A Consumer Action News Alert • February 16, 2023
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  Gold 'n' handcuffs  

The Dept. of Justice (DOJ) reported last month that the founder of My Big Coin, a purported cryptocurrency company, was sentenced to over eight years in prison for a multimillion-dollar fraud scheme. U.S. Attorney Rachael S. Rollins said that for nearly four years, Randall Crater perpetrated a brazen fraud scheme that preyed on investors and customers who put their faith in him and his fake business, resulting in victim losses of over $7.5 million. While the business was FAKE, the many lies were REAL, and included claims that the digital currency was backed by gold (it wasn't) and that the company had a partnership with Mastercard (it didn't). Crater used the millions in ill-gotten gains to buy a house, cars, and over $1 million in antiques (Versailles-inspired cell decor, anybody?), artwork and jewelry. The DOJ story reminded consumers that Postal Inspectors recommend thoroughly investigating all offers and not relying on what they’re told, even when they believe their investments and deposits are protected through the name recognition of an alleged renowned partner.

  Heart of Gold(en)  

We hope no one you know has gotten caught up in a romance scam in the lead-up to Valentine's Day. Romance scams are as popular as ever, according to the Federal Trade Commission (FTC), with victim losses at $1.3 billion in both 2022 and 2021. But let us share some good news, too: A Houston woman—Ms. Dominique Golden—was sentenced by the DOJ last month for her part in schemes that defrauded love-seeking seniors of more than $2.6 million. Golden (quite a name for a scammer, no?) admitted that she was part of a conspiracy that contacted victims via the internet and app-based communication platforms, cultivated relationships of trust, convinced the victims that money was needed for an urgent purpose, and then directed the victims to send money via mail or wire transfer to her and others. And, turns out, Golden also liked gold: She will be forfeiting, among other items (such as Bentley and Mercedes vehicles), a pair of women’s and men's gold oyster perpetual Rolex watches, a gold and diamond Rolex bezel, and a couple of gold chains. For her crimes, the 31-year-old will serve a six-and-a-half-year prison term. 

  Scammers speak your language  

Millions to share. Consumer Action takes pride in our unwavering effort to educate consumers in several languages. Our publications are regularly produced in English, Spanish, Chinese, Korean and Vietnamese. And good thing they are, since...guess who's the recent target of a classic scam? This time it's the Korean community! And, as the FTC warns in an English and Korean scam alert, anyone could be next. The scam goes like this (SCAM GRAM readers will recognize the warning signs): An "American lawyer” asks for a big transaction fee from his target victim in order to help the "King of Cambodia." The King supposedly has $1.2 million in secret funds in a U.S. bank account, but the funds are being withheld by the U.S. government. The King needs the victim’s help to get the money to his son, a student in South Korea. To make the story believable, the so-called lawyer has supporting government documents. What's in it for the targeted consumer? A big cut of the money, of course. In its alert, the FTC describes a victim of this scam who wired over $20,000 to the perpetrators and was still being asked for more money. A real lawyer ultimately encouraged the victim to stop sending more money and to report the fraud to the FTC. The FTC reminds the Korean community, and all consumers, that: 1) You should never pay anyone who contacts you asking for money, regardless of the story; 2) No government official from any country has real money to send to you, and anyone saying they do is a scammer; and 3) If anyone tells you to pay by wire transfer, gift card or cryptocurrency, it’s a scam.

Family vacationing abroad? You could be targeted. An FBI field office warned this month that virtual kidnapping schemes are targeting Spanish-speaking residents of Arkansas and other states. The scheme tricks victims over the phone into paying a ransom to “free” a traveling loved one who they're led to believe has been kidnapped outside the U.S. On average, the FBI reports, families send thousands of dollars to criminals before contacting law enforcement. Why the FBI is referring to these as "virtual" schemes is unclear, though it appears to be related to how the scammers find their targets: After investigating calls originating in Central America and Mexico targeting specific U.S. area codes, the FBI determined that criminals are scanning social media accounts for people traveling out of the country, to then call the traveler’s loved ones with the fake story. The FBI offers a series of tips for avoiding and countering the scam. They urge anyone who encounters or falls victim to this scheme to report it to the FBI at www.ic3.gov or by calling 800-CALL-FBI.


Prevent phone takeovers. In January, T-Mobile announced a data breach that exposed 37 million customers' information to hackers, reported New York's WABC-TV. The story mentions how these data leaks can lead to consumers getting their cell phone hijacked in SIM card swap scams (where scammers pretending to be you convince cell service providers to switch your SIM card information to a phone they own). Two women mentioned in the ABC 7 story had their Citibank accounts drained—one lost $20,000 and the other $60,000. The bank considered the money transfers to be valid since the consumers had responded to authentication texts and calls. One key way to prevent SIM card swaps, ABC points out, is to use two-factor authentication that doesn't rely on texts and to look for apps that authenticate using your fingerprint or face scan. Consumers have additional options for protecting their phones (for example, "number transfer pins" and "port freezes" for Verizon customers), as Clark.com describes in this article, which includes provider-by-provider tips and information. For more on the benefits of authentication apps versus SMS two-factor authentication, see this article by CNET.

Relief for the thief. The devastating news and images following the 7.8 earthquake in Turkey and Syria has many Americans looking for ways to help, but also brings new opportunities for fraud. The WESH-2 NBC affiliate in Orlando, Florida, reported on the BBB's warning to consumers: Scammers are working hard to funnel your goodwill into their bank accounts. Consumer tips for avoiding this scam include: Be very suspicious if someone reaches out to you, whether by phone, email, text or social media, because you have no idea where that money is going; stick with trusted charities that have been around for a while (you can check out charities at Give.org); and be leery of crowdfunding sites, since you don't know by whom the money is being collected and how (or if) the money will be distributed. A detailed list of tips from the BBB's Give.org can be found here.

Used car dealer shenanigans. We were excited to learn about the Washington State Attorney General's announcement that he supports legislation that creates an unwaivable warranty for used car purchases. If the bill passes, Washington would join Arizona, Connecticut, Hawaii, Massachusetts, Minnesota, New Jersey, New Mexico and New York as states with similar legal protections for used car purchases. Current Washington law, the AG's announcement explains, affords consumers few consumer protections for used cars that break down shortly after purchase compared to new cars purchased. This disparity disproportionately impacts communities of color and working families. State Rep. David Hackney said, “People rely on their cars and deserve better than falling prey to deceptive practices." (We say amen to that!) If you're in the market for a used car, check out the AG's announcement for some examples of bum deals you will want to avoid at your local used car dealer. And please, take it from us, who hear so many car buyer nightmare stories: 1) Don't buy a used car without getting it inspected; 2) Arrange your own financing before going to the dealership; and 3) Consider carefully whether you need to pay extra for an extended warranty that may not cover needed repairs down the road. If you're really, really in the market, don't miss these additional used car buying tips from Consumer Reports.

Want to be there for someone? Maine’s WABI-TV reports that AARP is warning consumers of a spike in “do me a favor” scams. You might know these as imposter scams, where scammers contact you by email (or text, social media direct message, etc.), and pretend to be your boss, a friend, or someone else you know. In an Investigate TV video on the WABI-TV website, AARP's Amy Nofziger explains that the scammer will ask the consumer to buy a gift card and instruct the person to send the scammer images of the front and back of the card—everything they need to steal the money from the card. Nofziger's tips for avoiding the scam include listening to your gut—if it doesn’t feel right, research before you act; looking carefully at email addresses to make sure they are exactly, and not just close to, the correct address; calling the person who is (supposedly) contacting you and asking them if the request is real; and being very suspicious of urgent requests.

Golden sunsets on the horizon? With Mardi Gras festivities soon to be a distant memory, and Easter fast approaching, time is running out to plan that spring break vacation to popular sun-filled destinations around the country. But don't let hurried planning cause you to let your guard down. Travel scams are plentiful when folks hit the road and skies. Now is a good time to review the BBB's top five vacation scams to watch out for when making travel plans. These include, among others, the "vacation rental con" (properties that aren’t for rent, rentals that don’t exist, and rentals that are significantly different than pictured); "free" vacation scams (that aren't free); and hotel scams (from schemes to steal your credit card number to free Wi-Fi connections that the scammers set up to skim your information). Other common scams and shopping-for-travel tips are provided by the FTC here. And the Florida AG published a handy list of tips for spring-breakers here. Included are tips for vacationers planning to rent cars.

Parents take note. As part of the FTC's 2023 Identity Theft Awareness Week, Consumer Action released a short video on children's identity theft, featuring guest speaker Eva Velasquez, president and CEO of the Identity Theft Resource Center. In the video, Velasquez discusses identity theft and fraud targeting minors, ways to recognize if a minor is a victim of identity fraud, and how to protect a minor's identity. When checking out the video, please remember to subscribe to our YouTube channel for free using this link.

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