Basics of Lottery, Fake Charities, and Bogus Brokerage Firms Online Scams - dummies

Basics of Lottery, Fake Charities, and Bogus Brokerage Firms Online Scams

By Ryan C. Williams

Sometimes it seems like everywhere you look there is a new scam for hackers to access your personal information and passwords online. Some of these scams come at us posing to be good things, such as charities.

You just won the lottery: Basics of the lottery scam

Here’s how this scam works: You receive a letter, fax, or e-mail claiming that you’ve won a large sum of money in an overseas lottery game. You probably didn’t know you even entered the lottery. The letter says that the lottery commission for whatever country’s lotto has tried unsuccessfully to contact you about your windfall.

To collect your winnings, you need to provide the lotto commission with your bank account information so that it can transfer the money to your account. Some of these scams have a form with the letter that asks for personal information such as your full name (including your middle name), birth date, address, occupation, marital status, and telephone number.

Some of the forms also ask for next-of-kin information, including first and last name, address, telephone number, and occupation. What a great way to solicit more victims. The form also features a bank transfer section that asks for your bank’s name, address, account numbers, routing number, and telephone number.

After you provide the information to the lotto commission, the only one who wins is the person who sent the letter. Imagine that! To avoid becoming a victim, don’t give out this information. Just discard the letter, e-mail, or fax.

These lottery scams have been successful because they play to the greed aspect of human nature. There’s no such thing as free money.

Basics of bogus charities

You’re watching TV, and the phone rings. You answer, and the person on the other end says that she’s from a charitable group soliciting donations. Be careful. This has been used as a ploy to get your credit card number and expiration date, or a personal check.

Legitimate charities use telephone solicitation for donations, but you can give to your favorite charity and still protect yourself. Many charities offer alternatives to making a donation over the phone. For instance, go online and look up the charity. The website will have all the contact information to make a donation.

Another variation on this theme is the disaster relief donation scam. An example of this scam occurred right after the September 11 tragedy. The thieves set up a bogus website and then sent a spam e-mail soliciting $25 credit card donations to help the victims’ families.

The e-mail had a link to the thief’s website, and the recipient clicked the link to enter the site to make a donation. The site asked, of course, for your credit card number and expiration date as well as your full name. Also, the site asked for your SSN under the guise that you can then claim the donation on your income tax as a deduction.

People who made the donation found themselves victims of identity theft. The perpetrators established new addresses and opened new accounts, using the names of the people who went to the site.

Other people were pressured into making on-the-spot donations over the phone, using the same tactics that the website thieves used to get personal information.

Don’t stop donating to charities — just don’t give out your personal information to strangers on the telephone. In most states, the charitable organizations must be registered with the state Attorney General, so check whether the charity is legitimate before you donate.

Basics of phony brokerage firms

In the phony brokerage-firm scam, the thieves set up a website using the name of an actual brokerage firm, but they use a different address. Then they craft and send a spam e-mail. The e-mail usually trumpets upcoming “hot” stock to entice you into visiting its website.

On the site, you provide your credit card number and other personal information to purchase the “stock.” At the time of this writing, it isn’t clear whether the scam is being perpetrated to garner personal information to use in further identity theft frauds or whether it’s collecting money for phony stocks.

In any event, don’t purchase stocks from unsolicited e-mails; it’s probably just a ruse to get your personal information, or it’s not a good tip anyway. If you’re interested in buying stock, contact one of the brokerage firms near you and set up a face-to-face meeting in its office.