friend (a favored role is that of a grandchild)
 Play on emotions:
– The message will claim that the senderis in dire distress i.e. in jail, in
the hospital and/or stranded in a foreigncountry
 Pressure to wire funds:
– The message will beg the victim to act immediatelyand wire funds
as there is no time to lose
 Swear victim to secrecy:
– Victim will be told that they cannot tell anyone or discuss with
anyone.
 Victim will wire funds and then discover that the loved
one was in no emergency and victim has lost the money.
Family Emergency Scams
Scammer poses as a relative or friend who finds themselves in an emergency
situation and they urgently need funds wired immediately.

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 AVOID being a victim:
– Verify an Emergency!
– RESIST THE URGE to act immediately!
– VERIFY the individual’s identity by asking
questions only the true loved one would know the
answers to
– CALL A PHONE NUMBER for the loved one that
you know is genuine
– INDEPENDENTLY VERIFY the story with another
family member or loved one BEFORE you send the
funds
– DON’T WIRE FUNDS!!!! Or send a check or money
order overnight
– Report a possible fraud to
www.ftc.gov/complaint or 1-877-FTC-HELP
Family Emergency Scams
Scammer poses as a relative or friend who finds themselves in an emergency
situation and they urgently need funds wired immediately.

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Additional Resources
 US Postal Inspection Websites
– File a Complaint: https://postalinspectors.uspis.gov/contactUs/filecomplaint.aspx
– http://www.fakechecks.org/
– http://www.lookstoogoodtobetrue.com/
 Federal Trade Commission
– File a Complaint: http://www.ftc.gov/complaint
– http://www.consumer.ftc.gov/scam-alerts
 Federal Bureau of Investigations
– File a Complaint: http://www.ic3.gov/
– http://www.fbi.gov/scams-safety
 US Government Sponsor
– http://www.usa.gov/topics/consumer/scams-fraud.shtml/
– http://www.aging.senate.gov/

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