I always admired a good scam in the movies. "The Sting" is a classic. Unfortunately, the Internet has proved to be one of the finest methods ever conceived for propagating scams.
I am impressed at how many of the e-mail messages that I receive are scams.
I would like to enumerate here some of
the most common that I see.
Phishing
This is a more recent phenomenon that those below. Phishing involves getting a e-mail message disguised as coming from a trusted site letting you know that, for example, there have been charges on your account and that they want to verify that they are accurate. Almost all of the phishing scams I have received are mimics of PayPal. They say something such as the following: "We recently reviewed your account, and we need more information about your business to allow us to provide uninterrupted service. Until we can collect this information, your access to sensitive account features will be limited. We would like to restore your access as soon as possible. We apologize for the inconvenience."
Then create the appearance that they are trying to help you to resolve a potential dispute. They use the exact graphics from PayPal. When you click on the link you are going to the site of a criminal who is trying to get you to give them your account info. It may look exactly like PayPal but it is not. The URL may even contain "PayPal" as part of the name.
One message I received said, "We have reason to believe that your account was accessed by a third party. Because protecting the security of your account is our primary concern, we have limited access to sensitive PayPal account features. We understand that this may be an inconvenience but please understand that this temporary limitation is for your protection."
Read what PayPal
has to say about these messages.
The Nigerian Scam
I receive about two of these each month. They usually are sent by an e-mail account from a free sign-up service such as Hotmail
or Yahoo. (I am not stating or implying that these services are responsible. I merely mean that they are the ones that I have
seen used.)
The message goes something like this:
Dear Dick Lepre,
After due deliberation with my colleagues, l decided to forward to you this proposal. We want a reliable person who could assist us to transfer the sum of (US$30.5M) Thirty Million, Five Hundred Thousand US Dollars only into his account.
This fund resulted from an over-invoiced bill from a contract awarded by us under the budget, allocated to my ministry and the bill was approved for payment by the concerned ministries. The contract has been executed. Commissioned, the contractor has been paid his actual cost for the contract. We are now left with the balance of US$30.5M as the over-invoiced amount, which we have deliberately over estimated for our own use. But under our protocol division, civil servants are forbidden to operate or own a foreign account. This is why l contacted you for an assistance. We have agreed that you will be entitled for 30% of the total sum, 60% for us while 10% for any expenses incurred while transacting the business.
As you may rightly want to know l got your address from our Chambers of Commerce and Industry. I am a top official with the Nigerian National Petroleum Corporation (N.N.P.C). We the officials involved in the deal have put in many years of service to our ministries. We have been exercising patience for this opportunity for so long and to most of us, this is a life time opportunity we cannot afford to miss. This transaction is very much free from all sorts of risks.
======
Now this is tempting. I could really use 30% of $30.5 million. Heck, I could buy a decent house in Palo Alto with $10 mill. The
problem is that the activity proposed, apart from being totally illegal, is bogus. These folks use this as an excuse to get your
bank info and then wire transfer funds not TO but FROM your account.
This is a great scam because it puts the victim in the uncomfortable
position of having to admit that he was trying to do something illegal
and got scammed. Not a good spot to be in.
The Nigerian e-mail scan is a continuation of years of similar scams that were in previous times carried out by mail. Some of these used fake stamps to mail the fake letters. In March of 1998 the USPS seized and destroyed 2 million of these letters. The Postal Service also said that "American consumers are being scammed to the tune of $100 million annually by international con artists, who send the letters primarily from Nigeria and other West African countries".
There are stories that some folks have actually been lured to Nigeria, been robbed and met their demise subsequent to receiving one of these letters.
The USPS has a report on the scam at:
http://www.usps.gov/postalinspectors/pressrel.htm
Stock Pumping-and-Dumping
These arrive as friendly bits of advice. They have subjects such at MAJOR "BUY" ALERT or "SIZZLER" INTERNET STOCK! or EMERGING BIOTECH TRADING UNDER $1!!! and go something like this:
Company: XYZ Corp.
Symbol: XYZ
Price: 2 1/2 ($2.50/share)
XYZ is a provider of global Internet and Intranet digital networking solutions. XYZ has strategic alliances with MCI WorldCom, BellSouth Corp. and PSINet, among others.
XYZ's business model, according to independent analysts, is projected for unprecedented exponential growth. XYZ is rated an immediate and "STRONG BUY".
"Unprecedented exponential growth" sounds impressive. I received this e-mail over a year ago. Only trouble is - this stock is now trading at 8 cents a share.
A "pump and dump" takes more than just spam. If you wanted to execute one you would first find an obscure public company, probably traded OTC. Find one with a share price of $1.00 or less, one that has few shares outstanding with relatively low daily trading volume. Can you say "volatility?" You do not need to own a majority of the shares. You do not even need to have anything to do with the company. To "pump and dump" XYZ buy all of XYZ you can afford without attracting attention to yourself. Hype the stock as above. Spam makes the promotion of the stock inexpensive. This is great because it gives you more money to buy shares. This is the "pump". Once the suckers buy enough XYZ stock such that it goes up in price, without warning, sell every last share of XYZ that you have. If enough suckers are there to buy your stock you will be able to sell your shares before the price plummets. This is the "dump".
I am not suggesting that anyone do the above. This is an illegal, reprehensible activity. I get several emails a week pitching "pump and dumps". I am suggesting that you ignore any such messages.
I am not stating or implying that all stock tips e-mail or newsletters are bogus. Some are. Some are not.
Do not buy any stock without adequate research. Do not think that even though this is a scam you can make money by buying before the price spikes and selling before it falls. You are better off buying Lotto tickets (I think).
An elaboration of this and other Internet fraud is contained on the SEC page at: http://www.sec.gov/consumer/cyberfr.htm
There is a good article on "pump and dump" on CNN. See: http://cnnfn.cnn.com/2000/04/25/investing/q_stockscam/
The Chain Letter, Get Rich Quick Scam
Just after I wrote the title above the following e-mail arrived.
Dear Friend:
"Making over half million dollars every 4 to 5 months from your home for
an investment of only $25." THANKS TO THE COMPUTER AGE AND THE INTERNET!
BE A MILLIONAIRE LIKE OTHERS WITHIN A YEAR !! Before you say "Bull",
please read the following. This is the letter you have been hearing about on
the news lately. Due to the popularity of this letter on the Internet, a national
weekly news program recently devoted an entire show to the investigation of
this program described below , to see if it really can make people money. The
show also investigated whether or not the program was legal. Their findings
proved once and for all that there are "absolutely no laws prohibiting
the participation in the program and if people can follow the simple instructions,
they are bound to make some mega bucks with only $25 out of pocket cost".
This is what one had to say: "Thanks to this profitable opportunity. I was approached many times before but each time I passed on it. I am so glad I finally joined just to see what one could expect in return for the minimal effort and money required. To my astonishment, I received total $ 610,470.00 in 21 weeks, with money still coming in". Ms. XYZ, Fort Lee, New Jersey.
If you would like to make at least $500,000 every 4 to 5 months easily and comfortably, please read the following... THEN READ IT AGAIN and AGAIN !!! FOLLOW THE SIMPLE INSTRUCTION BELOW AND YOUR FINANCIAL DREAMS WILL COME TRUE, GUARANTEED! INSTRUCTIONS: *** Order all 5 reports shown on the list below. **** For each report, send $5 CASH, THE NAME & NUMBER OF THE REPORT YOU ARE ORDERING and YOUR E-MAIL ADDRESS to the person whose name appears ON THAT LIST next to the report. MAKE SURE YOUR RETURN ADDRESS IS ON YOUR ENVELOPE TOP LEFT CORNER in case of any mail problems. **** When you place your order, make sure you order each of the 5 reports. You will need all 5 reports so that you can save them on your computer and resell them. YOUR TOTAL COST $5 X 5 = $25.00. ****
Within a few days you will receive, via e-mail, each of the 5 reports from these 5 different individuals. Save them on your computer so they will be accessible for you to send to the 1,000's of people who will order them from you. Also make a floppy of these reports and keep it on your desk in case something happens to your computer.
(The letter ends with 4 names and addresses.)
This is a classic pyramid or Ponzi scheme. The letter usually finished with a bogus assurance that this is legal. It claims that since you are buying and selling reports the whole thing is legal. This is false. This is illegal because the object furnished (the report) does not have an inherent value of anything approaching $5.00. The sucker play is that the risk ($20.00) is small compared to the upside, so some people try it. Do not do this it is foolish and illegal. This activity violates Title 18, United States Code, Section 1302.
Read the USPS's comments at:
http://www.usps.com/postalinspectors/fraud/chainlet.htm
Work-at-Home Scams
These scams tell you that you can make hundreds or thousands of dollars a week working at home. They will get money from you "up front" telling you that you will get paid for some activity such as stuffing envelopes.
Be wary of anything that requires upfront payment from you, states that "no experience is necessary", does not ask for your work experience and sounds just to good to be true.
In fact, there are common threads among all of the scams discussed above: 1)
they all sound too good to be true; 2)they
USE A LOT OF CAPITALIZATIION and 3) Wow!!! do they use a heck of a lot exclamation
points!!!!!
Dick Lepre
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