Internet fraud is alive and well

By now, most of us know not to click on those links in unsolicited e-mails. But apparently Internet fraudsters are still finding plenty of victims.

The number of complaints reported to the U.S. government rose 3.4 percent in 2011, to 314 246, according to a recent report (pdf) by The Internet Crime Complaint Center (IC3), a partnership between the Federal Bureau of Investigation (FBI) and the National White Collar Crime Center (NW3C). The crimes resulted in financial losses of US $485 million last year.

And the victims aren’t just unsuspecting consumers, but sometimes sophisticated professionals you’d think would know better. The IC3 reports that law firms have been defrauded of millions of dollars in various debt collections scams. The firms are typically contacted via e-mail for help with debt collection, a divorce settlement or real estate purchase. The firms receive checks for large sums, usually $100,000 or more, from the alleged debtor and are told to wire the money, minus the firm’s fee, of course, to the purported client’s bank, usually located in Korea, Ireland, China or Canada. The original checks turn out to be counterfeit, and the law firm is out tens of thousands of dollars.

That’s a twist on one of the most common types of Internet scams, which asks for help in moving large amounts of money and sends a large check to the victim first, which tends to convince the victim it’s legitimate. Indeed, who hasn’t at some point received a desperate plea from a wealthy Nigerian desperately trying to transfer his millions out of the country. In fact, the IC3 reports that a court in Lagos, Nigeria, has granted the extradition of Emmanual Ekhator to the United States. Ekhator allegedly defrauded U.S. law firms of more than $29 million using such schemes. He is scheduled to stand trial in Pennsylvania.

The lesson here is obvious: if someone’s sending you money, be very suspicious. The government has set up a website to check for the most common scams: https://www.lookstoogoodtobetrue.com/

Other popular types of scams reported to IC3 include:

• Convincing a victim to pay for goods or services in advance, then never delivering.
• Stealing personally identifiable information and using it to commit crimes (identity theft).
• Posing as an FBI agent to defraud victims.

Apparently, people drop their fraud guard when an e-mail comes from a government entity, something that criminals take advantage of. Although the report says that “government agencies do not send unsolicited e-mails,” that’s not exactly true. They do, however, send unsolicited regular mail, like tickets issued when a camera catches your car speeding or running a red light. And few people will draw a distinction between print mail and e-mail. The IC3 got more than 70 complaints over a four-month period last year from New York state residents who’d paid traffic tickets they’d received by e-mail from a spoofed web address for the New York State Police. The e-mail told victims to print the ticket and mail it along with payment to an address that was supposedly a courthouse. It’s bad enough getting caught by those camera speed traps and being sent a legitimate ticket. How mad would you be if the whole thing was a fraud? Best to call the police before mailing it in.