iPhone Scams: ScamBusters.org Predicts the Top 7 iPhone Scams

Specific tips and advice to help you protect yourself from getting ripped off by iPhone scams

iPhone Scams Update #4: August 20, 2007

Here’s the first iPhone urban legend we’ve found: Man Surgically Alters Thumbs to Better Use His iPhone

A 28-year-old Colorado man found it difficult to manipulate his iPhone since his thumbs were very large. He believed he had a choice: change to a different device or “whittle” down his thumbs. The North Denver News describes whittling as a surgical procedure that “involved making a small incision into both thumbs and shaving down the bones, followed by careful muscular alteration and modification of the fingernails.”

Here’s a quote from the original hoax: “From my old Treo, to my Blackberry, to this new iPhone, I had a hard time hitting the right buttons, and I always lost those little styluses. Sure, the procedure was expensive, but when I think of all the time I save by being able to use modern handhelds so much faster, I really think the surgery will pay for itself in ten to fifteen years. And what it’s saving me in frustration — that’s priceless.”

http://northdenvernews.com/content/view/922/2/

Editor’s Note: The interesting thing is that many reporters and bloggers reported this story as true… It’s not. You can read why here.

http://northdenvernews.com/content/view/925/2/

The iPhone “Online Store” Scam

According to the Modesto Bee, in the second scam, “a bit of malicious software has begun circulating that targets consumers looking for the [iPhone]. The scam takes advantage of already infected computers by sending them a pop-up ad when users surf the Web to either Google or Yahoo. The pop-up ad links to a Web site to buy the iPhone, with an option to choose the color. That’s one sign the offer isn’t legit, because iPhones come in only one color. The site then asks consumers to send money by Western Union or MoneyGram for the iPhone.”

(There is actually a third party that does paint iPhones, but it’s unlikely that you’d save money by going to them directly, and we’ve seen no evidence that these iPhones were painted by this company.)

Of course, the iPhone never arrives, but the scammers make off with the loot, since neither Western Union nor MoneyGram offer any type of insurance or money-back guarantee.

Recommendation: You can easily avoid these scams by only purchasing an iPhone directly from Apple or AT&T, and keeping your PC security software — including firewall protections — updated.

iPhone Scams Update #3:

The biggest new iPhone scam warning relates to iPhone sales to people outside the US.

The iPhone is now only available within the US. However, many people in other countries want to buy iPhone NOW. The problem is that many scammers are targeting these people: with inflated prices, promises of hacks that the iPhone will work in their country, and iPhones that are never delivered. Buyer beware.

And according to one blog, “perhaps that more than 50% of 8GB iPhone auctions [on eBay] are eventually canceled by eBay security due to fraudulent buyers with hijacked accounts.” However, these numbers are improving according to the blog.

We’ll continue to keep you posted of new iPhone scams.

iPhone Scams Update #2:

Our iPhone scams predictions continue to be quite accurate. Here are a couple of more interesting additions:

iPhone viruses, Trojans and spyware, free iPhones, and fake iPhone websites and phishing scams: A Trojan was discovered over the weekend by Sunbelt Software Distribution Inc. According to ComputerWorld, “The Trojan horse, which has not yet been named by antivirus vendors, produces a pop-up when users on infected Windows PCs head to either Yahoo.com or Google.com. The pop-ups tout iPhone.com as ‘the only place to buy iPhone,’ and use the Apple logo and the actual price ($499) of the 4GB model to add weight to the offer.”

As the potential victim proceeds through the purchase process, one option (which shows the site is bogus) is to select color — the real iPhone currently comes in only one design and color. The buyer is then asked to send money via Western Union or MoneyGram, which is another telltale sign it’s a scam.

Secure Computing Corp. reported a spam email that tells potential victims they’ve won a free iPhone, and asks them to click on a link to claim their prize. The malicious destination site then looks for 10 ActiveX vulnerabilities in Windows and/or Internet Explorer, and if it finds any, attempts to get the victim to install rootkit software which allows the hackers to gain control of the victim’s computer and turn the PC into a spam bot.

Action: Make sure you install the latest anti-virus and anti-spyware software, and use a firewall. Realize you didn’t win a free iPhone. And, consider using Firefox as your browser.

eBay scams: According to ZDNet, eBay has placed “sensible (but ineffective) restrictions on iPhone sales.” Here are Adrian Kingsley-Hughes’ highlights:

  1. “Apple iPhone Pre-Sales are prohibited.”
  2. “Criteria for Apple iPhone Post-Launch Sales. In order to continue to ensure protection for our Community after these items are made available by the manufacturer, the following requirements have been put in place for the sale of the iPhone:
    - The listing must include a unique photograph of the item or items
    - Your User ID must be clearly displayed within the photograph (watermarks will not be accepted).
    - To ensure buyer protection, PayPal must be the only accepted form of payment.”

According to Bloomberg.com, “There’s a two- to four- week wait for customers who order online from Apple. The phone sold over the Internet for a premium through online auction service EBay Inc., with an average price of $705 and the highest at $12,500. People have sold about 4,500 iPhones through EBay since the debut.”

http://www.bloomberg.com/apps/news?pid=20601103&sid=a7A4BDWusr2U&refer=news

We’ll provide more updates as they become available.

iPhone Scams Update #1:

So far, our iPhone scams predictions seem quite accurate. We are seeing many of the scams listed below.

Here are a few interesting additions:

eBay scams: There are now 11,238 products listed when you do an eBay search for “iPhone.” And as we predicted, eBay is taking iPhone scams very seriously. According to CNN, “about 2,000 eBay security representatives are scheduled to be on the lookout this weekend for iPhone scams. But Cat Schwartz, the eBay executive in charge of electronic gadgets, acknowledged that she can’t do much about ill-fitting accessories.”

There is no need to buy iPhone accessories from unknown vendors. You can find some great iPhone accessories in the Apple and AT&T stores.

iPhone email addresses: According to TechBlog.com, “the.iphone.from.apple at gmail.com actually sold for a whopping $112.50 on eBay,” which they describe as “the worst iPhone email address ever.”

http://www.techeblog.com/index.php/tech-gadget/ebay-watch-the-worst-iphone-email-address-ever

Stupid Criminals story: Perhaps the most unusual stupid criminal story about the iPhone launch yesterday was that 9:25am (8.5 hours before the Apple iPhone launch) a man went after a microphone — rather than one of the very few iPhones given to reporters and being displayed — from reporter during a Fox News Channel interview with Steven Levy of Newsweek near an Apple store in New York. The theft was captured on video — you can see it here:

http://www.dailymotion.com/hotternews/video/x2esk5_fox-news

We’ll keep you updated as we hear more iPhone scams.

Here’s our original article on iPhone scams (which is turning out to be very accurate):

Apple’s iPhone is one of the most anticipated — and hyped — products ever. And with any huge product launch, the scammers come out in droves. So, if you want to make sure you don’t get ripped off, you’ve come to the right place.

What Will Be the Most Common iPhone Scams?

Here are our predictions for the top 7 iPhone scams. (We’ll update this page after the iPhone launches on Friday, June 29, 2007 at 6:00 pm.)

1. iPhone eBay scams:

As we write the first version of this article on Wednesday evening, two full days before the launch of the iPhone, there are already 1,796 products listed when you do an eBay search for “iPhone.”

Most of these listings are for cases, screen protectors, cables and other accessories. (Although most of these products are likely not scams, we personally would not buy an iPhone accessory from a company that has never actually seen or touched an iPhone.)

There are some auctions for brand new Apple iPhones (2 days before they go on sale, and sometimes with incorrect information).

We found that eBay was very good about removing these iPhone listings during the pre-launch. However, after the iPhone starts shipping, it will be MUCH more difficult to know which auctions are real and which are bogus.

There are also auctions for email addresses, some with bids around $50, like “apple.iphone.outlet@gmail.com.” Although you will probably actually get these email addresses if you win the auction, they typically are worthless.

Our recommendation: Think hard before you buy an iPhone on eBay. Instead, if you want to buy online, order directly from the Apple store online. Ground shipping is free and you aren’t ordering from an unknown person.

Since no one will be discounting iPhones to start (and they are only available from Apple online, Apple retail stores and AT&T stores), it’s hard to think of a compelling reason to buy on eBay or other online auction sites.

You can read more about eBay and other online auction scams here:

http://www.scambusters.org/Scambusters43.html

http://www.scambusters.org/onlineauctions.html

2. iPhone standing in line scams:

On sites like Craig’s List, as well as eBay, you can find many offers from people willing to spend the day standing in line for you — for a fee. The assumption behind these offers is that most Apple and AT&T stores will run out of iPhones, so those at the beginning of the line (who waited overnight or all day long on Friday) will be the ones to get the coveted iPhones.

Waiting in line services vary widely in price — they are currently going for up to $500 in the San Francisco area (several with pictures of people already in line).

Our recommendation: If you choose to hire someone to stand in line for you, hire someone you know and can trust. If that’s not possible, we recommend you not pre-pay. After all, then there is no guarantee that the person you hire will actually stand in line for you.

Instead, agree to pay them when you swap places with them in line around 5:30 or 6:00pm, or use an escrow service to hold your payment.

Also, be sure to have a clear agreement with the person standing in line for you. For example, what happens if they stand in line as promised, but you still don’t get an iPhone because too many people were ahead of them? Think about what could go wrong, and specify what happens in advance in your agreement.

If you decide to stand in line, it seems that iPhone sales are limited to ‘one per person’ at AT&T stores, and ‘two per person’ at Apple stores. So, don’t believe people at the front of the line at AT&T stores who claim they’ll buy an extra iPhone for you, as well as the one for themselves.

Finally, watch out for pickpockets. We imagine there will be many of them, especially targeting those people who line up overnight.

3. iPhone scalper scams:

We expect that a lot of people will spend the day in line, buy an iPhone, and then try to sell it at a higher price. As we mentioned, some people will do this online at sites like eBay; others will sell their iPhones right outside the Apple and AT&T stores.

Our recommendation: If you choose to pay the scalper premium (which we don’t recommend), make sure you at least get the phone. Some scammers have been known to take the product out of the box and simply sell the empty box! So open the box and make sure the iPhone you expect to get is actually inside the packaging. Also, scalping may even be illegal depending on where you are located.

4. Free iPhones:

A few of these offers will no doubt be legitimate — but be VERY careful.

We’ve written about scams that use hot items (like designer handbags and plasma TVs) as lures to get email addresses and detailed personal information:

http://www.scambusters.org/designerhandbags.html

Since the iPhone will be such a very hot product, we’re already seeing this kind of scam.

Basically, to get the iPhone, here is what one website says you need to do:

“To receive the gift for this promotion you must: 1) register with valid information; 2) complete the user survey; 3) complete at least 5 Silver, 5 Gold and 4 Platinum offers. Available offers will vary and some offers may require a purchase to qualify. Upon successful completion of all Program Requirements, we will fulfill the gift with no shipping charges.”

The problem is that it’s almost impossible to complete all the requirements, and most people stop in the middle — after they have spent a lot of time and given out their information to companies they wish they hadn’t.

Our recommendation: Ignore these offers, no matter how tempting. Check out our case study on designer handbags to see why:

http://www.scambusters.org/designerhandbags.html

5. iPhone spam:

We predict an avalanche of iPhone spam. Most will probably offer iPhones at ridiculously low prices.

Our recommendation: NEVER respond to spam. As we always say, “If it’s spam, it’s a scam.” Don’t be tempted.

6. Fake iPhone websites and phishing scams:

We anticipate seeing lots of fake iPhone websites and phishing scams.

Many of these will probably be well done, and will look like the Apple online store or the AT&T website. Others will claim that you have purchased an iPhone and there was some kind of problem with your order that you need to correct.

Since your Social Security number is needed to do a credit check when you activate your iPhone, we expect scammers to use these fake websites for identity theft, as well as to simply steal money from your credit card or bank account.

Our recommendation: Learn to recognize these scams so you never respond to phishing scams or enter information on fake websites. You can find out how to avoid these scams here:

http://www.scambusters.org/phishing.html

Finally, recognize that the only way to activate the cellular service for your iPhone is through the Apple iTunes store using a new version of the free iTunes software, so ignore all other requests for your personal and financial information.

http://www.apple.com/itunes/download/

7. iPhone viruses, Trojans and spyware:

With the popularity of the iPhone, there is no doubt that we’ll see viruses, Trojans and spyware that use images, other attachments, or other iPhone-related information as bait.

Our recommendation: Never open attachments from people you don’t know or that you aren’t expecting. Keep your anti-virus software and anti-spyware software up to date. Use a firewall.

For more information, visit:

http://www.scambusters.org/anti-virus.html

http://www.scambusters.org/spyware/

http://www.scambusters.org/firewall.html

Will we see all seven of these iPhone scams?

Yes, we are convinced we will. We expect most of these scams (and probably several others) to surface during the next week — and probably much sooner.