Insider Scam Dictionary
-- Some common terms you need to know
-- Some common terms you need to know
419 scams. Named for the section number of Nigerian state law that covers all manner of con tricks coming from that country -- but mostly scams in which you're told you've won a lottery, inherited a fortune or can help smuggle money out of the country. Very often victims are targeted on chat lines and convinced the person they are chatting with is real, the new love of their life and needs cash because of a family emergency; all of which require upfront money from you. For obvious reasons, these are also known as Nigerian scams.
Canadian Lottery You are notified that you have won the Canadian lottery or have been selected as a winner in a drawing. You have won a 6 figure amount. You receive a check for several thousand to pay the taxes and fees. You must cash the check and forward the money by MoneyGram to some destination in Canada to pay the fees. The check is counterfeit. It is illegal for a US citizen in the US to enter a foreign lottery.
809/890 scams. You get a voicemail or an email asking you to call a number beginning with either 809 or 890. These connect to the Dominican Republic and you may be charged a small fortune, via your phone bill, for each minute you're on the line.
Frozen Credit cards This scam usually is sent by phone text or email supposedly from the customer’s bank and alerts the receiver that their credit card has been locked. To unlock the card the receiver is directed to call an 800/866 number. That number connects not to a bank but an automated system that prompts the customer to enter and verify the credit card number and security code. The credit card is immediately compromised.
Advance fee. This terms covers all kinds of tricks (including 419 scams mentioned above), where you're asked to pay a fee upfront before you get your winnings, a loan or some other kind of cash. Advance fee loans are illegal; bona fide contest winners don’t pay first; real grants don’t require upfront fees either.
Affinity scams. "Affinity" means a close resemblance or connection. When someone you know well -- at your church, for instance -- recommends a way of making money or buying a bargain, which turns out to be bogus (often they may do this innocently), that's an affinity scam.
Badge charity scams. Tricksters claim to be raising money on behalf of the emergency or armed services (the people who wear badges). 9/11 victims and Iraq wounded soldiers are common groups the scam is supposed to benefit.
Bait and switch. These scammers advertise bargains that lure in their victims, who are then told the item is no longer available. They either get a cheap substitute for the same price, or are asked to pay for a much more expensive alternative. Bait and switch tricksters are also at work in the re-mortgage business, and these scams are even more prevalent in a bad economy.
Black dollar or black money scams. The crook claims to have smuggled a fortune in currency into the country, by dyeing them black. The dye supposedly can be removed with a mystery fluid. The victim is fooled by a phony demo and lured into buying more of the "currency" which is actually just worthless paper.
Cramming. When you buy a service (typically a phone service), the provider bills you for extras you either didn't order or they don't provide. Typically you need to contact the business, cancel the extras and notify your credit card company.
Flim flam. The most common form of this crime involves confusing a store cashier by trying to change large denomination notes and swapping money back and forth, until the cashier loses track of the transactions -- and a bunch of money.
Key logging. Victims of this crime unknowingly download a program onto their computers that monitors every key they press and sends a record back to the scammer, who then uses the information for crime, usually identity theft. Key logging can be installed and monitored remotely.
Money mules. People who launder stolen money, either knowingly or innocently, from the proceeds of crime. Many bandits are loading gift cards with stolen money. The gift cards are portable and innocuous. Collect and check any gift/credit cards held by bandits.
Mystery shoppers. Victims are told they've been selected to participate in a store security or customer service operation. The letter often includes a check, which hooks them into the payment forwarding scam.
Overpayment scams/ Payment forwarding. A whole set of scams in which victims receive forged checks and money orders (e.g., for mystery shopping, house rental or auction sales, Craig’s list sales) and are asked to cash it, keep the asking price and maybe 10% for themselves and forward the remainder as a MoneyGram to a third party. After they do, the check bounces. Payment forwarding scams are similar to overpayment scams.
Repackaging Scheme A person is recruited to receive packages as a middleman “to save postage and shipping costs for the customer, then repackage and forward packages to someone else usually in Eastern Europe/Canada/Nigeria. The packages are actually merchandise purchase with stolen credit card information and destined for the black market in the receiving country.
Pigeon drop scam. A "mark" or "pigeon" is convinced to give up a sum of money in order to secure the rights to a larger sum of money, or more valuable object such as (worthless) jewelry. The black dollar scam (see above) is a version of this. Victims are usually targeted in mall parking lots.
Phishing. There are several variations of this scam which invariably leads to identity theft.
- Phishing itself involves a spam email that takes you to a phony website made to look like the real thing, which asks you to key in personal information like passwords and bank details.
- Spear-phishing is the same crime targeted at an individual rather than sent out as spam.
- Whaling -- it's the same but this time the potential victims are "big fish" like company executives.
- Pharming actually takes you to the genuine website which has been hijacked by scammers.
Ponzi scheme. An investment scam that lures victims with the promise of big returns. Part of the money from later investors is paid to early investors to keep them happy. And so on, until the new investment dries up and the scheme collapses. Here's how to avoid being sucked into a Ponzi scheme. Think of Bernie Madoff.
Ransomware. A program you unwittingly download onto your computer that then scrambles all your data and won't unscramble it until you pay a fee.
Scareware. Usually a pop-up that appears on your screen with a hoax warning that your computer's been infected with a virus, and demanding you buy a program to remove it.
Skimming. Mostly, this refers to a process for capturing information from ATM and credit cards. A device is used (often sneakily installed on ATMs and store card machines) to record the information and pass it to the crooks. Bandits can and have used handheld skimmers as well. Stolen PII FII can be downloaded to any card with a magnetic strip from a skimmer device capable of writing as well as collecting data.
Slamming. Victims are tricked into changing their phone or energy utility provider. Often the service starts out cheaper but the price quickly goes up.
Spyware. Any computer program or part of a program that tracks your actions and reports them back to a scammer for the purposes of crime. See "key logging" above.
Spam. Its official name -- Unsolicited Bulk Email (UBE) -- says what it really is. Usually peddling questionable things like "miracle" medical treatments, designer label knock-offs and financial schemes. Variations include SpaSMS (spam sent in cell phone text messages) and Spim (sent via Instant Messenger programs).
Please become familiar with a website called snopes.com. Alot of "scams" or threats we hear are actually urban legends that just get recycled. The link for Snopes.com is below