What Is A Scam? Page 2 Used Car Scams Page 6 Car Insurance Scams Page 8 Fake Holiday Clubs Page 10
CONTENTS
Protect Your Business From Fraud Page 16
Welcome to Watchdog Magazine, a publication dedicated to spreading awareness about scams being perpetrated across the UK. Watchdog Magazine is here to combat fraud by exposing the tricks used by fraudsters and con-artists to dupe their victims. We report on any and all types of fraud so that our readership has every bit of knowledge necessary to avoid being scammed by the unscrupulous thieves that are out there. Armed with a little information, you can spot a fraud a mile off and not only save yourself, but those around you by reporting the fraud to the relevant authorities and stopping the people you know from throwing away their hard earned cash. Watchdog Magazine and its online blogs contain a vast wealth of current information and stories about real-life crime. We also discuss the aftermath from the victim’s point of view, allowing registered users to air their views online about what has happened to them and how they have dealt with and come to terms with a situation. People in similar circumstances now have somewhere to turn to for advice and instructions on how to handle becoming the victim of a fraud.
Online Pharmacies Page 20 Credit Card Scams Page 22
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What Is A Scam?
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bank details to ensure the lump sum payout of how ever many thousand is secured and deposited to your account. And there we have it, the mark’s greed kicks in and the fax is sent. Once the scammer has your “confidence” the real game begins; you receive a reply to your fax or email stating that the money transfer process has begun BUT, you have to then pay insurance fees, claims agent fees and various taxes to ensure the payment is not delayed. The victim will then start making these transfers into accounts held by the scammers but will never receive the prize money at the end and the The perpetrator behind a “con- scammer(s) will walk away with trick” gains the confidence of his these miscellaneous and fictitious or her victim in order to steal their “transfer fees”. goods. The first example of this descriptive being used was in 1849 Put simply, a scam is a way of in New York City. It was coined by tricking an innocent victim out the New York press in the trial of of his or her cash or possessions a fellow by the name of William which is usually only noticed some time after the fact when the scam Thompson. artist has disappeared into the This particular con artist was guilty sunset with the goods. of chatting to random civilians on the streets of New York, building Another classic and notorious a rapport with his victims and example of a scam that taps into eventually asking them if they had human greed is known as the the confidence to lend him their “Ponzi Scheme”. Named after watches. After being given a watch, Charles Ponzi, who became he would walk off with the ill- notorious for this fraudulent gotten timepiece , never to be seen money-making technique in the again. That is, until he was finally 1920’s. Although he did not invent recognised by one of his victims the scheme, he accrued so much money from his version that it was and subsequently captured. the first to become widely known Scams usually exploit typical human and related in the United States character flaws, such as greed, and throughout the world. dishonesty and vanity. Greed is one of the easiest and most frequently A Ponzi scheme is a fraudulent used characteristics manipulated investment scheme, manipulating by a conman. An example would human greed by promising a huge be the recent Spanish Lottery Scam return for the initial investment. operation pays these , wherein you receive notification The by post or email that you were “returns” to its investors using “entered by computer” into the funds hoodwinked from their own Spanish National Lottery Program. monies, or that of subsequent You simply have to fax back your investors. New investors must
A scam, also known as a confidence trick, is a scheme which purposely bends the reality of a situation in order to make somebody part with something of value, willingly.
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be constantly provisioned in order for this scheme to be perpetuated. Eventually, these type of schemes will collapse because a) The stream of new investors slows down or stops, b) The perpetrator disappears with the profits or c) An economic decline results in many of the investors pulling funds out of the scheme. These are but a few classic examples of fraud, famous throughout the world, here in Watchdog Magazine we will be attempting to cover current and recent frauds being conducted within the UK so that our readers have a working knowledge of scams that they could be affected by. These con tricks do make interesting reading, but when you consider the fact that in some cases, an elderly couple’s entire life savings can be swindled so easily and without trace, the serious nature of this type of crime hits home. Protect you and yours by reading on.............
A scam, also known as a confidence trick, is a scheme which purposely bends the reality of a situation in order to make somebody part with something of value, willingly. 4
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Used Car Scams A highly profitable con-trick has been exposed in the motor trade recently and we feel our readers ought to be aware of these fraudsters and the nature of their scam so they can avoid getting hoodwinked.
vehicle . They’ll say something along the lines of; “We have a number of clients who have input their details to our system and are ready to purchase your make and model of vehicle at the full asking price within 48 hours”. They lead you to believe that someone If you’re selling your car in a motor is ready to buy your car straight trade magazine, online or in your away, at the asking price, without local newspaper, you are a target haggling. Sound’s very tempting for these rogue traders. doesn’t it?
disappear with your cash!! Watch out for that one. You could end up paying these smooth operators before you realise you’ve been had.
Conversely, another aspect of motor fraud actually involves swindling cash from a prospective buyer. An advert is placed by the fraudster in your local vehicle sales magazine, usually at a price which is under the normal value for the Basically, as soon as you put your Not when you consider the fact make and model of vehicle being advert up, you may get called by that they will charge you a one off advertised in order to get a quick some reputable sounding firm joining fee over the phone and then ‘bite’ as it were. offering to provide you with several buyers for your vehicle at the asking price you put in the paper. After gaining your trust with their friendly patter, they’ll explain that they are part of a national buying and selling network and have several buyers who are interested in your exact make and model of
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You contact the owner of the vehicle via telephone and then the tele-scam begins. The ‘seller’ explains that they are leaving the country or come up with some other reason they have to sell the vehicle quickly, which is why it is underpriced. Then, you’re hooked. You’re getting a car at a fraction of it’s normal value, and it’s the one you’ve been after for some time. You’d probably do pretty much anything to get hold of the vehicle in question before anybody else.
1) Be wary of cars that are underpriced, there is normally a reason. 2) Never make a deposit payment in advance for a car, no matter how good a deal it is. Do the deal in person, face-to-face and make sure all the documents are there. 3) Never let a potential buyer for your vehicle take a test drive without you, even if they give you their keys as a deposit. (Pretty obvious that one) 4) Never make a deposit payment in advance for a car, no matter how good a deal it is. Do the deal in person, face-to-face and make sure all the documents are there. 5) Never forward money or a sign up fee to people or a company claiming to be able to sell your car for you at the price you want to sell it for. 6) Never accept a personal cheque in payment for your vehicle. 7) Keep hold of your keys at all times and don’t leave them in the ignition.
Including paying a small deposit to secure the vehicle!! Well, if you pay that deposit you can wave goodbye to both the car AND your money. Another simple and faceless crime perfected by conartists across the UK. These type of con–tricks always have a very similar technique; promising the “mark” (victim) something of value (in this example a car at a heavily discounted cost) which entices the victim into parting with a fee in advance of the receipt of his or her goods.
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Car Insurance Scams
Ghost brokers have become more prevalent as insurance costs have rocketed over recent years. These rather unscrupulous traders act as middle-men between the general public and the major insurance firms. They offer insurance for young and inexperienced drivers at low rates. As a rule, if it sounds too good to be true, then it usually is. In this case, they play a rather elaborate game whereby they contact an insurer on your behalf and deliberately misinform the insurance company to get a lower quote. For example, they’ll choose a huge excess fee without informing you in order to get the rate down, alongside lying about things like your age and motoring convictions to achieve the same result. How do I avoid these rogue traders? Flashy adverts offering significant reductions for convicted or young drivers are often a tell-tale sign that a “Ghost-Broker” is at work. They will often offer you a quote based on minimal information because they don’t need it. If you call them up, they won’t go through the usual semi-interrogation that most insurance companies do these days and will sometimes offer anybody a quote knowing only the make and model of a vehicle. They are also known to be deliberately vague about their contact details – providing a mobile number only as a contact point, or not displaying a registered office address or website.
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Unfortunately, as a rule, these rogues can be hard to spot and catch which is why, if you suspect any type of fraud or you are offered extremely low insurance rates you should search for the Motor Insurance Database (askmid.com) online and enter your registration details. If your car is not listed it is highly likely that you are uninsured. You can verify the validity of your broker by searching them on the Motor Insurer’s Bureau (www. mib.org.uk) and also the Financial Services Authority website (www. fsa.gov.uk).
Another good piece of advice is to go through your policy documents with a fine-toothed comb and make sure all details listed are correct, otherwise your insurance may be null and void and you could end up in serious trouble in the event of an accident or claim.
If you have taken all relevant precautions but still suspect fraud, contact the police immediately. `
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One of the most profitable and proliferate scams being conducted at the moment are bogus holiday clubs. The cost to the general public is staggering and conservatively estimated at £1.17bn per annum with a tally of victims at over 400,000 at the time this is published.
Fake Holiday Club Scams
The basic tenet of this particular heist is the promise of a membership to an exclusive club which allows the victim access to a wide range of top class holiday destinations at vastly discounted prices. The mark is lured in to a presentation with offer of a “free holiday” and then the hard sell begins:- consumers are pressurised in to signing up for membership which costs £1000’s, often with no cancellation or cooling off period. The promises made by the hard seller’s often turn out to be pure fantasy and the dates and accommodation available for these supposedly discounted holidays are not available when and where they are wanted. It usually turns out that the “free” holiday used to promote this swindle in the first place is subject to various additional costs such as flights and booking arrangement fees. Although some holiday clubs are indeed legitimate, there are ways to spot those that aren’t. Pushy sales reps, the absence of a cancellation period, wildly exaggerated promises of fantastic holidays that seem too good to be true. If you find yourself at the end of a hard sell there are a few important things you should check or ask for:
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1) Is there a cooling off period of 14 days? 2) If there is a cooling off period, the company offering the product should not accept any money from the client during this period? 3) Written information detailing all the information about the contract? 4) Information in the contract regarding cancellation and details on how to make a cancellation?
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Protect Your Business From Fraud
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Business fraud can be very complicated and a business can be attacked from a number of different angles. Some of the most dangerous attacks on a business can come from within, from employees or even directors/ owners. The bigger a business is, the easier it is for fraud to occur. There are two types of business fraud, internal fraud (whereby an employee or partner with access to company accounts will skim or misappropriate funds from a company) and external fraud wherein an outside party is involved in the redirection of company monies. For example, purchasing goods for a company can be a task which is shared between several different employees or departments within the organisation. A typical case would be one in which a vendor selling to the company deals with a “saboteur” within the company who is responsible for purchasing certain items. They will sell goods to the company at an extortionate rate with help from their accomplice(s) within. The person responsible for procuring the items for the company will then get a backhander off the seller in order to keep quiet about what is going on and cover any tracks which may potentially lead to the guilty parties being caught out and prosecuted. Another example of external fraud occurs when rogue “traders” send spurious unsolicited invoices to seemingly randomly selected companies. If your company does not have what is known as an “invoice processing solution” in which each inbound invoice goes through a simple checking system to verify its authenticity, you could end paying fraudsters for services `
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or goods which are non-existent. Again, the bigger the company, the easier it is for a small payment to slip through the net unnoticed. This type of external business fraud can involve accomplices on the inside too, so it is extremely important to ensure you observe all due diligence when hiring your staff, as well as maintain checks periodically throughout the course of their employ. As a rule, the more responsibility an employee has, the more effort you should make in checking them out. You can also separate important tasks such as purchasing and the payment of invoices into different stages which are dealt with by different employees thereby reducing the chance that fraud can take place. If one person verifies the invoice is legitimate, then passes it to someone in a different department for a “second opinion” and then finally the invoice is passed to a randomly selected person from a group of people with authority to make payment you are filtering out the likelihood that a fraudulent invoice will end up getting paid. A great deal of businesses still use the good, old-fashioned, handwritten cheque as a method of payment and cheque fraud is still happening to this day. Fraudsters can imitate cheques with a high degree of accuracy with the technology at their disposal and frequently draw on funds held in company accounts using counterfeit paperwork. Cheque books and bank account details should be kept under lock and key to reduce the risk of this type of fraud.
The cheque can then be altered and made payable to a fraudster’s bank account. You may even be sent a fraudulent cheque in payment for your goods, thereby unwittingly becoming a party to fraud and receiving a payment from someone who is being ripped off.
The simple answer is to “check your cheques”, inbound and outbound to ensure nothing is awry. make sure your inbound cheques are coming from the customer listed on your invoice and make sure your In some cases, cheques can be outbound cheques are crossed and intercepted by a third party en- therefore payable to the intended route to the intended recipient. recipient only.
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Bogus Online Pharmacies
There’s a modern slant on the age old “quack” doctors selling their panacean potions and remedies for all. In this instance, fraudulent and often completely useless medical goods are being promoted and sold via the internet. As per many of the scams we come across, the adage “if it sounds too good to be true, it usually is” applies here. Criminals are now selling their cure-all pills and medicines using online advertisements. Whilst you are browsing online, you may get a small banner pop up offering you
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a miracle cure for baldness, acne, erectile dysfunction or a myriad of other common medical complaints – even potentially fatal conditions such as cancer or HIV. These fraudsters prey on people who are genuinely suffering and are hoping against all hope for that light at the end of the tunnel. It is a particularly sickening (not intentionally a pun) crime. In some cases a genuine medical product can be purchased online without prescription. Unfortunately, there’s no surety
that the medicine you purchase is indeed genuine or, for that matter, in its purest form. You could end up putting your health in jeopardy by ingesting potentially harmful compounds that are sent to you via the postal service. These organisations are not regulated like your average high street pharmacy. In addition to offering goods which may be no more than a placebo, it is important to remember that if these scammers are willing to sell you potentially harmful medicine, it is very likely they are going to
treat your payment details or credit card number in a similarly amoral manner. If you’ve been conned in this manner, make sure you advise your bank as soon as possible and order a replacement bank card as soon as possible. Your best advice in this instance is to contact your GP and ask advice about anything you intend to procure online. The Royal Pharmaceutical Society (www. rpharms.com) has produced a logo which genuine suppliers selling bona fide medical products can display on their websites.
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Credit Card Fraud Technology abounds in the banking industry but even the latest chip and pin machines can be manipulated by fraudsters to aid them in stealing your all important card details or even making an exact copy of your card to be used in shops or at other ATM machines. Worrying isn’t it? The bank set aside millions every year in anticipation of the losses they know they will suffer due to card fraud. Skimming cards is probably one of the most advanced methods criminals have at their disposal for siphoning money out of your account sometimes without detection. There are a few different ways of doing this but one of the most audacious and tech-savvy is the addition of card reading devices to ATM facilities on the high street. These add-ons to card machines are manufactured by criminals familiar with the ergonomics of particular ATM’s. They design sleek covers to be placed over the existing card slot which effectively mean your card is read twice when inserted:- once by the counterfeit device which mimics the existing card aperture, and once by the
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bank’s own reading device.
Plastic card fraud involves the compromise of any personal information from credit, debit or store cards. The personal information stolen from a card, or the theft of a card itself, can be used to commit fraud. Fraudsters might use the information to purchase goods in your name or obtain unauthorised funds from an account. Plastic card fraud can also include ‘card not present’ fraud, such as the use of a card online, over the phone or by mail order, and counterfeit card fraud.
The data read by the counterfeit recess for your card can be stored locally, or in some of the best devices actually be transmitted These skimming devices can be extremely hard to spot and often the only way skimmers can be found out is when they are fitting or removing a device at the ATM site. If you notice anybody behaving suspiciously at your local card machine, call the police immediately. Similarly, if you notice something that looks out of place or loose on the ATM you are about to use, again, call the police immediately so they can inspect the ATM and possibly catch the fraudster who fitted the device. Most importantly, don’t use the machine!! Card skimming can also occur in high street outlets such as restaurants or clothes shops which use the portable or static countertop card payment facilities. In these instances, a skimming device will be kept nearby but out of sight and when you hand over your card, a criminal employee may swipe your card through their hidden skimmer whilst you are distracted and then take a note of your PIN number when you type it in.
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Both methods of skimming described here require some method of recording your pin number. Skimming devices fitted to ATM machines often have a camera to record your hand movements when typing your digits and when you pay for something in a shop and the sales assistant manages to skim your card, they must take a mental not of your digits or rely on CCTV to retrieve the details. This is why people who shield the keypad when typing their PIN numbers are much less likely to fall victim to this type of fraud. Unfortunately, some of the skimming devices are so advanced, they even have a secondary set of digits for typing your PIN which slide undetectably over the existing input digit area. In this instance, even if you shield your PIN, those all important numbers will still be electronically detected and recorded.
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