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CHIPS Articles: Scammers: What will they try next?

Scammers: What will they try next?
Three new scam alerts from the FTC
By CHIPS Magazine - August 11, 2017
Imposter Poses as Friend or Family Member

You answer the phone, the caller, posing as a family member or trusted friend, says, “There’s been a mistake. I’m in jail and need money for bail.” The fraudster then instructs you to phone a “lawyer” that she or he suggests who will explain everything — and vehemently warns you not to call anyone else!

Has it happened to you — someone pretends to be a friend or family member in need of money for bail, a medical emergency, or other catastrophe?

It’s a common hoax, according to the Federal Trade Commission, which investigates and prosecutes thousands of consumer fraud cases each year.

In one case investigated by the FTC, scammers even told the victim that he could be arrested and fined if he told anyone about their conversation. Why? Scammers don’t want you talking to anyone else. They want you to act fast, without thinking too carefully.

If you get a call like this, get off the phone and check it out immediately. Call your loved one or another family member using a phone number you know is valid. Then, tell a friend about your experience. By talking about this scam, you can help someone else avoid it. And please, report it to the FTC.

A high-priced low-cost trial offer

We have all seen online ads with attention-grabbing offers to let you try a product — or a service — for a very low cost, or even for free. Sometimes they’re tempting: guarantees to build muscles, lose weight, or have whiter teeth or younger-looking skin — for just a dollar plus shipping?

That is until the great deal turns out to be an expensive rip-off. That’s what the FTC says happened in a case it announced August 8.

The defendants sold tooth-whitening products under various names, and hired other companies to help them market the products. These affiliate marketers created online surveys, as well as ads for free or low-cost trials — all to drive people to the product’s website. What happens next is so complicated that the FTC created an infographic (Figure 1) to explain it.

In short, once people ended up on the product’s website, they filled in their info, put in their credit card number, and clicked “Complete Checkout.” When unsuspecting victims clicked this button they not only got the free trial of the one product, but were actually agreeing to monthly shipments of the product at an incredible cost of $94.31 each month.

As if that wasn’t audacious enough, next, another screen came up, and victims were asked to click “Complete Checkout” a second time. But the second screen wasn’t a confirmation screen for the trial of the product. Instead, by clicking this button victims were actually agreeing to monthly shipments of a second product! So, what started as a $1.03 (plus shipping) trial of one product wound up being an unexpected two products at an astonishing $94.31 each — for a total monthly charge of $188.96 plus shipping.

Trial offers can be enticing but there is often a catch, the FTC cautions. So if you are tempted, do some research first, and read the terms and conditions of the offer very carefully. Sometimes, however, marketers are very clever — and scams can be hard to spot.

Look again at the infographic … would you have known what charges were about to hit your credit card? If you use your credit card for a low-cost trial offer, be sure to check your credit card statement closely. If you see charges you didn’t authorize, contact the company and your bank immediately. And please report it to the FTC.

Scammers impersonate the National Institutes of Health

Consumers are reporting another government imposter scam — this time the scammers are pretending to be calling from the National Institutes of Health (NIH). According to reports to the Federal Trade Commission, callers are telling people they’ve been selected to receive a $14,000 grant from NIH. But to get the grant callers tell victims to pay a fee through an iTunes or Green Dot card, or by giving their bank account number.

If you get a call like this from someone asking you to pay money to get money, hang up immediately. The federal government will not call you to give you a grant. NIH does give grants to researchers, but they have to apply for them, and those grants are for the public good, not for personal use.

Also, the federal government will never call you, demanding that you give your personal or financial information such as your bank account or Social Security number.

Has a caller ever asked you to wire money, cash a check they send you, or use a prepaid card to pay someone else? Those are all red flags. No legitimate entity — and certainly not the government — will ever ask you to do any of those ways.

For more tips on avoiding government grant scams, check out NIH’s handy guide. Did you send money to an NIH imposter? Get in touch right away with whichever payment service you used (your bank, MoneyGram, Western Union, iTunes…) and report the fraud. You might not get your money back, but you certainly won’t if you don’t report it. And then tell the FTC.

The Federal Trade Commission is the nation’s consumer protection agency. The FTC works to prevent fraudulent, deceptive and unfair business practices in the marketplace. The Commission also enforces federal antitrust laws that prohibit anticompetitive mergers and other business practices that could lead to higher prices, fewer choices, or less innovation. Whether combatting telemarketing fraud, Internet scams or price-fixing schemes, the FTC’s mission is to protect consumers and promote competition. The FTC administers a wide variety of laws and regulations, including the Federal Trade Commission Act, Telemarketing Sale Rule, Identity Theft Act, Fair Credit Reporting Act, and Clayton Act. In total, the Commission has enforcement or administrative responsibilities under more than 70 laws.

Someone pretends to be a friend or family member in need of money for bail, a medical emergency, or other catastrophe — it’s a common hoax, according to the Federal Trade Commission, which investigates and prosecutes thousands of consumer fraud cases each year. FTC image.
Someone pretends to be a friend or family member in need of money for bail, a medical emergency, or other catastrophe — it’s a common hoax, according to the Federal Trade Commission, which investigates and prosecutes thousands of consumer fraud cases each year. FTC image.

Figure 1. The FTC created an infographic about a teeth-whitening scheme. If you use your credit card for a low-cost trial offer, be sure to check your <a href="https://www.consumer.ftc.gov/articles/0332-credit-debit-and-charge-cards" alt='Link will open in a new window.' target='whole'>credit card statement</a>closely. If you see charges you didn’t authorize, contact the company and your bank immediately. And please report it to the <a href="http://www.ftc.gov/complaint" alt='Link will open in a new window.' target='whole'>FTC</a>.
Figure 1. The FTC created an infographic about a teeth-whitening scheme. If you use your credit card for a low-cost trial offer, be sure to check your credit card statementclosely. If you see charges you didn’t authorize, contact the company and your bank immediately. And please report it to the FTC.
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