A Consumer Action News Alert • April 14, 2023
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  I’d recognize that voice anywhere  

Scammers are hoping you'll recognize the voice of your friend or loved one after they clone it using artificial intelligence (AI) technology that's expected to take off big-time in the coming months and years. The FTC described one possible scenario in which scammers use a cloned voice: You get a call from your panicked grandson, who says he just wrecked his car and landed in jail and needs you to send money to get him out. You've heard about grandparent scams, but this caller sounds just like your grandson, so how could it possibly be a scam? As the FTC explains, all the scammer needs for this is a voice cloning program and a short audio clip of your family member's voice—something posted online, for example. You may wonder if the technology has really advanced that much. Chris Pierson, CEO of BlackCloak, an Orlando, Florida-based executive digital protection company, told TheStreet that even a few seconds of the person’s voice is enough for the AI tools to capture the "essence of that person’s voice and then create entirely original statements and conversations with the same frequency, intensity, harmonic structure, tone and inflection." Pierson also predicts that voice cloning will most likely be applied en masse and really create a "cyber cyclone of fraud." Alex Hamerstone, advisory solutions director at TrustedSec, a Fairlawn, Ohio-based ethical hacking and cyber incident response company, told TheStreet that businesses will be attractive targets because workers are more likely to open an email, click a link or download an attachment—especially if they receive a call from someone who sounds like their boss urging them to do so soon after the email arrives. The FTC says don't trust the voice with the urgent request. Call the person who supposedly contacted you, at a phone number you know is theirs, to verify the story. If you can’t reach the person directly, try to get in touch with them through another family member, a friend or a coworker. 

  Not this little piggy  

The fastest-growing scam he's seen in 15 years is how Miami-based FBI supervisory special agent Zacharia Baldwin described to NBC a type of cryptocurrency scheme that originated in Southeast Asia and is known as "pig butchering" (loosely translated from its Chinese name). A U.S. Attorney’s Office communication explained that scammers refer to victims as “pigs” because they are “fatten[ed] up” by scammers using elaborate storylines to make them believe they are in a romantic or otherwise close personal relationship. Once the victim places enough trust in the scammer, the scammer brings the victim into a cryptocurrency investment scheme. The level of losses is astounding. One woman who was contacted via LinkedIn eventually lost $2.5 million. The average loss is $50,000, according to FBI statistics. Scammers often target victims through social networking and online communications platforms, dating websites, and phone calls and text messages meant to appear to have been misdialed, explained the federal agency's release. The sample text conversations posted by NBC provide a good visual of how scammers attempt to quickly engage consumers who are polite to the "wrong number" texter. "Thank u for your kindness," says one scammer to a courteous consumer, followed quickly by "May I know your name?" This is one situation where it’s best to forget what you were taught about good manners, and just hang up on them or ignore their texts. The U.S. Attorney also explained that fraudsters use bogus websites, apps and other tools to give the appearance of a legitimate trading platform. After victims make an initial “investment,” the platform purports to show substantial gains and may allow victims to withdraw initial gains (to further engender trust). Once victims make large investments, they will be unable to withdraw their funds. But the fraud doesn't stop there. Scammers will request additional investments, taxes or fees, promising that the payments will allow victims to regain access to their accounts. The scam stops only when the victim is deprived of any remaining savings. FBI Denver offers tips we can use to protect ourselves, here.

  From across the pond  

Wrong side of the road. We love our Twinings Tea, we're dazzled at the sight of a Rolls Royce, and we (hate to admit it) often keep up with the royal goings-on in and out of Buckingham Palace. But one thing that isn’t so charming about the United Kingdom is a new twist on the staged auto accident scam. The U.S.-based Coalition Against Insurance Fraud and the UK-based Insurance Fraud Bureau recently described the "clip for cash" scam (different from the traditional “crash for cash” version) that's now spreading across the land: Drivers become victims when, while driving down a residential road, a scammer in a parked car throws an object, such as a large rock, at the side of the passing victim’s car. The fraudster then flashes their car's headlights to get the startled driver to stop, at which point the perpetrator accuses them of clipping their (already damaged) side-view mirror. The fraudster demands cash—even pressuring the victim to visit an ATM—and is reluctant to pursue an insurance claim. If the victim refuses to hand over money, the scammer can become physically intimidating. Common targets are young and elderly drivers. Check out this short video of the scam unfolding so you'll be ready if the scam makes its way across the pond. And heed this advice: Always exchange insurance information at the scene of an auto accident (fake or not), and call police if anyone is hurt, you feel threatened, or you suspect fraud.
Cold call that warms you up and wrings you out. Speaking of British miscreants, this next one made $13 million off of American retirees who thought they were investing in rare wines and Scotch whisky that was being held in bonded warehouses in the UK to appreciate in value. The scheme was foiled by the FBI last year, when UK-born Ohio resident Casey Alexander, 26, was arrested for conspiracy to commit wire fraud in the "biggest whisky scam the world has ever seen." Alexander is accused of using aggressive and deceptive tactics to swindle elderly investors, who were sold whisky casks that did not exist, never saw a penny of the promised returns, and were ignored or put off when they tried to recover their money. As the Daily Mail explains to its UK readers, a lack of regulation in the market for whisky casks means would-be investors can become easy prey for conmen. Alexander may be out of commission, but there’s always another scammer in the wings, so let’s review the red flags that may have been missed. For starters, Alexander pulled in victims by cold calling them (red flag!) about rare investment opportunities (another red flag). Victims were promised up to 50% returns on investments (huge red flag!), as reported by Wine Spectator. And, as reported by NBC, the perpetrators kept in contact with the victims, convincing them to keep investing by promising even larger returns (another huge red flag, and definitely in the too-good-to-be-true realm!). As Warren Buffett has advised: Don't invest in something you don't understand (an important bit of advice also offered in Consumer Action’s recently published investing guides). We think investing in rare wines and whiskies easily falls under this category for most of us.


Scammers on the move. If you're planning a move, beware of common moving company schemes. Two weeks ago, the Federal Motor Carrier Safety Administration (FMCSA) announced the launch of Operation Protect Your Move, a nationwide crackdown on scam movers. The FMCSA is deploying dozens of investigators across the country in an enforcement sweep to address the significant uptick in complaints about movers holding household possessions hostage to extort exorbitant additional charges from consumers. It will also address complaints against companies that are not in compliance with federal safety and consumer protection regulations and statutes while transporting household goods. The operation covers both movers and the brokers that purport to connect consumers to local movers but instead facilitate fraud by promoting scams. Newsweek reported that the FMCSA's announcement comes on the heels of the online magazine's own investigation into the growing problem of moving scams, including companies launching with phony online reviews. When real reviews come in from people who have been dramatically overcharged while their goods were held hostage, damaged, lost or stolen, the firms change their names and begin the process again with a new FMCSA license. Shockingly, Newsweek reports that the FMCSA has, since 2019, lacked the authority to assess penalties for moving company violations due to an administrative law judge's decision. However, the agency can—and announced that it will—formally document violations, and that it retains the authority to review and revoke the licenses of movers and brokers. The FMCSA will also work directly with consumers to guide them through the process and help get their money and goods back. We guarantee you'll be extra cautious when hiring a mover after you watch Newsweek's video about families who lost irreplaceable property to moving scams. Find tips and resources for hiring a moving company here and here.

“Help” that’s anything but helpful. In early April, the FBI issued an alert warning the public about for-profit companies that offer “assistance” services to sextortion victims (people blackmailed with threats to share nude or sexual images of them unless they give in to the blackmailer’s demands). These companies, the FBI explained, charge exorbitant fees and use deceptive tactics—including threats, manipulation and false information—to coerce sextortion victims into paying for their services. Some of the services for which the companies charge fees, such as sending the perpetrators cease and desist orders, make victims feel better but are not legally enforceable. The companies may also attempt to discourage victims from reporting the sextortion to law enforcement—an indication that the companies may be directly or indirectly involved in the sextortion activity. The FBI alert provided three examples of consumers who had been victimized—all of whom were juveniles who ended up handing over between $1,500 and $5,000 for the so-called sextortion victim assistance services. The FBI recommends that sextortion victims instead contact law enforcement and nonprofit agencies, like the National Center for Missing & Exploited Children, who assist sextortion victims at no charge. The FBI's alert lists the signs of a sextortion “assistance” service you should steer clear of and offers legitimate free(!) resources. 

Tax—not scam—season closes tonight. The Internal Revenue Service wrapped up its annual Dirty Dozen list of tax scams for 2023 with a reminder for taxpayers, businesses and tax professionals to watch out for these schemes throughout the year, not just during tax season. As the IRS explains, many of the schemes peak during filing season, as people prepare their tax returns. But, in reality, these scams can occur throughout the year, as fraudsters look for ways to steal money, personal information, data and more. To help people watch out for these scams, the IRS and its Security Summit partners (which include state tax agencies and tax industry professionals) provided an overview recapping this year's Dirty Dozen scams. Key tips offered by IRS Commissioner Danny Werfel are to avoid sharing sensitive personal data over the phone, email or social media, and to always be wary if a tax deal sounds too good to be true. Some items on this year's Dirty Dozen list of scams are new and some make a repeat appearance. Check out the list to avoid being scammed by bogus tax avoidance strategies, offer-in-compromise mills, swindlers offering to help create online IRS taxpayer accounts, and other schemes. The IRS encourages people to report individuals who promote improper and abusive tax schemes, as well as tax return preparers who deliberately prepare improper returns. 

When trouble comes a-knocking. Kentucky Attorney General Daniel Cameron's office issued an alert to the state's residents with tips many of us can use, regardless of the state we call home. The alert warns about construction and repair scams that sometimes follow severe storms. It explains that out-of-town or dishonest contractors may go door-to-door to solicit business from residents who have experienced property damage. While not all door-to-door contractors are scammers, the AG's office acknowledges, some may lack the proper licensing for the area, offer quick fixes, or make promises they can’t deliver. To avoid construction and repair scams, the AG offers good advice, including being proactive about finding a reputable contractor (do research, get references), getting more than one estimate, resisting high-pressure sales tactics (such as a “special” price if you hire now), paying with a credit card (giving you the right to dispute the charge, if necessary), and not signing over an insurance settlement check. The Kentucky AG's office acknowledges that they have not received scam complaints related to construction repairs following the recent storms, but they urge the state's residents to watch out for possible fraud. We urge our readers to do the same. Contact your state's consumer protection office to find out who licenses and regulates contractors in your state.

California consumer protection catch-up. California Attorney General Rob Bonta and Assemblymember Brian Maienschein on April 7 announced new legislation to protect victims of predatory businesses. The AG's office explains that, while current state law allows victims to be eligible for restitution after a judgment has been reached, in many cases, successfully prosecuted businesses (such as Corinthian Colleges, a predatory chain of for-profit schools, and USA Discounters, a scammy retailer that targeted servicemembers) collapse or become insolvent, leaving no resources to compensate victims for their losses. The bill would establish a new Victims of Consumer Fraud Restitution Fund in the state Treasury that would be funded by the penalties paid by businesses that violate the law, and would be used to help make victims whole. The AG's announcement points out that, while California has strong consumer protection laws, other states, including New York and Arizona, have taken the lead in providing this type of safeguard for consumers. Additionally, the federal government has established the Civil Penalty Fund, allowing the Consumer Financial Protection Bureau (CFPB) to compensate victims who haven’t received full compensation for their harm through redress paid by the defendant. 

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