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.

How to Avoid Delivery Confirmation Scams

The coronavirus pandemic brought out a lot of things in people, both admirable and not-quite-as-such, but it really brought out the online shopper in a lot of us. More packages than ever are being left on more doorsteps than ever (which was already happening anyway, the virus just accelerated things), and that means a lot of delivery confirmations and notifications arriving in email inboxes and text messages. Usually, these contain a link to the seller or carrier’s website, where you can track the status of a delivery.

Never ones to leave a potentially-lucrative situation unexploited, scammers are leveraging this deluge of notices to launch phishing attacks disguised as alerts regarding the shipment or delivery of online purchases. The messages contain a link that leads to a website created solely to harvest personal information, install malicious software onto your computer or device, or both.

Some phishing messages attempt to impersonate the seller (Amazon or Walmart, for example), while others appear to come from the company shipping the item (USPS, UPS, FedEx, etc.). Some target college students who found themselves sent home abruptly in March, and refer to deliveries that have supposedly been waiting for them to pick up for six or seven months.

The first step you can take in avoid this type of phishing is to be as organized as possible, and make sure you know what you have ordered, whom you ordered from, and when. If you’re only waiting on one package from Amazon, and one other being shipped via USPS, you will be instantly suspicious of a notification from Walmart or UPS.

You can also decline to click or tap links in emails or text messages. If you want to check on a shipment, use the information originally provided by the seller and visit the correct website directly (which will be simple if you’re already doing that “be organized” thing I just mentioned). As always, notifications and confirmations from real companies, while brief, will almost always have correct spelling (and grammar when/if present). Misspelled words, dropped plurals, incorrect verb tense—these are all signs that something is a little “off” about a shipping confirmation.

Prevent Scams by Imagining an In-Person Approach

Imagine yourself walking down the sidewalk. A stranger approaches you. He is wearing business attire and a nametag from a large, multinational bank or credit card provider. He says this: “Excuse me, Customer? Your card has been deactivated due to suspicious activity. Would you please tell me your name, account number, Social Security information, online banking password, and PIN?”

Would you give this person anything he asked for?

Of course you would not. However, this scenario is exactly what happens in the classic phishing scheme: a message informs you that your card has been deactivated, and gives you a link to a website designed to harvest personal financial information and hand it over to someone you don’t know. The message and the website may be dressed up in logos and slogans that mimic some large financial provider, but that does not make them real. The only real difference is that the communication is happening through email instead of in-person.

If you picture unexpected emails, text messages or phone calls from people you don’t know (and whose identity you therefore cannot verify) as in-person approaches, the suspicious intent becomes incredibly clear.

Would you listen to a person running up to you on the street and saying that because you did not pay your taxes (or failed to report for jury duty) you are going to be arrested in one hour unless you buy a prepaid debit card and tell them the numbers?

If someone tapped you on the shoulder and said, “Greetings. You have won the Microsoft Email Lottery. Two-point-five million United States Dollars. But you have to give me five thousand to cover taxes and fees first,” would you run straight for your bank to withdraw the cash? How would you react to a stranger telling you they wanted to immediately hire you for a work-at-home job processing payments, and all you have to do is open an account at a certain bank and tell them the account and routing numbers? Would it strike you as a legitimate offer?

How to Freeze Your Credit

New account fraud, in which someone uses your personal information without permission to open new credit accounts in your name, is probably one of the first things that springs to mind when you hear the words “identity theft.” It is still one of the more common ways thieves use stolen information. A security freeze is your most effective tool in preventing this type of identity crime.

A freeze prevents new credit accounts from being opened using your personal information unless you lift the freeze in advance of applying for new credit. This is accomplished using a PIN that is created when you place the freeze. A freeze can stop an identity thief from creating new lines of credit, even if they have all your information.

There are three major credit bureaus, and each has a specific method for applying and lifting a security freeze. While you can still request a security freeze by postal mail, going online is by far the easiest and quickest method. Make sure to visit all three bureaus to place your freeze, and simply follow the instructions to place your freeze and get a PIN.

TransUnion: https://www.transunion.com/credit-freeze

Experian: https://www.experian.com/freeze/center.html

Equifax: https://www.equifax.com/personal/credit-report-services/credit-freeze/

Make sure to bookmark each website so you can lift the freeze later if the need for a new account arises, and keep your login/password information safe if a site requires you to create an account. One trick is that if you are applying for new credit, if you know which credit bureau the lender uses, you can lift the freeze temporarily for only that particular credit bureau, instead of all three.

Finally, make sure you keep your PIN somewhere safe, where it will not get lost. A lost security freeze PIN can be handled, but it takes a while and is a much bigger hassle than simply keeping track of your PIN.

Keep in mind that a freeze helps prevent one type of identity theft, but does not prevent existing accounts from being accessed with stolen credentials, fraudulent credit or debit card transactions, employment or medical identity theft, or the filing of fraudulent tax returns. In other words, even after you place a security freeze, you must remain aware of the risks of identity theft and protect your personal information.