Fraud and Today's Top Scams part 1

Traynham:Year after year, Internet scammers reap billions of dollars from unsuspecting victims. And, in 2016, the median loss doubled to $600 per cyber crime. Hello, everyone, and welcome to "Comcast Newsmakers." I'm Robert Traynham. And joining me is John Breyault of the National Consumers League. John, welcome to the program, and thank you for joining us.

Breyault:Thanks for having me on.

Traynham: John, can you walk us through some of the top scams out there right now?

Breyault: Sure. So, the top three scams that we hear about from consumers are, number one, what we call "Internet merchandise scams." These are scams where a consumer thinks they're buying one thing online and that either never shows up or what shows up is completely different from what they thought they ordered. Number two, we're warning consumers about what we call "fake-check scams." In a fake-check scam, the consumer could be receiving a check in the mail for anything like a payment for a nanny job or as payment for selling a car, for example, and they're instructed by the scammer to put that check in their personal account and wire a portion of the proceeds either back to the scammer or someone else. The check is fake, and, when the bank finds out, the consumer is out the money. The third one we want to warn consumers about are what are called "advance-fee fraud." This is a scam where a consumer can be doing something like trying to get a loan to pay down credit-card debt, for example, and they see what looks like a good offer online, but they're told that, in order to receive that loan, they have to pay a big up-front fee. The loan never materializes, the consumer is told to continue paying, and, ultimately, they are out hundreds if not thousands of dollars.

Traynham: John, the frustrating thing for me -- and I think for many people that are watching at home or perhaps on their smart devices -- with technology emerging so quickly, these scams are becoming much more sophisticated. For example, you get an e-mail. It has a tracking number. Perhaps it looks like it's coming from a legitimate address. How can one educate themselves or inform themselves about these scams when they appear to be so authentic?

Breyault: Sure. Well, the scammers are getting much better at their jobs. They know who you are. They know how to target you. They may know, for example, who your bank is or what state or county you live in.

Traynham: Can we pass there? How do they know that? Is it because we're being a little careless with our passwords? In other words, are we doing something to allow ourselves to be so vulnerable?

Breyault: Well, that's certainly part of it, but I think, also, another part is that, because we're sharing so much information on the Internet with companies that we do business with, that data can leak to scammers who can then build very detailed lists. It's like any other telemarketer or mail-order company that knows a lot about their customers. Scammers do, too. They're out to defraud you, whereas a legitimate company just wants you to buy their stuff.

Traynham:So they're profiling you. They understand your behaviors.

Breyault: Exactly. They're profiling you, and they can make a very convincing pitch. What that doesn't change and I think where consumers have an advantage is in learning to spot the red flags of scams. And so, for example, on the fake-check scams I talked about, the big red flag is they're asking you to deposit a check and wire money back to somebody else. That's the big red flag. It could sound totally convincing, but if that's what you're asking them to do, that's a huge red flag. On something like a sweepstakes scam, where someone's told that they've won a million dollars in a lottery somewhere, if you're told to pay up front in order to collect those winnings, that's a big red flag. It could sound totally convincing, but that's the catch.

Traynham: Is there a particular person and/or profile that these scammers go after? Is it an older person, perhaps maybe someone that is down on their luck?

Breyault: Sure.

Traynham: And so perhaps, if they win a million dollars, they feel like they've hit the jackpot literally and figuratively?

Breyault: Sure. Well, there's no one profile for fraud victims. That's actually a myth we're trying to dispel. Certainly, there are some types of people who may get vulnerable to certain types of scams, so, for example, imposture scams. This is where someone calls you or e-mails you and says they're somebody you know, like a grandchild, for example, and they're stuck somewhere and they need you to send them money. This was known originally as the "grandparent scam" because we saw a lot of older consumers getting those calls and being targeted. And, certainly, while they're vulnerable, anyone can fall victim to any kind of fraud. So I think it's important, whether you're old, young, whether you live in a rural area or an urban area, rich or poor, that you learn to spot the warning signs of these scams and avoid them.