Three ways kids can get caught up in scams, and how to spot them: Internet ScamBusters #321
Young people get caught up in kids' scams through naivety, as innocent fronts for crooks or through their own mischievous actions. In this week's issue, we explore the three ways kids' scams happen -- with suggestions on how to prevent these scams.
Before we begin, we recommend you check out this week's issue of Scamlines -- What's New in Scams?
Next, you may want to spend a moment looking at this week's most popular articles from our other sites:
Answers to 7 of the Biggest Questions About Beauty in Landscape Photography: An Interview With Steve Johnson, Part 1: Listen in as Steve Johnson talks about empowering individual artists to find the beauty in landscape photography.
A Funny Thing About Credit Card Signatures: Find the humor in the world of credit card signatures with this bit of giggles and smiles.
How Your Credit Report Can Detect Identity Theft: You'll get an early indication of identity theft by listening to what your credit report can tell you.
Tips to Make Sure You Don't Waste Money: You'll stop wasting money without even leaving the house with these simple tips.
Now, here we go...
Kids' Scams: The Good, the Bad and the In-Between
We hear and read a lot about scams aimed at seniors, but this week we want to switch our focus to the other end of the age range and talk about kids' scams -- online and offline crimes that involve children.
There are basically three types of kids' scams:
The good -- that is, through no fault of their own, they just become scam victims -- so let's call these kids "the good."
The bad -- when they set out to scam others. So these are scams that children pull off themselves -- they're "the bad" types.
The in-betweens -- when they're used by others, knowingly or not, to con people as a front by a con artist -- let's think of these children as the in-betweens.
We look at each type of kids' scam in turn.
1. Scams that target children
Children are often trusting and naive, which makes them sitting targets for crooks. And remember, scammers have no feelings, no compassion, so they don't care who they rip off, how much pain or upset they cause.
The most common scam aimed at kids is usually an online sale ad for a piece of mouthwatering gadgetry -- like an iPhone -- at a knock-down price. Victims have been known to sell other stuff and/or use a chunk of their savings to pay for something that doesn't exist.
Often they're so embarrassed they don't tell their folks.
On the other side of the coin, children selling goods online are often targeted by scammers using phony escrow companies or forged checks to lure the teens into sending off their stuff before they get paid.
Another frequent con that targets children is the talent kid scam. This takes many forms -- an invitation to take a screen test or join a child model agency or a celebrity soccer school.
Sometimes, victims are simply notified that they've won some sort of award or prize in recognition of their skills. Other times, they are offered help supposedly to gain scholarships.
In all cases, the kids, or more usually their parents, learn they must pay a big upfront fee. Then the "opportunity" itself either doesn't exist or is a cheap sham that bears no relationship to how much has been paid out and is often protected by small print exclusions that let the scammer off the hook.
Children can also be unwittingly hooked into phishing and ID theft scams by giving away personal information -- about themselves or their family -- online, often in bogus competitions. See, for example, this article on identity theft.
And, of course, there are far worse threats in the form of predators who hang out on social networking sites or in chat rooms pretending to be someone else to gain their victim's trust and confidence.
Actions you can take: Kids notoriously hate parents interfering with their online activities but, at the very least, you should alert them to these dangers. Tell them never to disclose personal details on the Internet, never to agree to meet someone they don't know without your permission, and never to part with money they can't afford to lose before checking it out with you.
Check out this article for more tips on teaching children how to avoid Internet scams.
2. When kids become scammers
On the one hand, they seem innocent and naive. On the other hand some children are streetwise and worldly-wise. And they know how to play on your emotions to empty your wallet or pocket book.
Young people are also the most Internet-savvy generation and it's not unusual to find hackers and online fraudsters in their early teens -- like the 14-year-old who made $800,000 on a pump and dump stock scheme a few years back and the Japanese high-schooler who hacked into an online game and stole $360,000 of virtual money, which could be converted into hard cash.
One of the most frequent kid scams, where children are the perpetrators rather than the victims, is the magazine subscription con, where children go from door to door selling subscriptions to non-existent publications, supposedly to help other children.
Often they claim to be on a character-building exercise devised by their school or sports coach.
Other recent kid scams include:
In Northeast Ohio, a 12-year-old girl toured local businesses seeking money for multiple sclerosis charities, offering forged sports center passes in exchange.
Also in Ohio, another 12-year-old used his father's credit card to pay for paintball adventures, hacked a local firm for its bank account details, then used these to pay the credit card bill!
In Wales, a child earned about $60,000 selling non-existent goods on eBay.
In Fraser, Australia, three 14-year-olds pretending to be on a research project talked their way into several homes where they stole money.
Steps you can take: Remember that age is not necessarily a predictor of innocence. Treat any transaction with a young person with the same wariness you'd apply to anyone else you don't know.
More about kids and magazine and charity fraud in this article on our site: Beware this "Neighborly" Charity Fraud.
3. Using kids as a front for a scam
Not only are most kids more trusting and naive than adults, but they also seem to have that effect on people who come into contact with them. Because of their natural aura of innocence, we're more likely to believe stories about kids and/or to be moved to offer help.
Beggars and pan-handlers know this and will often be accompanied by a child or even carry a baby as part of their come-on for cash. This is a common ruse aimed at tourists in third world countries.
It's a simple step from there to using them, or fabricated tales concerning children, as a way of raising money. The kid scams here range from donation boxes in convenience stores, supposedly to raise money for medical treatment for a child, to street and door-to-door collections for non-existent or unaware children's charities.
In a recent case in Gainesville, Florida, a woman collected thousands of dollars from local churches after falsely claiming she needed the money for kidney treatment for her son.
Sometimes, a story of a child with a terminal illness is used purely as a meaningless hoax, to get people to send chain letters or chain emails, just for the heck of it.
Using the name of a children's organization can be enough to fool us into making irrational decisions. A well-practiced example is the Church of Children scam, which, for good measure, rolls in another trustworthy connection -- religious missionary affiliations that seem to legitimize the location, usually Togo in Africa.
Bogus orders for banners for the church are placed with manufacturers who are then asked to pre-arrange shipment with a freight company that has to be paid in advance. The freight company is bogus. It's an advance payment, 419 scam.
Steps you can take: Be skeptical about any child-related activity that is going to cost you money. Make donations directly to charities rather than into collection boxes unless you're sure they're legit.
We owe it to our younger generation to do all we can to protect them from scams. But we also owe it to ourselves not to fall for kid scams. In particular, technology has put a powerful weapon into the hands of potential young crooks. So we also must do what we can to help protect them from themselves!
That's it for today -- we hope you enjoy your week!