FBI's Current Internet Crime Schemes - Part 1

AUCTION FRAUD - Auction fraud involves fraud attributable to the misrepresentation of a product advertised for sale through an Internet auction site or the non-delivery of products purchased through an Internet auction site. Consumers are strongly cautioned against entering into Internet transactions with subjects exhibiting the following behavior:

The seller posts the auction as if he resides in the United States, then responds to victims with a congratulatory email stating he is outside the United States for business reasons, family emergency, etc. Similarly, beware of sellers who post the auction under one name, and ask for the funds to be transferred to another individual. The subject requests funds to be wired directly to him/her via Western Union, MoneyGram, or bank-to-bank wire transfer. By using these services, the money is virtually unrecoverable with no recourse for the victim. Sellers acting as authorized dealers or factory representatives in countries where there would be no such dealers should be avoided.

Buyers who ask for the purchase to be shipped using a certain method to avoid customs or taxes inside another country should be avoided. Be suspect of any credit card purchases where the address of the card holder does not match the shipping address. Always receive the card holder's authorization before shipping any products.

If you believe you may have fallen victim to this type of scam and wish to report it, please file a complaint with the FBI. In addition, visit eBay and PayPal's Security Center for additional security alerts and fraud prevention tips.

AUCTION FRAUD - Romania - Auction fraud is the most prevalent of Internet crimes associated with Romania. The subjects have saturated the Internet auctions and offer almost every in-demand product. The subjects have also become more flexible, allowing victims to send half the funds now, and the other half when the item arrives.

The auctions are often posted as if the seller is a United States citizen, then the subject advises the victim to send the money to a business partner, associate, sick relative, a family member, etc., usually in a European country. The money is usually transferred via MoneyGram or Western Union wire transfer. The Internet Crime Complaint Center has verified in order to receive funds via Western Union, the receiver must provide the complete information of the sender and the receiver's full name and address. The funds can be picked up anywhere in the world using this information. There is no need to provide the money transfer control number (MTCN) or the answer to any secret question, as many subjects have purported to the victims. Money sent via wire transfer leaves little recourse for the victim.

The most recent trend is a large increase in bank-to-bank wire transfers. Most significantly, these wire transfers go through large United States banks and are then routed to Bucharest, Romania or Riga, Latvia.

Similarly, the sellers also occasionally direct the victims to pay using phony escrow services. Sometimes actual escrow websites are compromised and other sites resembling them are created by the subjects. Once the funds are wire transferred to the escrow website, the seller discontinues contact. See also, Escrow Fraud.   If you believe you may have fallen victim to this type of scam and wish to report it, please file a complaint with FBI. In addition, visit eBay and PayPal's Security Center for additional security alerts and fraud prevention tips.

COUNTERFEIT CASHIER'S CHECK - The counterfeit cashier's check scheme targets individuals that use Internet classified advertisements to sell merchandise. Typically, an interested party located outside the United States contacts a seller. The seller is told that the buyer has an associate in the United States that owes him money. As such, he will have the associate send the seller a cashier's check for the amount owed to the buyer.  The amount of the cashier's check will be thousands of dollars more than the price of the merchandise and the seller is told the excess amount will be used to pay the shipping costs associated with getting the merchandise to his location. The seller is instructed to deposit the check, and as soon as it clears, to wire the excess funds back to the buyer or to another associate identified as a shipping agent. In most instances, the money is sent to locations in West Africa (Nigeria).

Because a cashier's check is used, a bank will typically release the funds immediately, or after a one or two day hold. Falsely believing the check has cleared, the seller wires the money as instructed.   In some cases, the buyer is able to convince the seller that some circumstance has arisen that necessitates the cancellation of the sale, and is successful in conning the victim into sending the remainder of the money. Shortly thereafter, the victim's bank notifies him that the check was fraudulent, and the bank is holding the victim responsible for the full amount of the check.

CREDIT CARD FRAUD - The Internet Crime Complaint Center has received multiple reports alleging foreign subjects are using fraudulent credit cards. The unauthorized use of a credit/debit card, or card number, to fraudulently obtain money or property is considered credit card fraud. Credit/debit card numbers can be stolen from unsecured websites, or can be obtained in an identity theft scheme. Visit any of the three credit bureaus, Equifax, Experian, or TransUnion, for more information or to place a fraud alert on your credit report. Visit the Federal Trade Commission for additional information on security and fraud prevention tips.

DEBT ELIMINATION - Debt elimination schemes generally involve websites advertising a legal way to dispose of mortgage loans and credit card debts. Most often, all that is required of the participant is to send $1,500 to $2,000 to the subject, along with all the particulars of the participant's loan information and a special power of attorney authorizing the subject to enter into transactions regarding the title of the participant's homes on their behalf.

The subject then issues bonds and promissory notes to the lenders that purport to legally satisfy the debts of the participant. In exchange, the participant is then required to pay a certain percentage of the value of the satisfied debts to the subject. The potential risk of identity theft related crimes associated with the debt elimination scheme is extremely high because the participants provide all of their personal information to the subject.

PARCEL COURIER EMAIL SCHEME - The Parcel Courier Email Scheme involves the supposed use of various National and International level parcel providers such as DHL, UPS, FedEx and the USPS. Often, the victim is directly emailed by the subject(s) following online bidding on auction sites. Most of the scams follow a general pattern which includes the following elements:

1) The subject instructs the buyer to provide shipping information such as name and address.

2) The subject informs the buyer that the item will be available at the selected parcel provider in the buyer's name and address, thereby, identifying the intended receiver.

3) The selected parcel provider checks the item and purchase documents to guarantee everything is in order.

4) The selected parcel provider sends the buyer delivery notification verifying their receipt of the item.

5) The buyer is instructed by the subject to go to an electronic funds transfer medium, such as Western Union, and make a funds transfer in the subject's name and in the amount of the purchase price.

6) After the funds transfer, the buyer is instructed by the subject to forward the selected parcel provider the funds transfer identification number, as well as their name and address associated with the transaction.

7) The subject informs the buyer the parcel provider will verify payment information and complete the delivery process.

8) Upon completion of delivery and inspection of the item(s) by the receiver, the buyer provides the parcel provider funds transfer information, thus, allowing the seller to receive his funds.

Source: Internet Crime Complaint Center (IC3)