Baker Fraud Report

We’re falling behind in the fight against fraud.   Though there are far more prosecutions now,  fraud continues to be a growing problem.  Over the last ten years fraud has really taken off.

FTC numbers of complaints and losses

2013:   over 1 million; $1.6 billion

2023:   2.6 million;      $10 billion

IC3 numbers of complaints and reported losses

2013:  262,813; $781,800,000

2023:  880,418; $12.5 billion

Three things I’ve learned as a lawyer.  Not all, always, but surely mainly true. 

1. Facts are stubborn things
2. The lawyer on the other side isn’t evil (even if their client is)
3. Juries make good decisions

Full report here

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Seven years of the Fraud Report. It’s hard to believe that we are beginning our eight year.

Warning!!  Obviously many in Southern California are now homeless. So rental scams are likely to be rampant there.  Here is my BBB study on this topic.

EFCC arrests 105, including four from China, operated scam hiring people to do fake hotel reviews, pay was to be made by crypto, but victims hired and who did the work could not withdraw their “pay”

UK looking at experiences of fraud victims government releases study

Miami: Nigerian man pleads guilty to inheritance fraud; sent letters to older people; got $6 million from 400 victims

Full Report here

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US Army solider arrested on claims he sold stolen ATT&T and Verizon phone records

US Postal Service faces increasingly big threat from employees stealing mail, working with crooks and scammers

Johnny Depp warns that public that AI scams are running ads pretending to be from him

Full report here

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Nigeria arrests nearly 800 people from crypto romance fraud ring operating from office tower

• 148 Chinese, 40 Filipinos, 1 Pakistani, 1 Indonesian, rest Nigerian
• Used WhatsApp accounts tied to German and Italian phone numbers

New Jersey: Dual Russian/Israeli citizen arrested in India; charged that he is developer of Lockbit ransomware; to be extradited to the US

CPFB sues owner of payment app Zelle, Well Fargo, Chase, JP Morgan, and Bank of America for not doing more to stop fraud on the app; alleges victims have lost $870 million over the last seven years

Major hack by China gets access to computer systems at the US Treasury Department

Full report here

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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