Baker Fraud Report

Baker Fraud Report – News you can use

January 30, 2020

Sign up for weekly reports or pass along to a friend or colleague

Top Stories

DOJ sues to stop two US companies from handling robocalls coming from India; one TRO has been entered so far

• Both were “gateway” carriers; allowed internet based calls to get access to the US phone system
• Both knew about the problems with their clients
• At least one seems to have done the same for Canada and Australia
• Money paid by victims went to crook in the US, who made cash deposits at US banks to pay Defendants
• Responsible for hundreds of millions of calls
  • Social Security Administration impersonator calls
  • IRS imposter calls
  • Immigration calls
  • Tech support
  • Advance fee loans
• Court complaints linked at bottom of DOJ release
• Map shows number of calls per state by Defendant Tollbooth

FTC announces top scams reported to them in 2019

• Imposter scams were the biggest category; impersonating both businesses and government agencies
• Most frequent imposter scam was social security; with 166,190 reports to FTC and median losses of $1500

Three men sentenced to prison for their role in a lottery fraud scheme based in Costa Rica that defrauded elderly of at least $11 million; impersonated FTC and other agencies in their calls

Atlanta, Georgia: Eight sentenced to prison for roles in India-based IRS and payday loan collection fraudPolice in Indonesia arrest three; infected e-commerce sites worldwide with malicious code to steal credit card numbers entered on them

Full report here

Baker Fraud Report – News you can use

January 23, 2020

Sign up for weekly reports or pass along to a friend or colleague

Top Stories

Ransomware groups are now stealing data first, so if victims don’t pay they can leak damaging information

American Bankers study shows attacks on bank accounts are growing

• Losses increase; $25.1 Billion in 2018; up from $19.1 billion in 2019
• 47% of the losses to consumer accounts were from fake checks
• Fake check fraud continues to grow

Do you need some consulting work or an expert witness? Let me know and let’s chat.

Tip of the week.  Let’s use Valentine’s Day to warn about romance fraud.  Feel free to use or share the BBB studies I’ve done on romance fraud and on romance fraud victims being used as money mules.  This area is one of the largest losses that the FBI and FTC see. And there is a serious suicide risk for victims. 

Read the entire report here

https://mailchi.mp/03fc4bafb40e/baker-fraud-report-1313049?e=115aca7ac6

Top Stories
Houston, Texas: Man from Ahmedabad, India pleads guilty to operating and funding fraud call centers in India

• Extradited from Singapore
• Callers impersonated IRS, US Customs and Immigration, Canada Revenue Agency and Australian tax office
• Also made fraud calls on debt collection, payday loans and government grants
• Admitted responsible for $25-65 million in losses
• 24 US-based defendants already sentenced so far

Spain arrests 40 for online extortion

• Contacted people who had been at a prostitution web site
• Demanded money, threat to have enforcers break legs or shoot them
• Used money mules to handle money
• At least 4000 victims

  Agari releases new report on Ancient Turtle BEC fraud

• Fake emails ask employees to send along aging report of money owed by customers
• Then crooks email customers, impersonating the business that is owed money
• Directs them to send payment to mule bank accounts

Here is this week’s Fraud Report

https://mailchi.mp/699baee2abf7/baker-fraud-report-1309621?e=115aca7ac6

Pindrop releases 2017 report on fraudulent calls to customer service centers

The rauds are not only calling us directly, they are calling our banks and credit card companies trying to get more information in order to steal our money and benefits.  A new report provides some startling insights into how widespread this fraud is and how successful it can be.

There are call centers who handle customer service calls for banks, credit card companies, major retailers, and a variety of other entities.  We can call one and change our address or password, pay bills, and even withdraw money.  The report says that call centers are the “weakest links in online security.  61% of fraud losses from account takeovers involve the call center.”  Pindrop estimates that losses from calls to call centers were $14 Billion last year.

How does the call center know it is really talking to the right person?  Obviously they require a variety of personal information to authenticate that we are who we say we are.  But as a result of data breaches and underground traffic in personal information enterprising crooks may be able to convince the call center that it is dealing with its real customer.  For example, a caller pretending to be you may claim they have lost their credit card and ask that a replacement be sent to a new address controlled by the fraud.  And of course if they get access to your bank account they can just steal the money.

Organized crime has people around the world that can spend their days on the phone with call centers.  The frauds can spoof caller ID’s, use cheap mobile phones, Skype, or Google Voice to place the call, and use voice distortion software – all to hide their actual location.  Pindrop’s technology allows it to determine the actual location of the caller and thus whether the caller is a real customer.

Pindrop reports that fraud on call centers increased 113% between 2015 and 2016, and that fraudulent calls doubled in volume during that time, from one in every 2000 calls to one in every 937.  For US call centers 83% of such calls are coming from outside the United States.

Credit card issuers are one of the most frequent targets of this fraud, with 1 out of every 800 calls received coming from a fraud.   Banks have fraudulent calls coming at the rate of 1 in every 867 calls.  Insurance companies are also frequent targets, as are retailers.  Frauds often try to obtain access to loyalty cards or points (think frequent flyers or hotel points) that can be turned into money.

The highest fraud rate for a single industry was for device insurance, the policies people have for lost or stolen phones.  Fraudulent calls were 1 of every 194 last year, a 55% increase.

Have you received an email that looks like it came from someone you know, but it only had a hyperlink. What is that all about?
The FTC’s Chicago office has brought two cases against the people that use these spam emails to sell bogus diet pills.

Several years ago crooks hacked the Yahoo email accounts of a massive number of people, also obtaining the email contacts in these hacked accounts. Thus if they had hacked the account of Bob Heinlein, all of his contacts would receive an email containing a hyperlink, perhaps with a subject line such as “Hi, have you seen this?”

Those who click on the links are taken to web pages that look like articles by real consumer reporters, who claim that they tried diet pills and were “astonished” at how well they work. These fake news pages also claim that celebrities such as Oprah Winfrey use the pills, and contain fake testimonials from supposed users. The fake news pages have a hyperlink to one of the web sites where victims can order the Defendant’s worthless diet pills.

The FTC says that the Defendants in the Fowler case made at least $1.3 million from their efforts, and in Sale Slash at least $43.4 million.

BBB Releases First Annual Report for Fraud Complaints Made to Scam Tracker

As I’ve reported before, the Better Business Bureau has a relatively new program to capture complaints about fraud.  Those who file a complaint about a fraud with the BBB can also agree to talk to the news media and to share the complaint with law enforcement.  Scam Tracker complaints can be filed online here or by calling most local Bureaus. The Scam Tracker also has a useful feature that can graphically display all the fraud complaints filed by people in your area.  This really helps demonstrate just how widespread fraud really is.  Click here to see a map of your area or neighborhood and what frauds are being reported.

The BBB has just released a first ever report detailing the fraud complaints it received in 2016.  It includes some great features.  First, it breaks the frauds down into understandable categories and explains very nicely what is included. Second, it attempts to determine what age and sex is most often ripped off by each fraud.  It found that those 18-24 were overall most likely to be fraud victim, and those over 65 were the least likely to report a fraud.  However, the median actual dollar loss was highest for the over 65 group.  Third, they found that women were twice as likely to report a fraud as were men.  (But not that men are exposed to fraud less often).

The BBB calculated that the three most risky frauds for those over 65 were:

1. Family/friend emergency (grandparent scams);
2. Sweepstakes/Lottery Prizes (Jamaican lottery frauds); and
3. Travel/Vacations (bogus ads to rent properties and timeshare resale fraud)

The most interesting innovation in the BBB report, though, is its effort to apply a “risk index” to complaints.  As we all know, of the billions of robocalls that are made only a small fraction of those receiving the calls are actually defrauded.  (Of course enough do get defrauded that the calls make money for the frauds).  In addition, many people file complaints about robocalls or other fraud attempts even when they do not actually lose money (such complaints are still valuable to law enforcement because they can help show patterns).

The BBB has attempted to calculate three factors to determine the riskiest frauds.

1. Exposure (how likely are you to be exposed to the con?)
2. Susceptibility (if you are exposed, how likely are you to lose money? And
3. Monetary Loss (if you lose money, how much is it likely to be?

Using that formula the Report concludes that the ten riskiest frauds are:

1. Home Improvement Scams (the fraudsters actually appear at your door and ask to do work)
2. Fake Checks and Money Orders (See the Baker Fraud Report explaining these)
3. Employment Scams (These often include fake checks)
4. Online Purchase Scams (goods ordered from a web site that are never delivered, or that again involve a fake check in an overpayment fraud); and
5. Advance Fee Loan Frauds (you apply for a loan online or by phone, are asked to pay fees for things such as insurance but there is no loan every made).
6. Investment frauds
7. Romance Scams (see Baker Fraud Report for more).
8. Tech Support Frauds (see Report on these here)
9. Family/Friend Emergencies (Grandparent frauds), and
10. Sweepstakes/Lottery/Prizes (see Report on Jamaican Lottery Frauds)

The FTC announced this settlement with Joel Treuhalf and his company on February 15.  The FTC alleges that the defendant hired “runners” in Florida to pick up the money victims sent after being defrauded by IRS impersonators.  The runners went to Western Union and MoneyGram outlets to collect the money, kept 7% for themselves, and then deposited the rest into several different bank accounts.  The deposited money then made its way to India.  The FTC alleges that “In less than eight months, from July 2015 to February 2016, Defendants collected more than $1.5 million from approximately 3,000 consumers throughout the United States.”  Click here to read more about money mules.

Can you hear me frauds: No evidence that this is actually happening

Over the last several weeks there have been many news reports asserting that there is a new fraud underway in which a person receives a phone call that asks “Can you hear me.”  When the person answering the phone says “Yes” the call ends.  This is then supposedly used to sign people up for things they don’t want and didn’t intend to buy.

But is this true? Is this happening?  Snopes.com has reported that they have been unable to verify that this is actually happening.  I have also talked to the Canadian Antifraud Centre, which handles mass marketing fraud complaints from all Canadian (and even American) consumers, and they tell me that they have seen absolutely no evidence that this is a real fraud tactic.

Do scam tape record victims?  Absolutely.  Telemarketing frauds, especially those that take payment by credit cards, routinely tape record a “verification” after they make a deceptive sale.  They use these recordings to challenge those who later realize that they have been defrauded and challenge the transaction with their credit card company.  Of course these verifications recordings do not include the deceptive claims.  The FTC has also seen companies that claim they have such recordings even when they do not.  Other frauds even doctor these tapes to make it appear that victims agreed to the charges when they really did not.   This tactic may stave off complaints by individual challenges, but I have never seen this work as a defense in an FTC consumer fraud case.