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Scam artists flourish in the recession

Most scam artists use the Internet to implement their schemes.


Tess Vigeland: The Internet security firm Panda Labs recently released a list of the biggest scams of the last decade. Those e-mails from Nigeria topped the rankings. So did the beautiful young girl from Russia who needs money for travel expenses to America. And then there are the fake job offers that convince you to give over your bank account details. In this Great Recession, it is easier than ever for desperate folks to fall for these ploys.

Sheryl Harris writes about scams, scammers and the people they scam for the Cleveland Plain Dealer. And I asked her how it is that in 2010 anybody still holds out some belief that these tricks are real.

Sheryl Harris: The fact is there are some really low-hanging kind of scams that are obvious kinds of scams.

Vigeland: The Nigerian banker. Avoid him at all possible costs.

Harris: The Nigerian banker, we've all heard of the Nigerian banker, but the fact is, the way these scams work, the way they're packaged, can be much more sophisticated.

Vigeland: Can you give us an example of that?

Harris: This is from one of my readers. She had a house and she was letting out a room. She heard from a woman who said she was in London. She said, "Oh, I'm coming to school in Cleveland. This room sounds perfect for me." There was a lot of back-and-forth e-mails. And the girl sent a deposit check for the deposit and the first few months of rent. And shortly after that, the girl contacted her back and said, "My father has been in a terrible accident. I can't come to school anymore. I need that money back to help take care of him. Please keep the deposit. Please send me back my rent money." Well, what kind of human can hear a plea like that? And not do it?

Vigeland: Of course.

Harris: And lo and behold, the check turned out to be fake. All of these scams have in common that you get a check and you're asked to deposit it. Any ordinary person thinks, when that money shows up in your bank account the check has cleared. That is not the case. What happens is, the bank is responsible to get you your money within a certain amount of time, the money from your checks that you deposit. It meant, they're coming up against their deadlines, so they're making that money available to you. When they find out that check is counterfeit, they take the money back out of your account.

Vigeland: What kind of time frame are we talking about then? I mean, how long should you wait before finding out that that check actually did clear and was a valid check?

Harris: Wait three weeks, wait four weeks. Wait a month. Sit on it. You have to make sure that you're going to be OK at the end of this.

Vigeland: I understand that also that this is not just a cautionary tale for individuals, but corporations can get caught up in these kinds of scams.

Harris: Yes, they can and there are hundreds of law firms across the country.

Vigeland: Law firms?

Harris: You get an e-mail from Asia and it says, "We're a big company here, we do a lot of business with companies in the United States and some of them are not paying us. So we would like to hire your firm to represent our interests there, collect our money." That's a very typical scenario for a lot of different law firms. But, they'll contact the law firm again and say, "You know, one of the companies has actually agreed to go ahead and issue us a check, and since you're handling our interests there anyway, we're going to have them send it to you. You deduct your retainer, just wire us the rest at this bank." And I'm not talking a little money either. I'm talking about $200,000, $300,000, half-a-million dollars. These are huge scams.

Vigeland: But it is the exact same scam as the woman with the sick father.

Harris: It's exactly. It's got the same markers. It's the e-mail, it's from overseas. It's got a check attached, it's got this request that you wire the money back. Those four elements are the same in all of these.

Vigeland: I want to ask you real quickly about another common scam that happens, the work-at-home schemes. You'll see fliers on telephone poles, you'll see it advertised on the Internet and you think, "You know what, it sounds easy, I need some money right now so I'm going to go ahead and do it." What are those?

Harris: A lot of those are accounts processing scams.

Vigeland: What does that mean?

Harris: It means the old check scam that we just talked about. It's the, they're being asked to become an agent of this overseas company in the United States, set up a bank account, receive checks from all over, deposit those and then wire the proceeds over after they deduct their pay.

Vigeland: It sounds like I can't trust anybody.

Harris: You certainly have to be cautious about who you trust.

Vigeland: Sheryl Harris is the consumer columnist for the Cleveland Plain Dealer. Thanks so much for coming in.

Harris: Sure thing, thank you so much.


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