Red Flags. I obviously use a webhost for my sites, but I use LunarPages, which is located in California. I had also never heard of SoftCom, and had no recollection of using them in the past. The other red flag for me is that I use my Discover Business Credit Card for all my business needs, not my personal debit card.

I called my bank, USAA, and inquired about the pending transaction. They were great. In the matter of a few minutes the representative was able to determine there had been two charges - one in June and one last night. Somehow I missed the June charge. After the customer service rep and I discussed the issue for a few minutes, we determined it was most likely fraud. I was transferred to USAA’s fraud department and they handled the situation in a few minutes.

Problem resolved on my end. My card was canceled, a new one was sent to me, and I was informed I would receive a credit for both charges. I asked how the situation would be handled and they informed me they do a charge back with the bank involved to collect the money.

Now to find out what my card has been used for. My curiosity got the best of me and I went back to the SoftCom site and I noticed a phone number, which I decided to call. At this point my debit card was already canceled, so what did I have to lose?

Their customer service rep asked me a few questions, and after I explained the situation, he asked for the first 2 digits of my card number and my last 2 digits to find the account being funded by the card. That didn’t narrow it down enough so I gave him the last 4 digits and he said, “OK, I’ve got your account right here. Roger Williams, right?” Wrong!

He read off the domain name and I typed it into Google. It was filled out in some Eastern European language that I am not familiar with. It obviously wasn’t mine.

The rep was really cool about the situation and said he would flag the site as fraudulent. Within minutes, the site was completely gone.

I was lucky! The entire process took about 20 minutes due to great customer service on both ends. I admit that I was lucky though. I won’t be out any money, and the thieves only made two small transactions (both in the low $20’s). Had they withdrawn more money, they probably could have made me overdraft my account. Of course, I probably would have noticed it more quickly then!

Here is a story about how a stolen debit card ruined a vacation. Thankfully, Glblguy was able to make it home safely. This event lead him to write about what to do when your debit card gets stolen.

How did they get my number? I honestly have no clue. For a couple years I used my ATM/Debit card as my primary means of payment, but I rarely use it anymore. I now prefer to use cash back credit cards - my current card of choice is the Chase Freedom Card (review).

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In this e-mail example, recipients were advised to go to a link and enter their identifying information that would normally be on their tax form, (i.e., name, address, DOB, SSN, etc.) in order to process their refund request. This email is BOGUS. The IRS never sends e-mails requesting personal information; they always send letters advising the individual of a pending problem. 

These scams always turn up with renewed force during tax season, when many recipients act without thinking. Never enter your identifying information into a website without understanding exactly why you are doing it and where the information is going. For these types of e-mails, it is best to NEVER click on the link in the e-mail. Instead, type the url directly into the web address bar in your browser.

From the IRS website:

Phishing. Phishing is a technique used by identity thieves to acquire personal financial data in order to gain access to the financial accounts of unsuspecting consumers, run up charges on their credit cards or apply for new loans in their names. These Internet-based criminals pose as representatives of a financial institution and send out fictitious e-mail correspondence in an attempt to trick consumers into disclosing private information. Sometimes scammers pose as the IRS itself. In recent months, some taxpayers have received e-mails that appear to come from the IRS. A typical e-mail notifies a taxpayer of an outstanding refund and urges the taxpayer to click on a hyperlink and visit an official-looking Web site. The Web site then solicits a social security and credit card number. In a variation of this scheme, criminals have used e-mail to announce to unsuspecting taxpayers they are “under audit” and could make things right by divulging selected private financial information. Taxpayers should take note: The IRS does not use e-mail to initiate contact with taxpayers about issues related to their accounts. If a taxpayer has any doubt whether a contact from the IRS is authentic, the taxpayer should call 1-800-829-1040 to confirm it. 

The IRS also gives information on how to report suspected tax fraud activity.

Be vigilant. Protect yourself against computer fraud.

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Here are things you can do to avoid charity scams:

Investigate the charity if you are unfamiliar with it. If you have never heard of the charity, ask for some literature. A legitimate charity will be more than happy to share information about their cause with you. If the charity’s representatives do everything they can to avoid giving you literature, change the subject, or give you an unsatisfactory response, consider donating elsewhere.

Be wary of phone calls soliciting donations. A common method for scamming people is phone call solicitations. While many phone calls may originate from legitimate charities, there are a vast number that are outright scams.

Another thing to be aware of is charities that use phone call solicitations to collect money for firefighters, policemen, and veterans associations. These charities often make an arrangement with a local law enforcement or firefighters group to solicit funds on their behalf, in exchange for permission to make phone calls in the local area and use their name when soliciting funds. Unfortunately, in many of these cases only a small portion of the funds actually go to the respective police or firefighters organization. They claim to ”support” a good cause, but usually end up supporting themselves.

Some of these “charitable organizations” have no ties with any of these groups at all, and use misleading organizational names in order to trick people into giving. If it sounds official, it must be official, right? Not always - do your research!

Placing your number on the Do Not Call List can help reduce the number of telemarketer phone calls you receive, but it will not stop registered charities from calling you. You will have to specifically ask them to remove your number after they call you. One other note - once you give money to one of these organizations, they will share your information with others and you will get repeated phone calls from the original group and others!

Think twice before mailing off a check. Mail solicitations are another common means for scamming people. Many “charities” send out personalized address labels, stickers, calendars, or other small items to entice people into giving to them. These are often accompanied with a form that is pre-populated with your personal information and lists ”suggested donations.”

Remember, you are not obligated to give anything to them, especially when they send you something unsolicited. And if you give something to them, they will have your information, and you will likely receive many more of these solicitations in the future

Just say no to high pressure sales tactics. Charity organizations will be happy whenever you give them money to goods. If they pressure you to give right now, then they may not be legitimate. You should never be under any pressure to give your money to a charity. If they persist - walk away.

Money Mismanagement. Even legitimate charities may not manage their money well. Before giving money to a charity, try to determine how much of the funds they raise go toward certain costs such as overhead, fundraising and administrative costs and how much of their money goes toward delivering their charitable services. Investigate the charity - if less than 75% of their money goes toward charitable causes, consider donating elsewhere.

Protect yourself and give where you can make a difference

Charities are wonderful things and make our world a better place, but you owe it to yourself and others to protect yourself from scams and give money where it will be used properly, and for the right cause.

Note: These solicitation methods are used by both legitimate charities and charitable scams. You should always research any organization before sending them money.

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Well, aside from ethical considerations, there is a lot at stake with counterfeit goods. You need to consider the quality of the item, who is making the item (child labor anyone?), where the money goes (organized crime or terrorists?), and most importantly, the safety of the item. Many counterfeit electronics and batteries have been known to explode or catch fire, which can be particularly dangerous. Counterfeit pills, medicines, and toothpaste can also be extremely harmful.

Here is a guide to help you avoid unknowingly purchasing counterfeit goods:

Buy from a reputable source:

Very few counterfeit products reach the shelves of well established retailers. Buying from established retail outlets also provides something counterfeiters never will – a money back guarantee! Another thing to consider – many designer labels only sell their items through their own stores and outlets, and they will never sell via another store or vendor - especially not on a street corner!

Use caution when buying on-line:

Be sure to check the reputation of the store you are purchasing the item from. Another option is to look for the Buy Safe logo, which can provide guaranteed on-line transactions. The Better Business Bureau is not always the best logo to look for, because the BBB does not actually guarantee anything. Be particularly careful when buying on-line through a 3rd party vendor such as on an auction based website. These virtual stores are rarely guaranteed and you may find it impossible to get your money back.

This video gives more information about how to protect yourself when making on-line purchases: (please click through if you are reading via a feedreader)

Inspect the item:

Does the item look like it is good quality? Are the words and logos on the labels correctly spelled or sewn on properly? Are the zippers and stiching high quality? Is the item actually leather, or does it appear or feel fake? These can be tell-tale signs that the item is counterfeit.

Is the deal too good to be true?

C’mon, do you really think someone will sell you a $2,000 handbag for $40? Of course they wouldn’t! But what if they offer it to you for $200? Then you know one of two things – it is either A) stolen, or B) fake. Either way, it is not a good purchase for you! Be careful when judging by price alone. Price is not always an indicator of fake goods as criminals sometimes charge high dollar amounts for very good counterfeits.

Are you being pressured or persuaded into buying?

If so, walk away. People who sell the genuine items will almost always be able to sell them, and are under little pressure to make a sale. They will almost never force an item on you or pressure you to buy it. If there is a pressure tactic involved, chances are the item is stolen or a fake.

Be safe when purchasing products. Following these tips will not guarantee every item you purchase is 100% authentic, but it will greatly enhance the odds against being swindled. Above all, exercise caution and good judgment and hopefully you can avoid spending your hard earned dollars on… junk.

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Well, today I had two PayPal e-mails in my Spam folder, one was legit, and the other was not. The legitimate e-mail was for a payment received, the phishing e-mail was a “Receipt for Your Payment” that I never made. That is what they are counting on. They want you to contest the payment by scrolling down within the e-mail where there is a link titled “Dispute Transaction.” Next to it are the words “Encrypted Link.”

I don’t know for sure, but my guess is the link takes you to a site that looks like PayPal, but has a different URL. There the log-in is designed to harvest your information, probably by giving you an error screen and a message to try back later. By then, your log-in information is long gone and they will sign into your PayPal account with your information and send the contents of your account to their designated bank. Gone. All of it.

At first glance, the e-mail looked legitimate based on the layout, color scheme/pictures, transaction numbers, dollar value, and links. However, upon closer inspection of the details and language of the e-mail, I decided I needed to investigate further. Instead of clicking on any of the links within the e-mail, I logged on to my PayPal account in a separate window. There was no pending transaction for my account. This confirmed my suspicions.

Don’t fall for this scam. If you ever have any doubts, don’t click on any links within the e-mail. Open the website in question in a different window and investigate on your own. That is the safest way to handle it… And you can never be too safe!

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Of course, most people state they have never received a jury summons, and the “jury coordinator” asks to verify their name, address, birth date, and Social Security Number so they can cancel the arrest warrant that has been issued in their name. They may also ask to verify credit card numbers.

This scam works on intimidation by threatening people with a fictitious arrest warrant. Don’t fall for it! The court system will not ask you for your personal information. If you receive a call like this, ask them for a phone number where you can call them back. Then verify that information is the same as your local court.

If you receive a similar call, contact your local police station, and the FBI.

This scam has been verified by the FBI. Be careful folks, there are a lot of people out there trying to separate you from your hard earned money.

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The current scam involves a company that uses a computer program to generate bank account and routing numbers. They automatically deposit $.01 into each randomly generated account. The thieves then know that each accepted transaction is a valid account which they then make withdrawals from. One of the current thieves perpetrating this fraud calls itself Equity First (see Note at bottom of page). The withdrawals they have made are all $124.90, and seem to happen near the beginning of the month. They usually tap each account once and move on, but they sometimes hit accounts multiple times.

Because these are randomly generated account numbers (I’m sure they have an accurate listing of valid bank routing numbers, which is pretty much public information) I’m not sure what defense most people have against this. This is not your normal phishing scam or identity theft.

The best defense is to regularly monitor your accounts and be aware of any recent deposits and withdrawals that you do not expect or from companies you are unfamiliar with. Most banks have an on-line guarantee, so if you spot this sort of activity and promptly report it, you may not actually lose your money permanently. However, thieves will have a valid account and routing number, so you would likely have to change your account within your bank. It’s a hassle, but well worth protecting your assets!

Note: There is a company called Equity 1st Mortgage based in Wilmington North Carolina, and only licensed to do business in NC. This is not the company perpetrating this scam, and the scam seems to be focused outside of NC. Equity 1st has received well over 100 phone calls in regard to this scam and advises people to contact their bank for further action.

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Kudos to USAA for promptly informing their customers about this scam and offering additional tips and advice on how to avoid other scams and on-line predators.

Remember, a bank is never going to ask you to confirm your account information via e-mail. If you have received a phishing e-mail, or have received any other questionable correspondence regarding your account, contact your bank immediately.

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The Justice Department stated these specific franchises have defrauded the government of more than $70 million. Some of the allegations of fraud include false W-2 forms, fraudulant deductions and fuel-tax credits, and false claims for for the earned-income tax credit.

The allegations state that Sohail and the other defendants purposefully and defrauded the government on a massive scale. The Justice Department also alleges the business environment at these franchises encouraged fraud and the filing of questionable forms and documents. Some employees also allegedly received kickbacks for perpetrating this fraud.

The article did not specify the four states by name, but it mentioned that suits had been filed in the federal courts in Chicago, Atlanta, Detroit, and Raleigh, NC. So I assume the states are Illinois, Georiga, Michigan and North Carolina.

So what does this all mean? Well, it seems as though this is localized to only 125 franchises and does not mean that Jackson Hewitt as a company is committing this fraud. It appears as though these particular franchises were facilitating fraud commited by individual tax payers, and padding returns to increase refunds. I would assume that it also means that if you did business at any of these franchises, that your tax return may have a higher chance of being audited.

What should you do if you believe your tax return was completed at one of these franchises? I would highly recommend thoroughly going back over your taxes or paying a professional accountant to do so for you. It would be money well spent. If you find anything suspicious, I would recommend contacting a tax professional or lawyer for specific advice.

What should you do if you committed the fraud? Shame on you. Turn yourself in and hope the government is in a lenient mood.

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In Part I, I covered the sections ‘What is the SEC,’ ‘Why Invest?’ ‘Where to Begin,’ ‘Investment Choices,’ and ‘What Investments are Right for Me?’

In Part II of the series I cover the sections ‘What to Watch For,’ What to do Before Investing,’ ‘What to do After Investing,’ and ‘Types of Scams.’

What to Watch For

• Brokers are salespeople (this does not mean though that they are bad)
• Beware of the benevolent stranger (unsolicited advice)
• If it sounds too good, it is!
• Be skeptical of
  • Advice from the media
  • Penny stocks (shares priced less than $5 each)
  • Insider tips (they are illegal!)
  • Promises of spectacular profits or guaranteed returns
  • Testimonials (such as on TV, in print or on the Internet)
  • Unsolicited Phone calls
  • Forecasted Future Earnings
• General tips for financial security:
  • Don’t give personal info to a person/company you do not know
  • Avoid unregistered securities
  • Avoid Phishing scams
  • Keep all your transaction documents
• Red Flags:
  • Membership fees to invest (this does not include minimums to open accounts)
  • Suspiciously high price or fees
  • Too good to be true
  • Bonuses to recruit others
  • Request to send money to the individual broker/agent, not the company
  • Bait and switch (an offer to invest in one opportunity, then changing the opportunity/offer at the last minute. e.g. ‘oh we just ran out of this, but I have something just as good or better!’ If it were better, wouldn’t they offer you that opportunity first?)

Before Investing

• Get everything in writing and READ it!
• Understand the investment. Warren Buffett always maintains that he does not invest in technology stocks because he only invests in things he understands. If this principle is good enough for the world’s greatest investor, it should be good enough for anyone!
• No question is too simple. (It’s your money!)
• Don’t make emotional investment decisions
• Don’t be pressured into buying
• Read all forms before signing them!
• Never sign incomplete forms!

After Investing

• Watch for unauthorized trading and churning within you investments/accounts
• Be aware of unsuitable investments
• Watch for delayed account transfers
• Do not accept account statements directly from your broker (they should come directly from the institution; if your broker insists only he has this information, it is a possible red flag that the information is false)
• Report problems directly to the SEC

Types of Scams

• Ponzi Schemes
• Pyramid Schemes
• Affinity Fraud
• Telephone/Internet solicitations
  • Here they showed clip from Boiler Room when Giovanni Ribisi’s character cold calls a guy at work and talks him into buying stocks.
  • Another telephone scam: voice message left for the wrong person, and they leave ‘insider trading’ information. This is fraud aimed at pumping a stock price and then dumping it. The fraud is pulled off by using internet phone services where they can change the area code to represent any local area they want (to offset people’s reliance on caller ID).
  • Commissioner Atkins himself said he has been cold called about investments at his desk while working as the commissioner of the SEC!
• Bottome line - Never buy from someone you do not know and never buy anything without seeing the investment plan in writing first.

Remember, there are risks associated with all types of investing, from losing your money through loss of value in the stock market to not keeping up with inflation. It is your job to determine the associated risks and determine the amount of risk you should take.

*Disclaimer: This post is based upon handwritten notes and my memory from the seminar. This should not be interpreted to represent the official stance of the SEC. Please see their website for their official views.

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