Fraud is endemic to American society. Many of us have heard the story of Dutchman Peter Minuit who purchased Manhattan Island from the Canarsie Indian tribe for $24 dollars in trinkets. The punch line here is that the Canarsie lived in what would later be called Brooklyn not Manhattan, so the Indians actually defrauded the Dutch! Prior to 1906 there were no laws regulating food and drugs in the US and snake oil salesman could make any claims about a product without fear legal consequences. Often substances like morphine, cocaine, and arsenic were used creating these elixirs. Beginning in 1938 GM and other automotive supplier began a campaign to destroy electric rail-based street cars, successfully using their influence to dismantle 90% of US street car lines.
One radio station in the UK reported that they were unable to give away several cash prizes to people whose telephone numbers were selected at random. Everyone is so used to being duped by the “you’ve won a prize” scheme that the winners assumed it was a scam and hung up!
A dead giveaway that it’s a scam is when they ask you to pay a processing fee in order to get your money! Also it is illegal in most countries for foreigners to win a lottery.
In 2007 3.6 million adults were victims of phishing and lost approximately $ 3.2 billion. As a general rule never click on links in e-mails even if its an e-mail address that you recognize. Also, to tell whether a website is secure look for “https” rather than “http” in the address bar.
Another variant has you accepting money orders or checks. The internet is also used to perpetrate the traditional work-at-home scams including: Craft assembly: after paying for materials your crafts will be rejected as “substandard” Medical billing: 99% of hospitals use large companies for billing, not individuals E-mail processing: send out e-mails persuading people to sign up for work at home scams Multilevel marketing: the classic pyramid scheme where you must bring in new member to make money Envelope stuffing: stuff envelopes with materials persuading people to sign up for work at home scams Auction sites drop shipping: you buy a list of list of wholesalers with goods to sell; the problem is price competition makes any profit nearly impossible
This type of marketing is similar to what book and record clubs have been doing for years and is only illegal if the company tries to disguise what it is doing. As a general rule, scrutinize your monthly credit card bill and look out for unexplained charges. In the above scheme you may be charged a monthly fee for more products that you don’t want. The US has a lenient policy on commerce and subscribes to the Caveat Emptor philosophy: let the buyer beware.
Most of us laugh at these poorly-worded, far-fetched e-mails and wonder why anyone would fall for these, but they do, to the tune of about 100M a year and an average of $36,000 per victim. Even intelligent, well educated people have been taken in. Last year the treasurer of Alcona county, Michigan was found guilty of embezzling over 1.2 million (over 25% of the county’s budget) to fund a Nigerian fraud scam. Variants also include the puppy scam and the hitman scam.
The Ponzi Scheme : Ponzi scheme is a type of pyramid scheme that relies on new investment capital to provide a return to previous investors. When no new investors can be found the scheme collapses. Ponzi schemes usually offer returns that seem too good to be true and are usually short in term--under one year. Ponzi schemes rely heavily on word of mouth advertising and spam e-mailing. The few initial investors that make a great return on their money are urged to bring in new investors. Always get third party verification from the Better Business Bureau and the Securities and Exchange Commission The Offshore Investment Scam : Fraudsters claim that investing in foreign markets can make you a fortune because the differing time zones allow trades to take place at any hour of the day. Be cautious, it is extremely difficult for authorities to prosecute fraud perpetrated in another country The Prime Bank Scam : Unscrupulous brokers claim that they have access to a secret list of stocks in which the world’s top 50 banks invest when in fact no such list exists. Be wary of any investment that claims to have secret or inside information. Even if the scenario were true it would constitute illegal insider trading The Promissory Note Scam : Many victims fall for the promissory note scam falsely believing that promissory notes are insured by the government or an insurance company and are therefore risk free. Keep in mind real promissory notes are usually not offered to individual investors, instead corporations offer promissory notes to other corporation usually when they have a shared business interest
Also some systems can damage your car, particularly any systems that requires you to modify your oxygen sensor. Hydrogen enrichment is the latest scheme here due to the positive press about green cars. Don’t believe it! Your car’s electrical system is not powerful enough to produce an amount of hydrogen significant enough to increase your MPG by even 1%
The above scam was so pervasive in Japan that last month 58,000 police officers were sent to ATMs around the country on pension payment day to warn seniors as they withdraw their money.
Online Dating Scams: is the person really who they claim to be? Some things to look for: Unrealistic or fake photos (most everyday folk don’t look like fashion models) Men who say they are millionaires Women who are overtly sexual in their communication People from foreign countries like Nigeria and Russia (those serious about dating will live within a reasonable distance from you) Poor grammar and spelling if the person claims to be well-educated Requests for personal information Requests to circumvent the double blind e-mailing system on the site Requests for money or assistance with cashing checks or money orders
Remember in any situation were you post an item for sale you are vulnerable to phishing attacks and any other kind of scam out there. Use a secondary e-mail account to post items for sale rather than your primary account (the one that you give to friends, family etc.)
In some instances the scammer was able to get away with the first and last month’s rent and security deposit! Even if you are relocating from a long distance never make any payment without a copy of a lease agreement
Report any suspected scams to www.ic3.gov
This hoax originated from a news program from channel 2 in Hawaii 2002. The person who claimed that dioxins were being released in to food was not a physician, toxicologist, or oncologist. Rather the Director of the Center for Health Promotion at Castle Medical Center in Kailua, Hawaii
This hoax was completely debunked by UK science show that tried to cook an egg using 100 cell phones. It takes a 1000 watt microwave about a minute to pop a popcorn kernel. Cell phones operate at between .5 watts and 2 watts.
Also no cat could survive under these conditions.
Although the photographs themselves are genuine, the gun collection actually belonged to the late Bruce Stern, rather than Charlton Heston. Mr. Stern was a lifelong military and gun collector. An attorney and Vietnam veteran, he was involved in a number of military and firearms related organizations. He was a member of the National Rifle Association (NRA) Board of Directors he passed away in July, 2007 and some of the collection was auctioned off. This hoax may have been an attempt to discredit Heston as a “gun nut.”
The American Cancer Society agrees. They say that sweat glands are not connected to the lymph nodes, the source of most cancerous tumors. Most cancer-causing substances are removed by your kidneys, and released through urine by the liver. The lymph nodes don't release toxins through sweating.
Burundanga is the street version of a pharmaceutical drug called scopolamine. It is made from the extracts of plants in the nightshade family such as henbane and jimson weed. It's a deliriant, meaning it can induce symptoms of delirium such as disorientation, loss of memory, hallucinations, and stupor. In this scenario it would be nearly impossible to deliver enough of the drug have any effect.
While eating at either location, when the customer asks for the dessert recipe the waiter of waitress replies, “That’s two-fifty.” Naturally assuming that to mean $2.50. A month later when the bill comes with a $250 charge the irate customer vows revenge. Stand up to corporate greed and forward the recipe to everyone that you know!
This person is Chris Cocker, 19 year old man from Tennessee.
Rickrolling is a bait and switch prank. For example, you click on a link for the latest celebrity gossip and instead you are taken to a video clip of 80’s one-hit-wonder Rick Astley singing “Never Gonna Give You Up,” you have been rickrolled!
In 1991 a decision was made to add plot details to the European version of the video game Zero Wing which included dialogue between the game’s hero and villain. The dialogue was clearly translated by some one with limited knowledge of English and produced the above nonsensical sentence which became a catch phrase among computer geeks and gained greater fame when a music video was created using the slogan. Although interpretations vary, the phrase is most commonly used as a declaration of victory or ownership. For example, I defeat you totally and completely at table tennis then declare “all your base are belong to us!”
Post Secret is a website that is an ongoing community art project where people can anonymously post a secret that they have been keeping. Send your Secret on a post card and the webmaster posts it for all to see. The secrets have been compiled in to 4 volumes of books.
On November 4, 2002 this student made a video of himself swinging a golf ball retriever around as a weapon like a Jedi Knight. The video was filmed at his high school studio, and the tape left in a basement. The original owner of the videotape discovered it and immediately shared it with friends. Thinking that it would be a funny prank, one of them put it on Kazaa. Within two weeks, the file had been downloaded several million times. An adapted version of the video was created, adding Star Wars music , texts, and lightsaber lights, and sounds to his golf ball retriever. As of November 27, 2006 it was estimated by The Viral Factory that the videos had been viewed over 900 million times, making it the most popular &quot; viral video &quot; on the Internet.
Scambaiting is a form of vigilante justice perpetrated against 419 or other Advance fee scammers. The goal is to waste the scammers time and money and humiliate them in any way possible. Scambaiters like to collect “trophies” from the scammers or “mugus.” These can include embarrassing photos or videos; counterfeit checks, money orders, or passports; or even pieces of artwork they have persuaded the scammer to create. The most satisfying type of scambaiting is the “freight bait” were scammers are persuaded to pay hundreds or even thousands of dollar in freight charges for worthless items. One scambaiter successfully freight baited cement blocks, an old washing machine, and an old stove! To view a hilarious scambait got to youtube.com and type in “Where have all the laptops gone?”
Myspace currently has over 100 million members and acquires about 230,000 new members each day. What’s the big deal? Some negative aspects of My Space include predators who pose as typical young MySpace users in order to arrange meetings with minors. Currently approximately 80% of abductions are precipitated online. My Space is also rich ground for cyber bullying. Cyberbullying is when a child, preteen, or teen is tormented, threatened, harassed, humiliated, embarrassed or otherwise targeted by another child, preteen or teen using the Internet, interactive and digital technologies. “My Space addicts,” those who spend in excess of 2 hours per day on My Space, may also be disinclined to make friends in real life. Also, MySpace can be considered a waste or resources in terms of bandwidth, public access computer time. 2006 US House resolution 5319 passed the House of Representatives with a 415 to 15 vote, but was buried in a senate committee. This bill would block access to social networking sites at schools, libraries, or any other public institution that receives tax dollars.
97 billion emails are sent each day. One in 5 companies have fired people for e-mail abuse. Several websites offer programs to help you avoid “drunk emailing” by asking you mathematical questions before you are allowed to send a mail.
Internet Scams, Fraud, And Hoaxes
Internet Scams, Fraud, and Hoaxes
The History of Fraud in the US <ul><li>Fraudulent land deals </li></ul><ul><li>Snake oil and patent medicines </li></ul><ul><li>General Motors and street cars </li></ul><ul><li>Savings and loan crisis </li></ul><ul><li>Enron </li></ul><ul><li>Bernie Madoff </li></ul>
The Two-Pronged Attack <ul><li>Advance Fee Fraud </li></ul><ul><li>Victims are persuaded to advance small sums of money in the hopes of receiving a huge pay-off. Scammers may demand a processing fee or may offer you a large commission for cashing fraudulent checks </li></ul><ul><li>Identity Theft </li></ul><ul><li>Using your personal information such as name, birth date, social security number, etc criminals can obtain credit cards in your name or use your name to write bad checks </li></ul>
Top Ten Scams <ul><li>Fake Lottery </li></ul><ul><li>Phishing </li></ul><ul><li>Phony Job Offers </li></ul><ul><li>Negative Option Marketing </li></ul><ul><li>Nigerian 419 </li></ul><ul><li>Pump and Dump Stocks </li></ul><ul><li>Bogus Fuel Saving Devices </li></ul><ul><li>Grandparent Scam </li></ul><ul><li>Dating Scams </li></ul><ul><li>Craig’s List Scams </li></ul>
Fake Lottery <ul><li>The Scam: You receive an e-mail saying you have won a foreign lottery or sweepstakes. Scammers are usually after your bank account information to rip you off. Secondarily, they want information about you to steal your identity. </li></ul><ul><li>The Facts: You can’t win a lottery or sweepstakes that you didn’t enter! </li></ul>
Phishing <ul><li>The Scam: You receive and e-mail from your bank, an auction site, or your credit card company asking you to “update your information.” </li></ul><ul><li>The Facts: Legitimate businesses do not operate this way. Never give out your name, social security number, phone number, or bank account information online unless you are sure it is a secure website, always get third party verification. </li></ul>
The Phony Job Offer <ul><li>The Scam: You receive an e-mail stating “We have reviewed your resume and want to hire you right away!” </li></ul><ul><li>The Facts: Legitimate companies will want to interview you before making a job offer! There are many variants of this scam, but the most common involves you accepting packages to ship overseas. Weeks later you will receive a bill for the merchandise or you will be helping criminals use stolen credit cards to buy expensive items. Either way no commission will be forthcoming. </li></ul>
Negative Option Marketing <ul><li>The Scam: You order a bottle of diet pills from a website. It’s a great deal, its free, you just pay the shipping. A month later you receive another bottle of pills and your credit card statement shows a $50 charge. </li></ul><ul><li>The Facts: This is what is known as negative option marketing. On the web page you must “opt out” or unselect the default package when purchasing your item. Be careful and read the fine print. </li></ul>
The Nigerian 419 <ul><li>The Scam: You receive an e-mail from government official in Nigeria. The details will vary, but this person is in possession of millions from over-invoiced oil contacts or unclaimed money from some deceased person. Help him/her transfer the money to the US and keep a 10% commission. </li></ul><ul><li>The Facts: There is no money! The goals here is to get your bank account information and/or small sums of money supposedly to pay for charges related to transferring the funds. </li></ul>
The Pump and Dump <ul><li>The Scam: You receive an e-mail about a particular, little-known stock that is going to soon soar in value but you must act now! </li></ul><ul><li>The Facts: Brokers are trying to artificially increase the price of the stock in order to cash in. Stay away from stocks that are not traded on a well-known exchange like the NASDAQ or NYSE. </li></ul>
Bogus Fuel Saving Devices <ul><li>The Scam: You see an advertisement for a fuel saving device that claims to increase gas mileage by 30% using special additives, magnets, or inserting something into your car’s fuel line. </li></ul><ul><li>The Fact: According to the Federal Trade Commission there is no scientific evidence that any “fuel saving device” actually increases gas mileage </li></ul>
The Grandparent Scam <ul><li>The Scam: Although there are no reports of this scam being used on the internet this con is worth mentioning. You receive a phone call from “your favorite Grandson,” a conman posing as your Grandson claiming to be in trouble and needing money wired to him right away. </li></ul><ul><li>The Facts: Grandparents or the elderly are targeted as they tend to be less familiar with the voice characteristics of their grand children. </li></ul>
Dating Scams <ul><li>The Scam: You enter into a relationship with someone that you meet online on a dating site. They seem like a perfect match until… </li></ul><ul><li>The Facts: Most scammers will claim to be an American living in a foreign country who need money to get home or to get medical treatment. Asking for a payment via Western Union, a direct wire transfer, or cash is a dead giveaway that this person is only interested in one thing: your money! </li></ul>
Craig list Scams <ul><li>The Scam: You advertise your item for sale on craigslist.org . A buyer contacts you and offers to send you a check or money order for more than you are asking for the item. Just refund the difference to them and keep a commission for yourself. They will usually have some convincing story about why they have the check or money order, such as a previous purchase that fell through. </li></ul><ul><li>The Facts: The check or money order will bounce and your bank will hold you responsible! </li></ul>
Craig’s List Scams Cont. <ul><li>The Scam: You see an apartment advertised on craigslist.org. You contact the seller to say that you are interested. He says he has several parties looking at it but will hold the apartment for you if you put down a small deposit sent to him either through PayPal, EFT, or Western Union. You then make arrangements to look over the apartment. </li></ul><ul><li>The Facts: Surprise! The unit is occupied and has been for a long time. All the scammer needed was a digital photo and description to list the apartment that he didn’t even own! </li></ul>
How to Spot Internet Scams <ul><li>Promise of money, jobs, or prizes </li></ul><ul><li>Ask for donations, processing fees, or upfront payments </li></ul><ul><li>Proposal of lucrative business deals </li></ul><ul><li>Ask you to provide sensitive personal information </li></ul><ul><li>Ask you to follow a link in a website or e-mail message to log in to your account </li></ul>
Top Ten Hoaxes <ul><li>Dioxins in Plastic Containers </li></ul><ul><li>Cell Phones Pop Popcorn </li></ul><ul><li>Charleton Heston’s Gun Collection </li></ul><ul><li>Deodorant Gives You Breast Cancer </li></ul><ul><li>Human Parts Factories </li></ul><ul><li>Bonsai Kittens </li></ul><ul><li>UPS Uniforms </li></ul><ul><li>Burundanga on Business Cards </li></ul><ul><li>$250 Cookie Recipe </li></ul><ul><li>E-mail Hoaxes </li></ul>
Dioxins in Plastic Containers <ul><li>The Hoax: In early 2002 an e-mail was circulated that stated that microwaving plastic containers releases a cancer causing substances known as Dioxins. Variants of the e-mail also mentioned freezing plastic water bottles. </li></ul>
Dioxins in Plastic Containers <ul><li>The Facts: There are no dioxins in plastic and even if there were, a temperature above 1500 degrees would be required to released them. Most household plastics begin to melt at temperatures of about 230 degrees. </li></ul><ul><li>90% of human dioxin intake comes from eating animal fat. </li></ul>
Cell Phones Pop Popcorn <ul><li>The hoax: a viral video shows a group of people using several cell phones to pop popcorn kernels </li></ul><ul><li>Cell phone pop popcorn </li></ul><ul><li>The Facts: cell phones do not put out enough energy to pop a kernel of pop corn </li></ul>
Bonsai Kittens <ul><li>The Hoax: A website offers bonsai kittens for sale. These kittens are placed in jars and fed through tubes. The kittens grow within the jar and take on the jars shape, similar to how a bonsai tree is made. Bosai kittens are the latest decorating fad! </li></ul><ul><li>Such a hew and cry was raised over the site that in 2001 the FBI subpoenaed the website’s records. </li></ul>
Bonsai Kittens <ul><li>The Facts: the bonsai kitten website was hoax perpetrated by mischievous MIT students. No one ever tried to make or sell bonsai kittens. No one ever sold equipment to make bonsai kittens. This is obvious as links to buy products didn’t actually go anywhere and no samples of real bonsai kittens were shown on the website. The ones in the above slide are an example of bad photo fakery. </li></ul>
Charleston Heston’s Gun Collection <ul><li>The Hoax: When actor and NRA spokesperson Charleton Heston died a secret vault was discovered containing the largest cache of weaponry ever found to be in possession of a civilian. </li></ul>
Deodorants Cause Breast Cancer <ul><li>The Hoax: Women stop using underarm deodorants! Chemicals in deodorants, specifically the anti- perspirant type block the body’s release of toxins through the arm pit, thus causing a build up which leads to breast cancer. Also, shaving your underarms makes the blockage worse. </li></ul>
Deodorant Causes Breast Cancer <ul><li>The Facts: The FDA has quashed this myth, quoting the National Cancer Institute, saying that "no existing scientific or medical evidence links the use of underarm antiperspirants or deodorants to the subsequent development of breast cancer.” </li></ul>
Burundanga on Business Cards <ul><li>The Hoax: Criminals are using drug soaked business cards to incapacitate their victims. Variant: criminals are using ether inside sample perfume bottles to incapacitate their victims. </li></ul>
Burundanga on Business Cards <ul><li>The Facts: For Burundanga, it is most likely too difficult to deliver enough of the drug in powder or vapor form to incapacitate a full grown adult. Similarly it takes more than a few puffs to knock someone out with ether. </li></ul>
Human Parts Factory <ul><li>The Hoax: Eastern European countries are secretly operating human parts factories using the bodies of the homeless, convicted criminals, and the mentally ill. An e-mail warns those traveling in Russia to not go out at night or talk to strangers lest they be abducted and have their organs stolen. </li></ul>
Human Parts Factory <ul><li>The Facts: Viable organs need to be harvested soon after death. In most cases, organs are taken from individuals who have been declared “brain dead” or are donated by living donors. From the looks of these photos the corpses have sat along time allowing decay to occur. </li></ul>
UPS Uniforms <ul><li>The Hoax: An Islamic group recently purchased over $32,000 worth of UPS uniforms from an EBay auction. The guys in brown may be delivering something more than presents next Xmas season! </li></ul>
UPS Uniforms <ul><li>The Facts: The FBI has thoroughly investigated and found this rumor to be false. Occasionally uniforms of all sorts wind up on EBay, most of which come from thrift stores. It makes little sense for an organization to spend so much money on items that are easily duplicated, like the standard brown and gold of UPS </li></ul>
The $250 Cookie Recipe <ul><li>You receive an e-mail relating a story of how a person was cheated out of $250 by Neiman Marcus for a cookie recipe. A variant uses the Waldorf Astoria and red velvet chocolate cake. </li></ul>
The $250 Cookie Recipe <ul><li>The Facts: Both Neiman Marcus and the Waldorf Astoria provide recipes free of charge any one who asks. </li></ul><ul><li>Prior to this rumor Neiman Marcus didn’t even serve cookies! </li></ul>
E-mail hoaxes <ul><li>Most e-mail center on getting free cash or prizes through forwarding e-mails. Needless to say no cash or prizes will be forthcoming. </li></ul><ul><li>Also pervasive is the “free stuff” e-mail hoax, where you receive an e-mail saying on November 1st Starbucks will be giving out FREE COFFE!. It’s not true! </li></ul><ul><li>Lastly, be wary of e-mails regarding missing children, these are more often than not hoaxes. </li></ul>
How to Spot Hoaxes on the Internet <ul><li>Supposedly free cash or prizes, appeals to help sick children, etc. in exchange for forwarding e-mails </li></ul><ul><li>Warnings about virus threats. Please let all your friends know by forwarding e-mails </li></ul><ul><li>Dire warnings about products, companies, government policies, or coming events </li></ul><ul><li>Information “they don’t want you to know about” like miracle cures and amazing devices, are being kept from you by the government! </li></ul>
Internet Phenomena <ul><li>Leave Brittany Alone! </li></ul><ul><li>Rickrolling </li></ul><ul><li>LoL Cats </li></ul><ul><li>All Your Base </li></ul><ul><li>Numa Numa guy </li></ul><ul><li>Post a Secret </li></ul><ul><li>Angry German kid </li></ul><ul><li>Star Wars Kid </li></ul><ul><li>Scambaiting </li></ul><ul><li>Myspace </li></ul>
My Space <ul><li>My Space is a social networking website offering an interactive, user-submitted network of friends, personal profiles, blogs, groups, photos, music, and videos for teenagers and adults internationally. </li></ul>
Embarrassing E-mails Blunders (think before you hit send) <ul><li>An attorney was fired over e-mail exchange regarding $8 dry cleaning bill. </li></ul><ul><li>A police dispatcher accidentally e-mailed 14,000 law enforcement officials when her yogurt went missing from the fridge. </li></ul><ul><li>A vice president accidentally sent details of all his employees’ salaries on a company group email. Realizing his error, he set the fire alarm off to clear the office before deleting the email from every inbox. </li></ul>
<ul><li>A schoolgirl found herself receiving emails containing top secret information from the Pentagon after being accidentally added to an e-mail list by a navy commander. </li></ul><ul><li>When black secretary Rachel Walker announced her resignation from his firm, lawyer Adam Dowdney emailed a colleague saying: "Can we go for a real fit, busty blonde this time?” A remark which cost him $20,000 in a lawsuit. </li></ul>
Scammers <ul><li>Scammers: These are the easiest group of people to understand. They want to cheat you and take your money! Why? There are lazy and its beats working for a living or being a real criminal and risking getting shot and/or doing hard time. The internet allows them to send out millions of e-mails and they only need one gullible person to take the bait. </li></ul>
Hoaxers <ul><li>Hoaxers: Some hoaxes are started accidentally by good natured people who simply don’t realize that the information they are spreading is false </li></ul><ul><li>Some are created deliberately to harm a person or an organization’s reputation </li></ul><ul><li>Some are created to draw attention to a social problem </li></ul><ul><li>Some are created to satirize a popular practice or phenomena </li></ul><ul><li>Some are created with the purpose of instilling fear, uncertainty and doubt about strangers, foreigners, newer technology, etc. </li></ul><ul><li>Lastly some hoaxes are perpetrated simply to prove how smart the hoaxer is by fooling us all! </li></ul>
Phenomena <ul><li>Phenomena: Memes , like genes are units of human culture. No one can really explain why some catch on and others do not. A definite paradigm shift with the internet is the idea of no more gate keepers. Viewer produced and controlled content and the “in-joke” are king. Sitcom type humor and tired TV dramas are dead! </li></ul><ul><li>The anonymity of the internet tends to work against the old saying, “If you can’t say something nice…” Shaden Freuda: German for happiness at the misfortune of others. Laughing at idiots and ridiculing them is considered fun and a moral obligation. </li></ul><ul><li>“ HEY LOOK! This person is a total train wreck! LOL!” </li></ul>