Baker Fraud Report

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A  scam by any other name: Scammers building relationships onlie and then encouraging victims to put money into a crypto account, where it supposedly appreciates but can never be withdrawn, may be the most common fraud in the world right now.  Scammers call it pig butchering, and some enforcement agencies have followed suit. But now Interpol urges use of “romance baiting” instead.  The Fraud Report will continue to use the term crypto romance fraud.  What do you think?

Nigeria arrests 792 for crypto romance fraud; man were from China

Consumer Reports: Scams impersonating banks are becoming increasingly common, and how they work

FTC adopts final Junk Fee Rule, requiring hotels and live event tickets to disclose actual final price before getting consent to purchase; should end resort fees and all mandatory charges up-front; must include price of taxes or shipping and handling

Full report here

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New FTC data spotlight report shows job scams up very sharply

• Complaints tripled from 2020 to 2023
• First half of 2024 up sharply; losses of $220 million
• These “jobs” often involve tasks like clicking on websites
• Initial contacts usually by text
• Have victims send crypto

Russia raids network of call centers with 100,000 victims in 50 countries; arrest 11; make $1 million per day

WSJ: Brian Kregs and his fight against hackers

Indiana: Man in China indicted for malware that hacked tens of thousands of firewalls

Should we deport scammers and those who knowingly help them?  There are many people present in the US who are integrally involved in scam operations.   If they have overstayed a student visa or are convicted of fraud should they be deported after serving their sentences?  Homeland Security tells me that policies charge ten years or more ago, and that these people are now allowed to stay in the US.

Full report here

Major Interpol effort against fraud involving 19 African countries nets arrests of over 1000; take down websites; involved BEC fraud, ransomware, extortion online and other scams

China hacks telecom companies worldwide

FTC amends Telemarketing Sales Rule to cover calls from Tech Support scams; extension will also allow FTC to sue those who aid and abet that fraud

Germany busts huge online shopping fraud operation; seizes 50 servers across Europe, arrests two men

Full report here

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BBB updates my study dealing with online shopping fraud

• BBB complaints nearly doubled between 2021 and 2023
• Losses reported to the FTC in 2023 were $400 million
• Complaints have declined in Canada

Los Angeles: Five indicted for phishing scheme that got people to provide credentials and then used those to steal millions in crypto

Meta takes down 2 million accounts in effort to fight crypto romance fraud linked to scam call centers in Cambodia, Philippines, Myanmar, United Arab Emirates and Laos

Houston: Man from India gets 16 years prison; laundered money and hired money mules for scam from India that called impersonating law enforcement and telling victims that they had to pay fine by buying gift cards; handled $3.5 million

Full report here

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Minneapolis: Man gets five years prison for telemarketing scheme selling magazine subscriptions; ordered to repay $19 million 

FTC says robocalls complaints down over 50% since 2021

Useful research on consumer education needed!  Many of us spend much time and resources developing consumer education materials, and it would be great to find things that make those more effective. Professor Anthony Pratkanis has compiled and conducted research showing that consumers simply don’t pay attention to most warnings or, worse, become defensive and shut them down.  The FTC has tried to combat this with their “pass it on” campaign, directed to tell people they are educating them not to make them afraid but instead to educate themselves so they can help their friends, families, and neighbors avoid frauds. Anthony’s idea is to empower people to become fraud fighters. But he says there hasn’t been research to examine this approach and show it is more effective. Anyone interested in taking this on?

Online shopping.  We are rapidly approaching  the holiday shopping season, and online shopping is close to the top of the list of scams consumers file complaints about.  So be careful, and this is a place where consumer education can do a great deal of good. So stay on the information superhighway, avoid dodgy sites on social media, and file complaints if ripped off.

WSJ: Fraud with paper checks was up 400% last year

Full report here

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Who makes fake websites?  Jack Whittaker has long been involved in helping victims of pet frauds, which advertise and sell pets that don’t exist.  These are run from Cameroon, and no surprise the same scammers advertise lot of other goods that they never deliver. Jack interviewed many people in Cameroon who make the fake web pages these frauds use, and it is fascinating. His thesis, here, also explains why it is not easy to take down these web sites, since they use hosting and domain name services that are at least complicit. 

Where are we with scammers using Western Union & Moneygram to get money?  Both companies have been sued the FTC over allowing their services to be used by scammers to get money from victims, often with agents who were either scammers themselves or were complicit. It appears that these enforcement efforts have been largely successful. I’ve not seen a report on losses through either company for several months. Now the frauds often send people in person to pick up the money or have them use Bitcoin ATM’s.

Full report here

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There are no “safe” accounts. No one is asking for your money to protect it.  Over the last several years more and more consumers have been told that their accounts are at risk.  This seems to have begun with scammers calling and claiming to be with Social Security, and then transferring them to a supposed federal agent who told them that they were going to be arrested and their accounts would be frozen unless they transferred their money to the government to “protect it” temporarily before it was returned.  This is described in some detail in my study of government imposter frauds. There are, now, many variations of this scam. Sometimes they claim to be with a bank and say there is ID theft.  And there are other variations. But the common thread is that you need to give your money to someone trustworthy to protect it.  No one legitimate will ever do this.   I believe that this scam stems from India.

Digital arrest scams sweep India

India arrests 8 for “digital arrest” scams

New study shows Chat GPT can be used to do voice-based frauds; (The ChatGPT article is by computer scientists testing if the latest edition can be used to execute fraud; it is supposed to have safeguards to prevent its use in crime.  The researchers simulated being a victim while the LLM did the fraud — mostly on the back end of moving money around.  The key finding is that ChatGPT wasn’t useful for bank transfers and impersonating IRS agents.  However, credential theft from Gmail succeeded) 60% of the time, while crypto transfers and credential theft from Instagram only worked 40% of the time.  This sort of test is important to see if OpenAI and their products are living up to the hype).  

Win money for consumer education!  NACHA, the association that governs the electronic payment processing industry, announces a contest for short consumer education videos with theme of “Stand Against Scams”

• Does not focus on any particular type of scam or fraud
• Videos must be 60 seconds long
• Entries are due November 12
• One Grand Prize Winner: $5,000;  Second Place Winner: $2,500; e Third Place Winner: $1,000
• Entry rules here

Full report here

Singapore regulators adopt new regulations on banks and telecoms to help prevent scams or assume liability for losses

• Scams gaining access to bank accounts up 50% in 2023
• Losses totaled $484 million
• Banks must give 12 hour cooling off period when there is a login from a new device
• Notify account holders of suspicious activity
• Allow consumer to block access to their accounts
• New regs on text messages as well

Black Axe: Nigerian’s organized crime group involved in not only scams but also drugs and prostitution – and violence

India being hit by wave of calls impersonating police or banks, telling people they may be arrested, and demanding money; referred to there as a “digital arrest”

Can the FTC’s new Click to cancel rule survive legal challenges?  The FTC’s new rule making it easier to cancel online subscriptions is very popular, and many applaud it.  But there have already been many legal actions filed against the Rule.  This rulemaking began in the Trump administration.  Congress many years ago imposed significant procedural steps that the FTC had comply with before adopting an industry-wide rule.  The FTC seems to have violated those in an effort to get the rule adopted before election day.  The potential problems are highlighted in the dissent by Commissioner Holyoak.  There are ideas here that bipartisan and could really help consumers.  But in its haste the FTC may have left itself vulnerable to challenges.

full report here

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 FTC releases annual report to Congress on scams and older victims

• Seniors less likely to be victims but lose more money
• But five times more likely to be victims of tech support fraud
• Three times more likely to be subject to lottery/prize frauds
• Lose more through bank to bank transfers and crypto

Peruvian man gets 98 months prison; ran call centers there that called US Spanish speakers and threatened to arrest or deport them unless they paid for products they had not received; 1100 victims, who paid $700,000

Scam losses in Australia totaled $2.74 billion last year; top scams were investments, romance fraud; tech support, phishing, and payment redirection (business email compromise

Full Report here

Major data breach of telecom companies by Chinese actors
 
Internet Wayback machine hacked; 31 million passwords lost

FTC finalizes new Rule that makes it easier to cancel subscriptions and members; 3-2 vote

Hong Kong: Police arrest 27 for crypto romance fraud, seize training materials; losses of $360 million 

Full report here