LECTURE V
COMMON TYPES OF
INTERNET FRAUD SCAMS
COMMON TYPES OF INTERNET
FRAUD SCAMS
• A. BOILER ROOM
In business, the term boiler room refers to an
outbound call center selling questionable
investments by telephone. It typically refers to a
room where salesmen work using unfair,
dishonest sales tactics, sometimes selling foreign
currency stock, private placements or committing
outright stock fraud. The term carries a negative
connotation, and is often used to imply high-
pressure sales tactics and, sometimes, poor
working conditions.
• B. ROMANCE SCAM
Romance scams try to lower your defenses by
appealing to your romantic or compassionate side.
They play on emotional triggers to get you to
provide money, gifts or personal details. Scammers
target victims by creating fake profiles on
legitimate internet dating services. Once you are in
contact with a scammer, they will express strong
emotions for you in a relatively short period of time
and will suggest you move the relationship away
from the website, to phone, email and/or instant
messaging.
• C. LOTTERY SCAM
An email, letter or text message from a
lottery company arrives from out of
nowhere. It will advise you that you have
won a lot of money or fantastic prizes—in a
lottery or competition you did not enter.
Lottery scams will often use the names of
legitimate lotteries, so that even if you do
some superficial research, the scam will
seem real.
• D. BANKING AND ONLINE ACCOUNT SCAM
d.1 CARD SKIMMING
Card skimming is the illegal copying of information
from the magnetic strip of a credit or ATM card. The
scammers try to steal your details so they can access
your accounts. Once scammers have skimmed your
card, they can create a fake or cloned card with your
details on it. The scammer is then able to run up
charges on your account. Card skimming is also a way
for scammers to steal your identity or personal details
and use it to commit identity fraud. By stealing your
personal details and account numbers the scammer
may be able to borrow money or take out loans in your
name.
• d.2 PHISHING
The word phishing comes from the analogy that
Internet scammers are using email lures to fish for
passwords and financial data from the sea of
Internet users. Phishing, also called brand
spoofing is the creation of email messages and
Web pages that are replicas of existing, legitimate
sites and businesses. These Web sites and emails
are used to trick users into submitting personal,
financial, or password data. These emails often
ask for information such as credit card numbers,
bank account information, social insurance
numbers, and passwords that will be used to
commit fraud.
The goal of criminals using brand
spoofing is to lead consumers to believe
that a request for information is coming
from a legitimate company. In reality it
is a malicious attempt to collect
customer information for the purpose of
committing fraud.
• d.3 EMAIL SPOOFING
Email spoofing is the creation of email messages
with a forged sender address something which is
simple to do because the core protocols do no
authentication. Spam and phishing emails
typically use such spoofing to mislead the
recipient about the origin of the message. The
word “spoof” means “falsified”. A spoofed email is
when the sender purposely alters parts of the
email to masquerade as though it was authored
by someone else.
• E. NIGERIAN SCAMS
Also called 419 scam, are a type of fraud
and one of the most common types of
confidence trick. The number “419” refers to
the article of the Nigerian Criminal Code
dealing with fraud. The scheme begins once
a consumer receives a letter concerning the
“request for urgent business transaction”
usually the transfer of millions of dollars, are
being sent out to consumers and business’
via mail, email and fax transmission.
Typically, after receiving a letter a consumer
would respond either by phone, fax, or
email. The response would be a request for
further information on the requirements and
procedure for the transaction. Once contact
is established, the writer of the letter will
normally ask for an upfront processing fee
and in some cases arrange for a meeting to
discuss the transfer of funds.
• e.2 CHECK OVERPAYMENT SCAM
If you are selling something over the internet or
through the classifieds, you may be targeted by a
check overpayment scam. You might receive an
offer from a potential buyer often quite generous
and accept it. The scammer then sends you a
check, but the check is for more money than the
agreed price. The scammer will invent an excuse
for the overpayment. For example, the scammer
might tell you that the extra money is meant to
cover the fees of an agent or extra shipping costs.
The scammer might just say that it was a mistake
they made when they wrote the check.
The scammer will then ask you to refund the
excess amount—usually through an online
banking transfer or a wire transfer such as
Western Union. The scammer is hoping that
you will do this before you discover that
their check has bounced. You will have lost
the money you paid into their account, and
if you have already sent the item you were
selling, you will lose this as well. At the very
least, the scammer will have wasted your
time and prevented you from accepting any
legitimate offers.
• e.3 INHERITANCE SCAM
An inheritance scam is when a scammer contacts
you out of the blue to tell you that you’ve been
left, or are entitled to claim, a large inheritance
from a distant relative or wealthy benefactor who
has died overseas. The scammer will pose as a
lawyer, banker or other foreign official and will
advise that the deceased left no other
beneficiaries. Some scammers will provide a
made-up name for your supposed relative. Others
will use publicly available family history websites
and gather the names of genuine deceased
relatives to make the scam seem more
convincing.
• e.4 EMERGENCY OR “GRANDPARENT”
SCAM
Emergency Scam or sometimes referred to as
the Grandparent Scam has been around for
years. In the typical scenario, a grandparent
receives a phone call from a con-artist
claiming to be one of his or her
grandchildren. The caller goes on to say that
they are in some kind of trouble and need
money immediately. Typically they claim
being in a car accident, trouble returning from
a foreign country or they need bail money.
THAT’S A WRAP!
THANK YOU FOR
LISTENING!
