Top Stories
Houston: Man from India pleads guilty to fraud in work with call center in India; they called victims claiming to be federal agents; he cashed out gift cards and picked up packages of cash at mail drops; took in millionsAustralia reports that the majority of fraud complaints involve money mules
UK: Scotland Yard takes down iSpoof, company that faked caller ID’s to help scammers pretending to be banks; owner gets more than 13 years prison BBC story here
DOJ announces fifth major effort against money mules; took more than 4000 actions, including warning letters and prosecutions
Spoutible - breathe
According to the FTC, “consumers reported losing nearly $8.8 billion to fraud in 2022.” The key word is “reported,” as the amount of stolen money comes from reports to the FTC’s Consumer Sentinel Network. However, given that it is based on self-reports, it vastly underestimates the damages.
In research I conducted with my colleagues, we asked known fraud victims if they had been the victim of a scam. Less than half (43%) reported the fraud – a typical result as Deevy and colleagues found in their review. This makes sense as victims may not yet recognize that they have been defrauded, have forgotten the incident, or the victim is reluctant to discuss it.
The use of complaints further contributes to underestimating harm from fraud. Research finds that relatively few consumers file complaints with the government, and, when they do, they tend to complain about the product and not about deceptive practices.
The FTC figure is based on financial losses to the victim and overlooks several important but real secondary effects, including (but not limited to): psychological harm to victims and their family and friends, hours wasted using 2FA, repairing credit and identity, or trying to determine if something is a scam, unfunded needs of charities, taxpayer dollars spent on fraud prevention and damage mitigation, opportunity costs to entrepreneurs as funding goes to fraudulent entities, lost economic growth as resources are wasted, threats to national security as fraud crimes fund adversaries, cost to businesses for training and prevention, and the deterioration of trust needed, not only for commerce, but for everyday social life.
The FTC Sentinel provides important information, just so we realize that the $8.8 billion is the tip of the iceberg of harms and damages caused by fraud criminals. The reality is that the iceberg is huge.
All myths collected here
New links!
Fraud Studies: Here are links to the studies I’ve written for the Better Business Bureau: puppy fraud, romance fraud; BEC fraud, sweepstakes/lottery fraud, tech support fraud, romance fraud money mules, crooked movers, government imposters, online vehicle sale scams, rental fraud, gift cards, free trial offer frauds, job scams, online shopping fraud, fake check fraudand crypto scams
Fraud News Around the world
- Memphis: Man indicted for selling counterfeit airbags from China on eBay; 2000 airbags seized
- Canada’s Competition Bureau sues movie theater chain for not disclosing charges in online purchases
- Scammers created fake version of US Postal Service employee website; captured login info, and redirected paychecks to themselves
- Canadian Anti-Fraud Centre warns scammers are now sending text messages to loved ones claiming to have broken their phone and asking to be contacted at a different number and requesting money
- York police arrest man for grandparent fraud
- RCMP arrest New Brunswick man for grandparent scam
- The Lemon Group has sold millions of Android phones around the world that have malware already installed to steal passwords or sent text messages
- Fraud is 40% of all crime in England and Wales; why it is challenging for the police
- UK’s Which? lists four most common and believable frauds there
- UK victims lost £15 million to scams offering vacation rental homes in 2022; double the year before
- McAfee finds the majority of adults in India have been defrauded when booking travel online
- Los Angeles: Customs seizes 4000 counterfeit refrigerator water filters
- Florida man charged with DWI for going 171 mph on a motorcycle
- Guardian of teens arrested for auto theft arrested when he goes to police station to get them driving a stolen car
- Analysis of proposed FTC rules on negative option marketing and artificial intelligence
- FTC/Utah AG win case against real estate investment training company; operation took in $15 million; also wins orders against two celebrity endorsers
- FTC sending $557,000 to victims of credit card interest rate reduction scam
- Connecticut: Man (Nigerian?) pleads guilty to fraud in unemployment benefits; got $793,000
- Puerto Rico: 44 indicted for PPP fraud; got over $1 million
- Atlanta: One man arrested for PPP fraud; another charged with ID theft to steal unemployment benefits
- Pennsylvania: Man charged with PPP fraud; got $1.5 million
- Baton Rouge: Woman pleads guilty to PPP/EIDL fraud; got $1 million
- Sacramento: New Jersey man gets nearly 7 years prison for ID theft to steal unemployment benefits; also EIDL fraud; got $3.4 million
- Miami: Church pastor gets four years prison for PPP fraud; got $800,000
- North Carolina: Jury convicts Nigerian man of laundering money for BEC scams; local University was a victim; gets 33 months prison
- Microsoft detects 156,000 BEC emails every day
- Boston: US sues Binance to recover funds stolen in BEC fraud
- Attack on food distribution giant Sysco may have resulted in loss of 125,000 social security numbers
- Ransomware?: Attack on Philadelphia newspaper prevents getting out print edition
- Hits German auto and arms maker Rheinmetall
- DOJ indicts Nevada man for CoinDeal crypto investment fraud; 10,000 victims; $45 million lost
- Bitcoin of America closes all Connecticut bitcoin ATM’s after state action for no license and after money for fraud sent from its machines
- San Mateo, California: Man (Romanian?) gets 90 days in county jail for ATM skimming
- New York: 18 people arrested and charged, apparently Romanians, as part of international ATM skimming gang that operated in at least 17 states
- Pittsburgh: Romanian man arrested for ATM skimming with fake Italian passport
- Cleveland: Jamaican man gets 18 months prison for lottery scam
- Jamaica arrests three for lottery scams
- Jamaican man arrested for lottery fraud tried to bribe officer
- Hong Kong: Police arrest fifteen family members running romance scams from a home; took HK $20 million from victims
- Nigeria arrests romance scammer after working with police in Australia
- Minnesota: Woman pleads guilty to acting as a money mule for romance fraud, unemployment benefits, and PPP fraud; kept part and sent the rest out of the country
- India arrests Nigerian man for romance fraud