Mystery Shopper Scams Never Die

One of the first fraud prevention topics I ever wrote about (all the way back in 2009) was the Mystery Shopper Scam.

The scheme was almost always the same: victims would receive a cashier’s check in the mail with instructions to cash the instrument at their bank, then wire most of the money (a couple thousand dollars) back to the sender, allegedly to report on the “customer service” at Western Union. Later, the check would turn out to be counterfeit, leaving the victim on the hook for the money they already wired.

Of course, eventually people started catching on. Banks and credit unions began to verify cashier’s checks and ask questions before handing over large sums (bringing an end to the days of a cashier’s check being “as good as cash”), and tellers were trained on how to spot a fishy monetary instrument. Western Union got hit with a $586 million fine for “aiding and abetting wire fraud” and became more vigilant about how its services were being used. Consumers began to be wary of strangers mailing cashier’s checks.

However, I received this text message recently:

Become a Mystery Shopper with us. You will be requested to shop at various locations: Walgreens, CVS Pharmacy, Family Dollar, 7-Eleven, and Walmart. You will conduct “American Express Gift Cards” and Groceries purchases. Verifying stores ID Requirement process are being met. Pay Rate: $295. Apply today online [URL redacted]. HR Byrnes

From this, I gather that the scam has evolved to circumvent the changing landscape. The “Groceries purchases” are irrelevant; the real action is the American Express Gift Cards. If I had to guess, I would say that at some point they ask victims to buy these cards preloaded with some specific amount, then relay the card numbers back to them. Maybe there is a fake check involved (some of the above stores do offer check cashing services), but if they can convince the victim to load up a gift card and tell them the numbers, why go through the trouble?

Notice what they’ve done here: by switching from wire transfers to gift cards, the only other person the victim needs to have contact with is the cashier selling the cards, and with nothing inherently suspicious about loading a gift card, what is the likelihood that cashier is going to ask any questions? After that, the victim is alone, with nobody between them and their phone to say, “Hey, maybe don’t give those numbers to a stranger.”

One more point to make: real mystery shopper gigs do exist. They pay about $10 per assignment, less than 3.5% of the rate being offered in this text message. Nobody is getting paid $295 for 15 minutes of work, at least not as a mystery shopper.

Don’t Fall for the White Van Speaker Scam

You’re at a gas station or passing through a parking lot when a guy calls to you from a van filled with stereo equipment. He says he works for a company that deals in high-end home theater systems for wealthy clients, and they just got done with an installation for which too many components were ordered. He shows you brand new speakers, amplifiers or digital projectors, still in their boxes, and says they’re selling them at a loss because they can’t be returned. He produces a brochure showing speakers priced at $849, the same ones he’s willing to sell you for a mere $50.

How would you respond to this situation?

If you said, “walk away and don’t buy anything,” your instincts are correct.

The White Van Speaker Scam has been around for decades, at least since the 1980s and possibly earlier. It doesn’t have to be a van, which doesn’t have to be white, and they don’t have to be selling speakers, but the basics remain the same: convincing a buyer that they are getting a big discount on high quality goods that turn out to be junk. It can happen in-person like the example above, or online through sites like Craigslist and Facebook Marketplace.

The items being sold always turn out to be garbage, no matter what jargon the seller throws at you. Speakers are almost never actually capable of handling the claimed wattage, cheap paper cones are concealed with fake ones, and the enclosures are often weighted with bricks or concrete to give them more heft (to make them “feel expensive”). Stereo components and projectors are similarly cheaply made, off-brand and occasionally non-functioning. There are cases where the box doesn’t contain anything but rocks or bricks.

No professional home theater installer is ever going to “accidentally” order too many speakers or any other equipment. What company would have an order for a single 5.1 surround system and buy six more systems by mistake (and drive all six to the job site)? And even if they did, wouldn’t they just warehouse the extras for the next orders? There’s no rule that says, “we didn’t use these supposedly-high-end electronic components today, therefore we either have to sell them at a loss or toss them in a dumpster.”

However, you don’t really need to think about it that much. You only have to remember two things: first, if a deal seems too good to be true, it is too good to be true. Second, don’t buy electronics from dudes in vans.

Don’t Get Scammed a Second Time

It’s bad enough falling for one scam and losing money. What’s worse is losing even more money to a Recovery Scam.

Recovery scams target victims who have already fallen for a different scam. Con artists keep lists of victims and their contact information, what they fell for and how much money was lost, and sell these lists to other scammers. Some of these will use this information to conduct recovery scams, which are just another form of advance fee fraud.

It starts with a phone call or an email, or even a letter. The person contacting you will claim to represent a private company or federal agency and offer to help you get back the money you lost in a previous scam. They may even claim to be the (nonexistent) company that stole your money in the first place, offering a refund.

What happens next is not hard to predict: in order to get your money back, or file the paperwork to do so, or whatever else they’ve cooked up to sound believable, the recovery scammer will ask you pay an upfront fee, which might involve the usual sketchy payment methods like gift cards, wire transfer or cryptocurrency. They may ask for banking or credit card account details. Or they may send you a check for much more than the amount you originally lost; you will then be instructed to cash the check and wire the overage back to the sender. Later, the check turns out to have been counterfeit and you are once again left holding the bag.

If you have fallen victim to a scam, and especially if you sent money by some irreversible, untraceable means, you must admit to yourself that those funds are gone for good (as painful as that admission can be). Also, be aware that there is now a decent chance someone will attempt to victimize you a second time with a recovery scam. But anyone who contacts you out of the blue, regardless of the stated reason, to ask for money or financial information is almost never someone you should trust.

Scams That Target Young People

Endless articles are written about scams that focus on the elderly, which can give the impression that only seniors are targeted by (and fall for) scams. However, young people fall victim to a host of schemes every day. Many of these are just the same old tried-and-true scams we’ve seen a million times, with their approaches tailored to their intended group.

What makes young people susceptible to these scams? Trust in the digital world is a major factor—a world in which nearly everything can be done online is the only world many have ever known, and they inherently trust it. Additionally, humans of any age are easy to trick with images, and young people are no different, so their taking of social media images at face value is understandable. And of course, lack of life experience plays a role.

Money Flipping: these scams often originate on Instagram, with profiles appearing to depict fabulous material wealth. The scammer will offer the victim an investment that seems too easy to pass up: “Send me a few hundred dollars with CashApp or Venmo, and I will turn it into thousands and send it back.” Only the first part of the transaction ever actually occurs. Sometimes they dress it up as a cryptocurrency investment, or complicate the pitch in different ways, but it always comes down to some “secret” method of magically multiplying money.

Sugar Daddy/Sugar Momma: an (alleged) older person will contact a young victim, offering a generous “allowance” in return for online companionship. From there, the scheme proceeds into well-worn scam territory, usually either a fake check scam or advance fee fraud. In the former, the victim will be sent a check and instructed to purchase gift cards or Bitcoin, or make a wire transfer. In the latter, the scammer will request an upfront payment from the victim, to “prove” his or her loyalty. In other cases, the scammer will offer to pay loans or bills, then ask for financial account information. You can guess what happens next.

Blackmail Scams: the scammer, posing as an attractive stranger, will goad the victim into sending compromising photos, or convince them to meet in a video chat app (to capture video of the same), then threaten to distribute these images to the victim’s friends, family or workplace if payment is not made. Since the initial approach is made via social network, the scammer will have easy access to the names of people the victim knows, which adds urgency to the threat.

Drop-Shipping Scams: counterfeit fashion is rampant online, with websites offering deep discounts on designer goods. What actually arrives, several months later, is incredibly cheap, unwearable knockoff clothing or accessories, or cosmetics containing unknown ingredients.

Influencer Scams: a related offshoot of the drop-shipping scheme is an apparent offer from a designer to be “sponsored” by their brand (in other words, the start of the elusive, sought-after career as an INFLUENCER), which is then followed with an offer to purchase their items for 50% off. Here’s the thing: if they’re not giving it to you for free, you’re not an influencer, you’re a customer. And you’re going to get the same drop-shipped knockoff junk they sell to everyone.

Online Auto Sales Scams

An online listing for a used car from a private seller can be tempting, especially when the price is right, but too many people fall victim to scams involving these transactions. There are a variety of warning signs.

First, look at the price of the car. Compare the asking price to a trusted source for used car values. If there’s a huge difference, stay away. $1,000 for a car that retails for $4,000 is a bad sign.

Next, a seller’s refusal to let you see or test-drive the car in person is a huge red flag. Of course, there is still the matter of a pandemic to think about, and a lot of scammers have used this very reason for not allowing potential victims to see the vehicle, but a list of excuses as to why you must purchase the car sight-unseen should send up some signals.

On a similar note, beware of ANY convoluted story from a seller, or urgency. “I need to sell this car right away because my (whomever) did this or that and I have to go to (someplace) to work on (something) or my (whatever) is going to (whatever).” You don’t NEED all that information, and no legitimate seller should be constructing a narrative around the car other than, “How much are you willing to pay for it, do I agree to that price, and when are you going to pay for it?” If the seller claims to be overseas, in the military, or working in an oil field, stop all communication. These are some of the most common scam setups (also popular in online romance schemes).

Speaking of payments, if you’re looking at a car on an online service such as eBay Motors, do not allow a seller to communicate or do any business outside of that system (such as by email or text message). Scammers will do this to make the transaction untraceable. Some will go as far as setting up a fake website that mimics eBay in order to gain your trust, then attempt to convince you to pay with gift cards or by wire transfer. As with every other case, payment by these non-traceable, non-reversible methods is a sure sign of trouble.

5 Tips for Avoiding Repair Scams

Spring means a lot of things: longer days, warmer temperatures, trees and flowers (and allergies) in bloom, migratory birds returning from their winter homes.

It also means fixing up all the stuff on your house that broke, fell, cracked, blew away or started leaking over the winter. This also means home repair scammers coming out of the woodwork.

Many homeowners can do some repairs on their own, but most of us need help with bigger issues. Additionally, age plays a role in our ability and confidence to perform certain tasks. At 40 you might be willing and able to climb a ladder onto the roof; at 80 it may not seem like such a great idea. Home repair scammers often target older homeowners for this very reason.

Here are five things to watch out for.

  1. Someone knocking on your door: this is the number one way non-trustworthy contractors will approach you—out of the blue, at your doorstep, allegedly just having noticed some major problem with your house while in the neighborhood. No legitimate contractor works this way.
  2. Claiming to have extra materials left over from another job: any contractor worth your business isn’t going to “accidentally” order too much of anything.
  3. Refusing to put anything in writing: a verbal agreement without a written contract detailing the job and final cost is an invitation for the price to suddenly double or triple when the (likely shoddy) work is done. Get multiple bids, in writing, before beginning any major repair.
  4. Wanting full payment in cash up front: this is a setup for a classic take-the-money-and-run scheme.
  5. High-pressure sales tactics: don’t trust anyone trying to make you reach an immediate decision. A good contractor knows most homeowners are not going to go with the first bid, and that price isn’t necessarily the only deciding factor when choosing.

Be extra cautious after any kind of major storm event that caused flooding or other damage. Scammers will hit the streets in droves after a big storm, offering to fix rooves and gutters and siding. But the same rules still apply. You don’t want to end up losing money on some contractor who did lousy (or no) work.

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.