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Fraud Investigations: Investigating Scams, Schemes, and Deception
In 2020, consumers lost an estimated $16 billion to online fraud. This article provides an overview of fraud investigations related to various frauds, scams, and schemes used by criminals to deceive unsuspecting people into revealing personal information. Although there are many different types of scams, this article covers general fraudulent emails, jury duty scams, lottery and inheritance schemes, relationship fraud and secret shopper offers. The ultimate goal of most of these scams is identity theft.
What is Fraud?
In criminal law, fraud is the crime or offense of deliberately deceiving another in order to damage them – usually, to obtain property or services from him or her unjustly. Fraud can be committed through many methods, including mail, wire, phone, and internet fraud. Fraud, in addition to being a criminal act, is also a type of civil law violation known as a tort. A tort is a civil wrong for which the law provides a remedy.
A civil fraud typically involves the act of making a false representation of a fact susceptible of actual knowledge which is relied upon by another person, to that person’s detriment.
How to Deal With Fraudulent Emails
If you receive an email that is clearly fraudulent, exercise immediate caution. Emails of this type are designed to get you to provide personal information such as your bank account number, routing number, social security number, birth date, etc. The information obtained is then used to secure a credit card in your name, or draft a payment from your checking or savings account. Report it to your internet service provider and to your email hosting provider, then add to your spam filter and delete the original message.
Under no circumstances should you respond to the message and definitely do not provide any information requested. Fraud email messages of this nature can often be very convincing, tempting you to respond. It is in your best interest to simply report it, delete and block so you won’t receive this type of junk in the future.
Jury Duty and Juror Schemes
Most people take a court summons for jury duty very seriously. When most citizens receive a notice to report for duty, they take the day off work or school and head to the courthouse. However, enough people skip out on their civic duty, that a new and ominous kind of fraud has surfaced. In what is known as a “jury duty scam”, the fraudulent caller claims to be a jury coordinator or another officer of the court.
If you protest that you never received a summons for jury duty, the scammer asks for personally identifiable information so they can check to see if you have an arrest warrant. Usually, the scam artist asks for your Social Security number and date of birth so he or she can verify the information and cancel the arrest warrant. Once the caller has this information, they have all they need to begin the process of stealing your identity. They can apply for credit cards, loans, open bank accounts and more.
The jury duty fraud has been reported so far in 11 states, including Oklahoma, Illinois, and Colorado. This type of scheme is particularly insidious because they use intimidation over the phone to try to bully people into giving information by pretending they are with the court system.
The Federal Bureau of Investigation and the federal court system have issued nationwide alerts on their web sites, warning consumers about the fraud. Beware and remember, never give out personally identifiable information over the phone.
Fraud Investigations: Lottery and Inheritance Scams
In recent years, lottery and inheritance scams have become a popular form of fraud. Scam artists and fraudsters contact unsuspecting people and inform them that they have won a large sum of the money, either in a lottery or in an inheritance from a relative.
Quite often, the schemers are able to produce documents that appear to be legitimate, such as official checks, wills, award letters or contracts. Victims can be easily fooled by the convincing appearance of the communications and the promise of receiving large sums of money. Here are a few tips to share with your family, friends, and clients to help you avoid becoming a victim of a lottery or insurance scam:
- Always be very skeptical of any unsolicited letters, calls, or emails informing you that you’ve won a lottery. Lotteries simply don’t work that way. Generally, you have to buy a ticket or submit an entry to win. So, if you didn’t play a lottery, you didn’t win.
- Ignore any communications from foreign lotteries, paying attention to the address or phone number from the notice
- Legitimate lotteries don’t require winners to pay fees to collect winnings or to provide personally identifiable information such as birth date or social security numbers. Once they ask for this information hang up and discontinue all communications.
- Check with relatives about recent deaths in your family. Confirm the person is a member of your family, and they have in fact passed away, before responding. Even then, be suspicious.
- Never give out personal or financial information to anyone over the Internet or telephone
Follow these simple steps to help keep you and your family safe from these types of fraudulent scams.
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Relationship and Dating Scams and Schemes: Con Artist Specialties
The internet provides anyone with the opportunity to establish both business and personal relationships with people from around the world. Unfortunately, fraudsters and scam artists often exploit this opportunity by preying on individuals who frequent internet chat rooms, online dating services, social networking sites, and other online locations. As a result, relationship scams are on the rise.
The schemers establish an online relationship with a potential victim by requesting emotional support for some personal event. By doing this, the scammer slowly cultivates a relationship that they hope will translate into significant goodwill and ultimately into financial gain. The relationship can continue for weeks, months, and sometimes even years. After a successful online courtship, the scammer may ask the victim to assist them financially in order to remedy some traumatic situation such as the loss of a loved one, pending loss of a home, loss of their job, or other emergencies. Some of the most common reasons “angles” include:
- The individual or a family member needs medical attention
- The individual is a victim of a violent crime and they’ve been robbed of their belongings
- The individual would like to visit but needs funding for airline tickets, visas, or excessive customs costs.
Whatever the situation, the scammer asks the victim for money or requests for them to send traveler’s checks, money orders, or some other financial item to negotiate. They instruct the victim to wire the funds to a third party such as a doctor, or hotel manager. It’s likely that any proposed transaction will involve counterfeit or altered items. Here are some tips to avoid relationship scheme and internet dating fraud:
- Be cautious when meeting people on the internet. Remember, they can pretend to be someone they aren’t.
- Be suspicious by default. Make others prove to you that they are a real individual, and they are who they say they are.
- Do not negotiate items on behalf of someone else
- Do not send money by money transfer to someone you do not know.
- Once someone asks for money, be suspicious of their behavior and consider every move you make very carefully.
- Never give out any personally identifiable information such as your address, birth date, phone number, or social security number. Make it your goal to give them nothing.
Following these simple steps will help you avoid becoming a victim of a relationship scam. If you need help, hire a private investigator that specializes in fraud investigations.
Secret Shopper Offer Scams
If you receive emails about becoming a “secret shopper”, please be aware that it is fraudulent and is part of a worldwide scheme, but focused mainly in the United States. Fraudulent secret shopper scams of this type are designed to get you to provide personal information such as your bank account number, routing number, social security number, birth date, etc. The information obtained is used to secure a credit card in your name, or draft a payment from your checking account. If you receive this email, please report it to your internet service provider and to your email hosting provider.
List of Fraud Investigation Resources
Following are websites that provide information on various types of business, computer, and internet fraud investigations. Many of the websites provide tips and suggestions for preventing and protecting yourself from fraud and allow you to file a formal complaint.
Federal Trade Commission – File a complaint with the Federal Trade Commission if you suspect you are a victim of identity theft, scams and ripoffs, unwanted telemarketing texts and SPAM and others.
Financial Crimes Enforcement Network – FinCen works to safeguard the financial system from illicit use, combats money laundering and promote national security through the collection, analysis, and dissemination of financial intelligence and strategic use of financial authorities.
Internet Crime Complaint Center – The Internet Crime Complaint Center (IC3) is a partnership between the Federal Bureau of Investigation (FBI) and the National White Collar Crime Center (NW3C).IC3 accepts online Internet crime complaints from either the person who believes they were defrauded or from a third party to the complainant.
National Consumer’s League Internet Fraud Watch – Now Fraud.org, is dedicated to consumer education and advocacy related to Internet and telemarketing fraud prevention
National White Collar Crime Center – Provides a nationwide support system for agencies involved in the prevention, investigation, and prosecution of economic and high-tech crimes and to support and partner with other appropriate entities in addressing homeland security initiatives, as they relate to economic and high-tech crimes.
What Private Investigators Need to Know
Private investigators are hired to uncover information on a broad range of topics. A private investigator with strong skills in surveillance may be hired to follow subjects who may be involved with insurance scams. Other private investigators with forensic accounting skills may be hired to uncover embezzlement schemes or employee theft.
Questions and Comments
If you have any questions about fraud investigations, please post a comment below. Also, learn more about other Frauds, Scams, and Schemes.
It seems that the regulators and law enforcement agencies across the world are finally becoming aware of the risks of trading in binary options. Within just a day, two more entities – the Monetary Authority of Singapore (MAS) and the US FBI have issued warnings against dealing with unregulated binary options platforms and brokers.
FXTM a regulated forex broker (regulated by CySEC, FCA and FSC), offering ECN trading on MT4 an MT5 platforms. Traders can start trading with as little as $10 and take advantage of tight fixed and variable spreads, flexible leverage and swap-free accounts.
XM is broker with great bonuses and promotions. Currently we are loving its $30 no deposit bonus and deposit bonus up to $5000. Add to this the fact that it’s EU-regulated and there’s nothing more you can ask for.
FXCM is one of the biggest forex brokers in the world, licensed and regulated on four continents. FXCM wins our admirations with its over 200,000 active live accounts and daily trading volumes of over $10 billion.
FxPro is a broker we are particularly keen on: it’s regulated in the UK, offers Metatrader 4 (MT4) and cTrader – where the spreads start at 0 pips, Level II Pricing and Full Market Depth. And the best part? With FxPro you get negative balance protection.
FBS is a broker with cool marketing and promotions. It runs an loyalty program, offers a $100 no-deposit bonus for all new clients outside EU willing to try out its services, and an FBS MasterCard is also available for faster deposits and withdrawals.
FxChoice is a IFSC regulated forex broker, serving clients from all over the world. It offers premium trading conditions, including high leverage, low spreads and no hedging, scalping and FIFO restrictions.
HotForex is a EU Regulated broker, offering wide variety of trading accounts, including Auto, Social and Zero spread accounts. The minimum intial deposit for a Micro account is only $50 and is combined with 1000:1 leverage – one of the highest in the industry.
More Forex Market News
Three Bulgarians and a German arrested for a в‚¬80M binary options scam
Dominic Raucht, Dimitar Moralijsky, Vasil Kostov and Alex Petrov have been detained in Sofia, Bulgaria, in connection to an 80 million Euro binary options scam, after a joint operation of the law enforcement authorities in Bulgaria, Germany, Austria and Serbia. Read more
Some major forex brokers cut leverage due to Coronavirus-induced volatility
Dukascopy, IG, Admiral Markets, and Oanda Japan have decided to lower the leverage levels for certain instruments in light of the increased market volatility created by the Covid-19 pandemic. You may read more details on the changes in their margin trading requirements below. Read more
CySEC relexes reporting rules for brokers amid corona outbreak
Because of the extraordinary situation in the wake of the corona virus outbreak the Cyprus Securities and Exchange Commission (CySEC) gave its brokers more time to report their annual volumes. The original deadline for submitting the reports was April 12. Read more
Sharp rise in corona virus scams
Coronavirus related fraud has increased by 400% in March, Manchester City Council reports, citing data from Action Fraud, which has received over 100 reports from victims who have lost nearly 1 million GBP. Read more
FCA eases reporting deadlines for regulated companies
In the wake of the coronavirus pandemic the Financial Conduct Authority (FCA) in the UK grants regulated firms additional 6 months to publish audited annual reports. The concern is that many companies may be pressured financially because of the increased market volatility. Read more
CFTC hinders leveraged crypto trading
In a new guideline published on Tuesday the Commodity Futures Trading Commission (CFTC) in the U.S. defined what an “actual delivery” of a digital asset means. Read more
Scammers use extortion e-mails threatening victims with coronavirus
Sophos, an IT security company reports of a new form of scam where criminals send extortion e-mails to victims, threatening to infect them and their families with coronavirus unless they pay 4000 USD in digital currencies. Read more
The Swedish Finansinspektionen warns against JTtrader
The Swedish Financial Supervisory Authority (Finansinspektionen or FI) warned against unregulated broker JTtrader on Monday. Read more
SEC charges former US senator with $4.3 million crypto scam
The United States Securities and Exchange Commission (SEC) has filed a complaint against David Schmidt, a former Republican state senator, as well as two other people for their role in the alleged $4.3 million crypto scam “Meta 1 Coin”. Read more
ASIC changes its priorities amid CoVID outbreak
The Australian Securities and Markets Authority (ASIC) will suspend some of its supervisory activities that are not “time critical”, as the regulator focuses on its coronavirus response. Read more
The opinion of experts about binary options — all the truth
You still doubt that you can earn with binary options? Then listen to the experts, who earn money in this market. Believe me, these are the real reviews of Investlb.com readers. We do not promote a specific broker, the platform or any paid services. We want to convince you that it is really possible to earn. And let it will take several months of training, each one has the opportunity to earn.
Binary options: fraud or the possibility to earn? The opinion of experts
1. Oleg. Private trader, an expert with experience of more than 2 years
“Like many people, I considered that binary options is fraud. I was interested in these questions:
When working in a Bank, we often discussed the possibility of additional earnings, and at some moment there was a sense of excitement. I watched the video training, chose the well-known broker and… Literally in 3 days I lost the entire deposit on a demo account. I even took advantage of the free signals of broker to open trade. And this moment made me think that options trading is a kind of art that can give new emotions and money.
This case made me rethink the binary options. I reviewed dozens of videos with strategies, learned how to do diaries, dealing with liquidity providers and market makers, have studied the formula of technical tools, I began to understand the world economy. Only then I felt that I actually got a new profession. Now options for me is 50% of all my earnings. My advice for beginners is never too late to start. You only need to have desire and believe in success, perseverance and patience.”
2. Vladislav, manager of investment accounts in Forex, specialist with 13 years of experience
“Sorry for being rude, but the opinion that options are for suckers, I believe only suckers’ opinion! In the world of thousands of traders, dozens of exchanges, there is a billion annual turnover and the industry with history of more than a century. It physically can’t be a fraud. When a novice makes several attempts, makes a mistake and gives up — he just doesn’t want to work. But it is not the fault of the broker or industry. Those who want to become a professional, tips:
watch the video of famous traders, but take everything with a grain of salt. Communicate on forums where they can express their opinion.”
3. Sergey, the novice trader
“Every person has the opportunity to earn on the options, but only 10% use it, the other 90% prefer to give up. But even the remaining 10% are afraid to make real financial stake. Since I opened demo trading account it took 3.5 months before I dared once to do a real forecast for $ 3. Demo and real is totally different feeling. A renowned expert expressed the opinion that the new experience is worth to get just for the sake of new emotions. Emotions are our life. My opinion — you need not to be afraid to try. Hundreds of people get profit and withdraw money, I managed too. Believe in yourself!”
Alexandra, private trader, a specialist with experience of 1 year
“I never thought that binary options trading would become my main job. It all started with the fact that one of my friends suggested that I write a review of an economic article about the impact on quotes of the quarterly reports from companies. I’m an economist by education, worked in the enterprise. I wrote it. And it turned out so convincing that I found it so easy to earn money on predictions! I opened a demo account with the first broker and my predictions turned out to be successful.
To celebrate, I decided to fund my account $ 10 (not so much), made a prediction and was wrong. Made the forecast again and it was wrong as well. It has been almost a year since the first prediction and I came to the following conclusions:
For all who dare to plunge into this work, I sincerely wish good luck!”
5. Victor, a professional investor and a trader with experience of more than 15 years
“Before you tell that binary options is a fraud, ask yourself, what do you know about it and what you can do. You have already earned at least 100% of the initial deposit on a demo account? Have you worked with demo accounts of at least 3-5 brokerage companies? How much do you know about technical indicators and how to work with them? If not, then how can you judge what you don’t understand. And if you are ready to try yourself in binary options, then listen to my advice:
People earn on the options, but it’s the same profession, as a mechanic, plasterer, driver. At first it is difficult, then it becomes easier. And if you think that the broker won’t let to withdraw money, you are mistaken. He would not have built up such a large system of trade to get hold of 10 dollars.”
Summary. I think you noticed that experts are almost unanimous. Binary options is not a fraud, but not an easy money as many people think. For some people it is an extra money for someone — main profession. Here you can get big profit but you can lose it all. The view that options trading is for suckers, give those who have not invested in this job any time or effort and got the loss. To become a professional you need more than a year of training on a demo account, ongoing training, error analysis, selection of strategies and much more.
Best Binary Options Brokers 2020: