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Fraud Schemes

We're watching out.

We want our members to be aware of what's out there.

Security Alerts

ALERT: Better Business Bureau top senior scams (10.23.18)
By Myriam Digiovanni, FinancialFeed

According to the Better Business Bureau, seniors are the most targeted demographic for scams and fraud. They range from money transfer and cash for gift card requests, to being named a sweepstakes winner. Efforts particularly ramp up leading into the holidays.

  • Free trials: Often these pop-up online with promises of a “free trial” asking consumers to provide credit card information “simply to cover shipping fees.” Unfortunately, that leads to unsuspecting victims being charged for products that are part of a program they “enrolled” in. Trying to cancel is often a nightmare.
  • Charity scams: With so many natural disasters in 2018, who wouldn’t want to open their wallet to help? Retirees have available savings, big hearts and it can be hard to distinguish legitimate causes. Do your research and ask as many questions as possible. Research sites like give.org to see if a charity site is real. Don’t respond to charity solicitations on the phone until you do your homework.
  • Fake websites: Make sure the website is secure and legit. Scammers have gotten very sophisticated in creating sites that piggyback off the reputation and name of well-known companies. If it’s the first time you are buying from a particular website, check with BBB before sharing any credit card information.
  • Family emergency scams: The scammers claim to be calling on behalf of a family member who has been arrested or in an accident. They play on grandparents’ emotions to ask for money to be sent quickly. Don’t be quick to give any financial information or commitment over the phone. After hanging up, reach out to your loved ones to find out if the emergency actually happened.

ALERT: Fraud Trends to Avoid All Year Long (09.18.18)
By John Buzzard, Industry Fraud Specialist for CO-OP

  • Gift cards, secret shoppers and the allure of fake offers. This scam works as follows: consumers are drawn in by a phony e-mail or social media post to become a “secret shopper” in exchange for some form of financial gain. When a consumer agrees to participate, the fraudster seals the deal by delivering a very large counterfeit check. The criminal then asks the consumer to deposit the check and purchase gift cards with the funds – keeping a small portion of the proceeds as compensation for being the “secret shopper.” The victim here (a loose term, considering that most people will realize this is a scam!) is asked to e-mail photographs of the gift cards, front and back, so the criminal can use them immediately – before the counterfeit check has a chance to bounce.
  • Counterfeit money orders. Fake money orders are frequently used for online purchases from websites like Craigslist. The problem is that high-quality counterfeit money orders are hard to distinguish from the real thing.
  • Card cracking. This rip-off scheme typically victimizes our youth. A fraudster reaches out to a young person via social media and convinces the potential victim that they can both benefit by helping each other out – with the young account holder receiving a small sum – $100 or so – as compensation for cooperating with the fraudster. The victim then gives the criminal access to his or her online banking credentials, so the criminal can deposit counterfeit checks into the account. The fraudster also typically requires the usage of the account holder’s debit card and, in some cases, accompanies the co-conspirator to an ATM to perform withdrawals against the counterfeit checks that have been deposited.
  • Direct mail scams.  Bogus – but official-looking – letters are delivered every day to random consumers with stern requests for social security numbers and other personally identifiable information. Some of these letters are printed on what looks like big bank letterhead and, in all cases, there is at least one “official looking” hard-copy form that the consumer is asked to fill out and return.

Click here to read more.

ALERT: Mystery Shopper Scam (07.16.18)

  • It’s a new twist on the “fake check” scam: People across the country are receiving letters in the mail—accompanied by fat checks—inviting them to earn extra money as mystery shoppers. The letter invites you to become a paid mystery shopper in your area, and the letterhead and check appear to come from a legitimate U.S. company. The listed phone numbers, however, originate in Canada.
  • Here's how it works: the letter instructs you to deposit the check— for, say, $3,750—into your checking account, wire $3,150 using a company like Western Union or Money Gram, keep $300 as pay, take out $200 for wiring fees, and use $100 to purchase merchandise. Then you’re told to contact the person named in the letter for further instructions. Sounds like an easy way to make money, right? But if you deposit the check, you’ll get a notice from the bank that it bounced. And you’re left holding the bag for the $3,750.
  • Postal Inspectors advise that if you receive this offer, do NOT respond. Instead,report the incident to  Postal Inspectors at 1-877-876-2455 or Postal Inspectors online.

ALERT: IRS Tax Scam (02.20.18)

  • The IRS identified a new scam in which cybercriminals have stolen client data from tax professionals and filed fraudulent refunds using real taxpayer information, including bank account and routing information for direct deposit. The fraudster then contacts the taxpayer posing as an employee of a debt collection agency working on behalf of the IRS. They ask the taxpayer to take certain steps to return the refund, but actually the refund goes to the criminals.
  • IRS guidance to taxpayers who are victims asks them to contact the Automated Clearing House (ACH) department of the bank/financial institution where the direct deposit was received and have them return the refund to the IRS. The IRS also asks the taxpayers to call the agency toll-free at (800) 829-1040 (individual) or (800) 829-4933 (business) to explain why the direct deposit is being returned.
  • This newest scam also serves as a reminder to taxpayers that they should be alert to any unusual activity such as receiving a tax transcript or tax refund they did not request. Please review the Taxpayer Guide to Identity Theft.

ALERT: Equifax Data Breach (09.07.17)

  • Equifax announced a cybersecurity incident potentially impacting approximately 143 million U.S. consumers. Based on the company’s investigation, the unauthorized access occurred from mid-May through July 2017. The information accessed primarily includes names, Social Security numbers, birth dates, addresses and driver’s license numbers. In addition, credit card numbers for approximately 209,000 U.S. consumers, and certain dispute documents with personal identifying information for approximately 182,000 U.S. consumers, were accessed.
  • Equifax has a dedicated website that can help determine if you have been impacted as well as info about how to enroll in complimentary credit file monitoring and identity theft protection: www.equifaxsecurity2017.com
  • PLEASE NOTE: Members should be prepared to answer additional security questions when contacting the credit union. The security of your account(s) is of the utmost importance to us.
  • For more information about protecting your info and steps you can take, check out USACU's blog.

Fraud Terms

Some commonly used fraud terms:

  • Skimming.
    The theft of debit or credit card information usually done with fraudulent card readers.
  • Phishing.
    When a fraudster pretends to be a legitimate business or person and uses email or fake websites to steal your information.
  • Vishing.
    When a fraudster poses to be someone else over the phone to try to steal your information.
  • Smishing.
    Receiving unauthorized text messages to try to steal personal information.
  • Identity Theft.
    The stealing of personal data to commit fraud or deception.