The FTC Doesn’t Send COVID Relief Checks

Let’s start with a few facts.

First, whether you’re getting a paper check or a direct electronic deposit, any COVID Relief funds from the federal government are being handled by the IRS and the U.S. Treasury. Not the Federal Trade Commission (FTC).

Second, regardless of the alleged reason, the FTC is not going to send you an email message out of the blue. Specifically, the agency’s Acting Chair Rebecca Slaughter is not going to send you an email message, regarding COVID Relief checks or any other subject, requesting personal banking information.

However, there is a recent crop of email scams that ignore these facts and attempt to harvest personal information and account details from potential victims. The messages spoof Rebecca Slaughter’s email address at the FTC, and while I have not seen the full text of one, I would bet on some variation of “we need you to verify your information to get your relief payment.”

Federal agencies generally do not initiate contact with citizens by email, nor do they ask for personal identifying information. Since there really is no such thing as an “official” email address for each person, it would be impossible for them to know which one to use at any given time—personal email addresses can be terminated or abandoned and new ones created instantly, work emails can end suddenly if the owner’s employment status changes. If the IRS or Social Security Administration (for example) really need to contact you, they will primarily use postal mail.

That said, you can sign up for Consumer Alerts from the FTC that will help keep you informed of different types of scams. You can sign up for those here, and you will get emails from the FTC in this case. However, notice that YOU are the one initiating the contact, not the FTC, and they won’t be asking you for account or other personal information.

It’s IRS Impersonation Scam Season

This is the time of year when a lot of people have recently filed their taxes, are in the process of filing their taxes, or are planning to do so soon. Which also means peak IRS Impersonation Scam season is upon us.

Here are some ways to stay safe.

First, remember that the IRS is not going to call or email you about past due taxes. If yours really are overdue, you will be notified by postal mail.

The IRS does not demand immediate payment, then threaten taxpayers with immediate arrest. In other words, the IRS doesn’t contact you out of the blue to say “pay now or the local police will be at your door in one hour.” While actual tax fraud is a crime and will land you in jail, that process has a lot of steps and takes quite some time. It’s not a matter of a single afternoon. Also, if the IRS says you owe back taxes, you’re allowed to appeal or question the amount; it’s not “because we said so, no questions, pay now or go to jail.”

The IRS does not accept payment by wire transfer, nor does it accept CashApp, Venmo, PayPal, Bitcoin or gift card. All of these methods are used by scammers because they’re not very traceable, and very irreversible.

The IRS won’t threaten to “suspend” or “cancel” your Social Security Number. This threat makes zero sense, but scammers sometimes use it to frighten potential victims into paying.

While these tips are specific to the IRS and the tax system in general, they really serve as a reminder to never take any strange caller or unexpected email at face value. Anyone attempting to make you afraid, then asking for money or personal information, should be met with extreme suspicion.

Never Cash Checks for Strangers

Fear is probably the most common emotional tool scammers use to lure victims, with greed a close second. But there are scams that use a different human trait entirely: the desire to help others.

In this type of bad check scheme, a stranger approaches a potential victim as they are either heading into a bank/credit union, or walking up to an ATM. The stranger will ask the mark for help, giving an emotional, convoluted story for why they need cash right away, but can’t get it from their own financial institution.

The con artist will then ask the victim to cash a check and hand over the funds, either by taking it to a teller or making a deposit into the ATM and withdrawing the funds.

What happens next is not difficult to predict. The check will turn out to be fraudulent and the victim has lost every dollar they gave to the scammer. The financial institution will never reimburse the loss because the victim is the one who deposited the bad check.

As an additional bonus, the victim may have their account terminated, since most deposit accounts come with an agreement that the consumer will not use the account to transact business for anyone who is not an owner of the account, and using it as a check-cashing service could be considered a violation of such terms.

Never trust anyone approaching you as you enter a bank or at an ATM. Decline as politely as possible, lie if you have to, and don’t let on that you’re wise to the scheme. Just get away, get as good a description as you can without being obvious, and contact law enforcement. This isn’t the kind of scam that the perpetrators try on a single person and then give up. They will be waiting for another victim.

How to Avoid Drop Shipping Scams

Drop shipping is a business model in which a seller takes orders from a customer, then has the purchase shipped directly to the buyer from a manufacturer or wholesaler, without actually handling the item at any point. It is a lower-risk way to sell online without having to spend a lot of money upfront on inventory (or storage space for said inventory), and it’s an attractive option for people just getting started as entrepreneurs.

In fact, many major, legitimate companies use this method to sell products. If you’ve ever ordered a new mobile phone and it was sent to you from China, that’s drop shipping. A lot of small online sellers also use this business model, selling only products they have tested and believe in, from suppliers they trust.

Drop shipping itself is not a scam. However, a lot of scammers use drop shipping because it can be an easy way to make a quick buck selling counterfeits and junk.

Advertisements and promoted posts on social networks seem to be the channel of choice for drop ship scammers. While those junky “Ray-Ban Sunglasses for $10!?!?!?” ads are easy to spot and ignore, a lot of drop shipping scammers create ads that appear quite professional. Clothing and fashion are the biggest category, along with cosmetics, food, electronics, and gadgets. You might see some fabulous-looking clothing item, from a known designer, advertised for $30 instead of the usual $300. Or a sophisticated-looking wristwatch, again by a known maker, for FREE (you only pay for the shipping).

These ads might even take you to a professional-looking e-commerce website. Every link works, the text on the website uses proper spelling and grammar throughout, and it’s even a secure site, with the “https” and the little padlock icon and everything. “Why not?” you think, pulling out your credit card.

Then you wait. Finally, what arrives at your doorstep, many months later, is definitely NOT the item you ordered. That designer article of clothing has somehow become a horrific, poorly-made, ill-fitting knockoff that isn’t worth $3, let alone the $30 (plus shipping) you paid for it. And that watch? You could have won a better timepiece from a twenty-five-cent claw game at a truck stop in 1986 than the piece of plastic junk you just overpaid to have shipped from the other side of the world.

And that is the drop shipping scam. These sellers have no intention of shipping a quality product to you. They create good-looking ads (or reuse ads other drop shipping scammers created), set up a website using one of the many turnkey e-commerce platforms available to literally anyone, take your money, and have some fishy wholesaler ship you whatever trash they’ve got lying around.

The tip here is the same one that has been repeated a million times: if something looks too good to be true, it almost definitely is. Especially on the internet.

Avoid Car Advertising Wrap Scams

What a deal! You received an email promising a nice payout—hundreds of dollars per week, or even per day—simply to drive your own car around like you normally do, with some beverage company logos applied to the doors, and maybe the hood.

Not so fast. This “offer” has never turned out to be anything other than a counterfeit check scam.

Here’s how it works if you respond: you will be mailed a cashier’s check for thousands of dollars, allegedly to cover the cost of applying the decals to your vehicle, plus your first payment. You are supposed to cash the check, keep a couple hundred, then wire the rest to someone else, supposedly the company that applies the graphics.

So you cash the check and wire the money to someone, then a few days later find out that the check was counterfeit. Not only do you not get to keep your “payment,” if you cashed a check for more than the balance in your account, you now owe your bank the difference. They won’t cover the loss, since you’re the one who brought in the fake check.

While you do occasionally see vehicles covered in energy drink logos, think about what those vehicles look like: generally, heavily customized and lifted pickups, with the color scheme of the logo carried through to the wheels, suspension, and frame. These companies are selling an image and an attitude. They’re not going to select random people, driving who-knows-what, to represent that image.

Plus, the payments are always wildly out of proportion with the potential profits. I have seen these scams promise anywhere from $150 per day all the way up to $600. How many cans of Psycho Lizard Energy Bomb With Ginseng!!! do you think they would have to sell just to break even on one wrapped car at that rate?

But you don’t have to worry about that, because the decal application part never happens. Once you wire the money, you have completed the transaction. The money is gone and the scammer is happy.

There is a general scam prevention principle to remember here, too: “Cash this check, then wire the money to someone” is, was, and always will be a sure sign of fraud. There has never been one case in which those instructions led to something legitimate happening.

(Yes. there ARE legitimate companies that pay people to place ads on their cars. You can expect to earn about $300 per month AT BEST. $10 per day. Not $600. You likely also have to be driving full-time for a rideshare or food-delivery company in a densely populated city to be paid that much.)

Never Call a Phone Number to Fix a Computer Virus

If you use a desktop or laptop computer, you absolutely need to have antivirus software installed. There are a lot of options, and most of the major ones—Norton, McAfee, Bitdefender, Trend Micro—do a good job if you keep them updated and active. In just about every case, that means paying an annual fee, which usually falls between $20 and $40 per year for a personal computer. Compared to the time and expense of fixing a compromised machine, however, it’s a pretty good deal.

However, it is also important to know how antivirus software actually behaves once installed. You’ve heard of Tech Support phone scams in which a caller claiming to represent Microsoft tries to convince the victim to follow instructions that lead to fraudulent credit card charges, a hacked computer, or both, but there are also websites that will display popup windows in an attempt to accomplish the same objective.

When you have real, paid-for antivirus software installed, for the most part it runs quietly in the background. It may give you a message when you start your computer or a weekly report of the threats it detected and removed (if any), but other than that, you will generally only hear from it if you try to download or install an infected file, or if your subscription is about to run out.

What will NOT happen is a popup window telling you “your PC is infected!” or “your PC is ____% damaged” or “WARNING! YOUR COMPUTER MAY BE INFECTED” with instructions to enter a credit card number or call a phone number, or to click a “Repair Now” or “Free Virus Scan” button. Those are all coming from a compromised website you’re visiting.

If you are already paying for antivirus software, that’s where the payments stop. You do not pay extra to have viruses removed—detecting and removing malware is what you’re paying for in the first place. You also will never speak to a live person on the phone. If your antivirus software detects a problem, it will deal with that problem. There is no need for some remote “tech support” person to access your computer.

If you get one of these popups, all you have to do is close your browser window, don’t click anything on the popup window itself, and consider avoiding whatever website you were visiting that generated the popup in the first place.

Money Flipping Scams and Mobile Payment Apps

Mobile payment apps such as Venmo, Cash App and Zelle are extremely popular, but have become an easy avenue for scammers looking to make a quick profit.

Many of these scams start on Instagram, with photos appearing to indicate a glamorous lifestyle and claims of a “secret” stock market strategy that can turn an investment of a few hundred dollars into thousands, almost instantly.

Once a victim contacts this scammer, they will be instructed to send money—around $500 is a common amount—using one a mobile payment app. Sometimes the scammer will respond with an attempt to get another payment, to cover “taxes” or “fees,” but in every case, the victim never gets one cent back from their “investment.”

There are a few things to remember. First, you should never invest with any unlicensed, unknown person or company. Investment always carries the risk of losing money, so anyone selling “guaranteed” results (or “secrets,” “miracles” or “tricks”) is lying.

Second, mobile payment apps are meant for transferring money when you know the person you’re paying. It’s the same as wiring money in this way: send it to a stranger and it’s gone forever, with no way to get it back.

Finally, it is incredibly easy to create an Instagram presence filled with young, glamorous-looking people standing in front of expensive cars or large houses. These photos can be purchased from stock photography websites and altered to suit their needs, or sometimes the scammer will simply trespass on private property to get pictures of himself in these scenarios. Never trust anyone you don’t know online, and never send money to a stranger in any situation.

You Can’t Buy a Miracle

A new year is fast approaching, and let’s face it—we’re all hoping for a drastic reduction in weirdness for 2021 compared to…whatever that was.

One thing that remains familiar, though, is people making plans for the things they want to accomplish in the new year. It’s a timeless urge, and while plenty of big plans for 2020 were scuppered by the pandemic, that really won’t stop us resolution-making types from doing it again, however cautiously (once bitten, amiright?).

Therefore, I want to remind you that you can’t buy a miracle.

What I mean by that is, the word “miracle” has been turning up in advertising for centuries now, and it has always been a major red flag that the product or process being advertised is nothing but snake oil. Literal snake oil at one point, but figurative snake oil these days.

You want to lose weight this year? Pandemic led to panpizza a few too many times? The minute you see the word “miracle” in a weight loss product, diet plan or exercise device, run the other way immediately (and be sure to slap on your wearable fitness tracker while you’re running; might as well get credit for those steps). There is no such thing as a miracle weight loss product that you can give another person money for. There might be miracles that happen with your own motivation or discipline or mindset, but those are all free, and they all happen inside you.

You want to better your financial situation in the new year? Real investments are sold by people with licenses, are never guaranteed, and always carry risk. They work (or fail) though often-unpredictable but identifiable market forces, and are not miraculous. Anybody urging you to invest in some new miracle investment instrument is lying to you, even if they claim to be a member of some group you belong to (a scheme known as affinity fraud). Don’t lose your life savings to an unlicensed charlatan selling miracle investments. Go to a licensed broker and discuss your best options.

Even with the good news about vaccines, it’s going to be a while before the pandemic is fully in the rearview, so anxiety about this potentially-deadly virus is going to be around for a while. This means that there are going to be websites, emails, social media ads and even text messages hawking COVID-19 “miracle cures” for a long time. None of them will be legitimate, the same as every “miracle cure” for every other disease known to man throughout history. These are and will always be scams, plain and simple. Save your money.

Do Not Fall for the One Ring Scam

For the record, I am trying very hard to not put any Lord of the Rings references in this article, but I can tell you the temptation is unbelievable, given the name of this scam.

Here’s how it works: your phone rings one time. Curious, you use caller ID to call them back. A charge for an international call and/or an extra charge for some kind of “service” gets added to your phone bill. Most of that money ends up going to the scammer.

That’s pretty much the whole scheme.

In the wave of one-ring fraudulent calls that hit in 2019, the calls came from the “222” country (not area) code, which is the West African nation Mauritania. Since most people don’t memorize things like country or area codes, on first glance the number might just look like a regular domestic phone call. The FCC has detailed information available for download here.

I have written several times about not going through your caller ID list and calling every number back. In the case of the “spoofed local number” robocalls, it was because the caller ID was NOT showing the actual number from which you were being contacted. Calling back would only end up with you harassing an innocent person.

But in this case, the caller ID is not being spoofed, or at least, it is displaying a number the scammers want you to reach because that’s all it takes to skim some money from you. Some scams go for big hauls from a small pool of victims; this one is aiming for small gains from many.

A one ring scam to rule them all, if you will.

(I almost made it.)

Telephone Scam Targets NIPSCO Customers

True to the company name, the Northern Indiana Public Service Company, commonly known as NIPSCO, provides electric and gas service to a sizeable chunk of northern Indiana, and for much of the Northwest Indiana region, is pretty much the only game in town when it comes to these utilities.

This means there are plenty of scams in which someone pretends to represent the company. Most of the time, you hear about distraction schemes in which someone knocks on the door, claims to be a NIPSCO employee, and asks to be let into the home or to show the resident something outside. While the homeowner is distracted, an accomplice enters the house and steals anything valuable they can get their hands on.

But another type of scam has been making the rounds in the form of phone calls or text messages claiming that the recipient is late making a payment, and that their power is going to be turned off immediately unless they pay right away, usually by purchasing a prepaid debit card and relaying the card data back to the alleged NIPSCO employee. At a time when a lot of people’s financial situations are still reeling from the ongoing coronavirus pandemic, it’s sort of the perfect scam for the season. Dial or text any 219 area code phone number, and you’re likely to get a NIPSCO customer, and more likely than usual to find someone who is a little behind on payments.

There are a few points to remember. First, if you are behind on utility payments, it will be reflected on your most recent bill. Contact the company directly and talk to someone—believe it or not, most utility companies would generally rather work with you on a plan than cut off your power. Also, whether you are behind or not, NIPSCO won’t ask you to meet an individual somewhere to pay cash, ask you to buy prepaid debit cards, or request a wire transfer. This is one reason I always encourage people to sign up for (and use) online payment options. That way, if you get a call or a text message about an unpaid bill or other issue, you can login and check for yourself. It also allows you to make a payment with a checking or savings account, credit or debit card. However, even if you still prefer offline billing and payments, never trust a caller (or texter) who is trying to alarm you, then asks for money. Hang up, do not respond, and call the utility directly to see if there is any truth to their claim. Chances are, there is not.