Peer-to-peer pay platforms such as Venmo, Zelle or Cash App are easy to use – but you need to avoid scams. Below are some best practices.
Jennifer Jolly, US Specialist TODAY
Just when you think the red flags associated with a scam must be fairly clear, you hear more worrying references when it comes to banknotes and gifts.
All the bells for the Mega Millions jackpot – and one ticket won in South Carolina, which received a prize worth about $ 1.6 billion – could cause even more scams.
What is a big sign of a draw scam?
The catches are usually the ones: You have to send money for taxes – or buy some products – before you get these incredible consignments or lottery.
The end result: You only lose money, you earn nothing.
Nearly half a million people reported a clerical scourge or a safari in law enforcement agencies in the United States and Canada over the last three years. The reported losses amounted to $ 117 million in 2017, according to a report by the Office of Better Entrepreneurship.
The real number of casualties and damages is likely to be much higher, as many victims are too embarrassed to report it, according to experts.
More: Social insurance and Medicare fraud demand heating: What to expect
The programs are different. Fraudsters can communicate with direct mail, social media, phone calls, text messages, and pop-up smartphones.
Many times, the victims are elderly people who may have lost a loved one, just passed a divorce, lost their job or faced some other hardship. They hope desperately that somehow their luck has changed.
Some scammers also claim to be linked to the established name of Clearing House Sweepstakes publishers.
Other victims may be told they have to pay a transfer fee to send their profits to the US from Jamaica.
In many cases, callers can tell you that you have to go out and buy gift cards to pay for fees or other charges if you want to collect a prize for a race.
Last year, 2,820 people reported sweeping calls and lottery scams at Better Business Bureau Scam Tracker, an online fraud tracking tool.
More: This $ 10,000 check on the post office is probably a simple fraud. Here's how to avoid becoming a victim
The median loss was $ 500. The most common way of payment was bank transfer. But scammers often ask gift cards now.
Some tips from BBB:
- Never send money or buy gift cards to cover taxes or other fees to win a prize.
- Be Extremely Careful in Social Media: The FBI Internet Crime Center reports that about one-third of the complaints received about the theft / scam of lottery scams appear through the social media. Many victims communicate via Facebook.
- An important point to keep in mind: If you end up with a scam, you could end up with a database used by scammers and end up receiving more cold calls.
Many times, according to the BBB report, crooks play the odds when they come in contact with the elderly. Fraudsters may hope to find victims with mild cognitive dysfunction, dementia or Alzheimer's disease.
Elderly people can also be easier to communicate because they have lived in the same place for a long time – and they can just have a lot of money saved.
Another huge red flag: Gift cards
Frauds of all kinds require more often payment through a gift card, particularly iTunes and Google Play cards, according to the Federal Trade Commission.
Gifts and rechargeable prepaid cards are now the No. 1 payment method for fraud scams, according to the FTC.
About 54 percent of people who reported losing money to a crook who shares the Internal Revenue Service or other government agency said they were paid with a gift card. By contrast, about 16% reported bank wire transfers and 5% reported that fraudsters requested cash, according to reports made to the FTC from January to September of this year.
More: Here's how a consumer desperate for a loan got hit by a false scam control
Consumers who have lost money on fake programs also claim that scammers have demanded payment on gift cards, such as Best Buy cards.
And more workplace scammers also ask for gift cards.
The fraudster who imitates a company executive or other person of the authority often asks to buy multiple gift cards for personal or business reasons, according to an FBI report on the Internet Crime Complaint Center.
Perhaps a so-called manager suggests buying gift cards for a work-related task or as a gift for a special personal occasion. But a scammer only mimics the manager and gift cards are then used to buy goods and services that may or may not be legal.
In some cases, fraud may involve bank wire transfer payments.
Real estate companies, law firms, religious organizations and technology companies have targeted these scams.
A total of 1,164 business and gift card complaints were submitted to IC3 between 1 January 2017 and 31 August 2018 – a measurable limit from 2017.
Total losses were about $ 1 million. The average damage per incident was less than $ 900.
Businesses are alert to watch out for any email, phone call, or text message that requires multiple gift cards, even if the request appears formal.
It is a good reminder as we begin the holiday season. If the boss looks suddenly generous with gift cards, check out if this request for gift purchase for the staff really comes from the boss.
Contact Susan Tompor at [email protected] or 313-222-8876. Follow Susan on Twitter @Tompor.
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