Have you or a loved one ever been contacted by phone, email or text from someone pretending to be a person you know? Or, someone pretending to be an official from a well-known business, your favorite charity, a lawyer, a celebrity, a romantic interest or a family member with an emergency? Or, maybe someone has called claiming to be from Social Security, the IRS or another government agency, to create a sense of urgency and then has asked you for money to avoid arrest. These are called “Imposter Scams,” and they happen all of the time. Most imposter scams are quick hits, with the goal being to frighten you into making a rash decision, then disappear.
These scams can be extremely lucrative. Reported losses to imposter scams add up to more than $667 million. Fortunately, only 6% of people who report imposters say they lost money. But when they do, it’s a lot: the median individual reported loss is $960. Keeping in mind that this number is a median; many losses have actually been in the thousands for others. According to the Federal Trade Commission, some of the most common government schemes include:
• Phony Social Security Administration call: “Your Social Security Number has been frozen, but we’ll help you keep your money safe!” (This is the most common government imposter scam.)
• Health & Human Services/Medicare Scam: “Call now for your free back brace.”
• IRS Imposter: “There’s a lawsuit against you for unpaid taxes.”
• Fake government grant offer: “You’re eligible for a free government grant.”
• Bogus police, sheriff or FBI call: “There is a warrant for your arrest for failing to appear in court.”
Warning signs of an Imposter Scam:
• A phone call or email claiming you owe money to a business, utility or the government, and risk dire consequences if you don’t pay immediately.
• An imposter calls saying you’ve won a prize or qualify for a grant, but you must pay a fee to collect it.
• A caller claims to be from a tech company or internet service provider that has detected a virus on your computer. They will ask you to look for an email in your computer, and click on a link, which then unfortunately activates malware that shuts your system down. Then, they will offer you a “deal of $300” or more to fix the problem.
• Someone calls or texts claiming to be a grandchild or other relative to request money for an emergency. It’s an emotional plea, but please check it out before you act. Contact others in your family. There’s always someone to help you decide if it’s legit.
What do you do to protect yourself?
• Hang up on unsolicited callers.
• Confirm for yourself whether the caller is legitimate by verifying customer service numbers, email addresses and websites.
• Report imposter scams to the company being impersonated.
• Cut off contact if you suspect someone you’ve met online is an imposter.
• Don’t give out sensitive information—like credit card numbers or your SSN—over the phone unless you are sure of whom you are dealing with. This is especially true if you didn’t initiate the phone call.
• Don’t allow remote access to your computer or make payment to parties who claim to be tech support.
• Be skeptical about caller ID—scammers can use spooling tools to make it appear like they are calling from a genuine business or government number.
Now, imagine if you were job seeking online and connected with someone you thought was a recruiter for a legitimate job. This person might establish a relationship with you, interview you over the phone, and hire you for this sweet part-time gig working from home. All you have to do is provide your bank account information and allow money transfers to your account, then move the money to another party. Plus, a percentage for you! Easy money, right? Not so fast…you may have just been set up by the recruiter to be a “money mule.” A money mule is a person who transfers money acquired illegally in person, through a courier service, or electronically, on behalf of others.
Typically, the mule is paid for services with part of the money transferred. Although the money mule is typically paid, sometime he or she will assist simply because they have a trusting or romantic relationship with the individual asking for help. Money mule schemes are largely internet-enabled crimes. Is it illegal? You bet. You may be aiding criminals by acting as a “money mule” to launder money from crimes like drug or human trafficking and other illegal activities. Your witting or unwitting participation could land you in prison and permanently damage your financial standing.
Types of Money Mule Scams:
1. Romance Scams—The scammer establishes their victim’s trust by claiming to be a U.S. citizen living abroad, and then tries to convince the victim to send money for airfare or that they’re in trouble and need money. The money is often sent because the victim believes he/she is in a romantic relationship. Or, the victim meets the scammer on a dating site and convinces the victim to open an account on their behalf. This account will be used for criminal activities or money laundering.
2. Work at Home Scams—Online job posting websites are used by criminals to find individuals seeking flexible work hours and work from home jobs. They are asked to set up an account and deposit/launder money—what could be easier?
3. Mystery Shopping Job Scams—The employee is hired to assess the performance of money service businesses—i.e. salons, repair shops, banks, accounting firms, and law firms—by completing Electronic Funds Transfers (EFTs) and then evaluating the service using bogus customer satisfaction forms.
4. Social Networking Scams—Facebook and Twitter are sometimes used to recruit individuals to act as money mules by inventing imaginative stories to befriend and persuade individuals to receive and forward stolen funds.
5. Credit Scams—Young people and those who have fallen on hard times are especially vulnerable to credit scams. They may apply for loans over the phone or online with unfamiliar lenders who then get their account numbers to deposit stolen funds to. The account holder believes that they’ve received the loan they applied for, withdraw the funds, and many times send some of the funds back to the “lender” to show good faith in repaying the loan. They are then left holding the bag when the credit is returned.
Warning signs of a Money Mule Scam:
• You receive an unsolicited email or contact over social media promising easy money for not a lot of work.
• The employer uses web-based email, such as Gmail, Yahoo or Hotmail.
• You are asked to open up a bank account in your name or in the name of the new company.
• You are asked to receive funds and then process or transfer funds via wire transfer, ACH, mail or money order.
• You are instructed to keep a portion of the money you transfer.
How to protect yourself:
• Don’t use your bank account to transfer money to anyone. Don’t accept any job offers that ask you to do this.
• Never give your financial details to someone you don’t know and trust, especially if you meet them online.
• Be suspicious of individuals you meet on dating websites if they want to use your bank account for receiving and forwarding money.
• Search online for information about any one that is soliciting you.
How to report suspicious activity:
If you believe you are part of a money mule scam, stop transferring money and immediately notify your financial institution and law enforcement. Fighting fraud is a team effort. Expree provides the most up-to-date information available to protect our members and their accounts.