Scamlines 12: They may be legal but they're still scams

Scammers who bend the rules, land fraudsters and escrow tricksters in this week's headlines

Scams that operate just inside the framework of the law feature in this week's Scamlines roundup. We've two cases -- one in Canada, another in Australia -- where legitimate companies try to fool victims into paying for something they don't really want.

We also have the lowdown on a fascinating land fraud in Japan that could just as easily happen in any other country and news of a new outbreak of a nasty and costly scam we've reported on before -- fraudulent online escrow funds.

But it's not all bad news. Investigators announce they've busted a huge, international ring of scammers believed responsible for thousands of phishing/identity theft attacks in the US.

1. Legal scam #1: Dating tips by phone

The scam: Australians receive cell phone text messages, giving them a code to enter on a "fun" website. This is actually a sign-up to receive dating tips which are charged to the users' phone accounts.

Both the phone message and the website show the charges (about US $5 a time -- twice a week) but these are easily overlooked. Victims actually have to opt out to stop getting the messages.

The solution: Phone numbers are public knowledge these days. Don't assume text messages come from someone you know. And don't sign up for anything without double checking if there's a charge.

2. Legal scam #2: Double domain con trick

The scam: We've written about domain name registration scams for years.

This latest one is both legal and doubly painful. A Canadian company sends Internet domain owners a "renewal" bill. It's really a disguised solicitation to the victim to transfer registration of the domain to this company, which charges an exorbitant fee both for the transfer and the registration.

To add insult to injury, the "invoice" includes an annual fee of almost $100 for submitting your domain address to Internet search engines.

The solution: The only firm that can legitimately bill you for your domain name registration or renewal is the company it's currently registered with. Anything else is a solicitation. US solicitors must declare their status on their "invoice" to stay within the law. The same doesn't apply in other countries.

And submission to search engines is a complete waste of time -- let alone money.

3. Buy-back scam targets victims for second time

The scam: In a suburb of Tokyo, Japan, scammers who sold worthless land to victims, resurface in a different guise as realtors offering to buy back the land for more than the victims paid.

The catch -- owners have to pay supposed fees so the "buyers" can seek development permits they say will enhance the value of the land. They pay the fees and the tricksters disappear.

The solution: This could happen anywhere. If you've been scammed it's easy to be duped by a supposed opportunity to get your money back. It's simply too good to be true. Asking for more details about the permits then checking these out would have halted this scam.

4. Trash can upgrade is garbage

The scam: In Essex County, England, a phone caller tells residents their trash cans or bins must be upgraded to a newer, more eco-friendly version approved by the local council. The caller asks for a payment of £7.40 (about $14).

Police fear the scammers also want to steal personal financial details from the residents or identify vulnerable victims for property theft. The council and disposal authority have no such replacement plans.

The solution: With so much emphasis on being "green," it's easy to fall for a trick like this. You just need to do what most of the intended victims did here -- call the city or the disposal authority to check it out. And, as always, never give out personal financial details over the phone to someone you don't know.

5. New warning on phony escrow funds

The scam: Con artists cash in on the very thing you're trying to avoid: internet fraud. In San Francisco, CA, they set themselves up as an escrow company, offering a secure money-holding service for big ticket items bought on the Internet.

Legitimate escrow works by holding buyers' cash until they've received the goods from the seller.

But in this con, the scammer is also the "seller." He offers a costly item for sale online, usually at a bargain price, then suggests his buyer deposits the money with the supposedly reliable escrow company he just happens to know. The victim hands over the cash, never receives his purchase and discovers the escrow company doesn't exist.

The solution: This is nasty. Beware of using an escrow company someone else suggests -- scammers have even been known to hijack the names of legitimate firms and set up phony websites. The giveaway is usually a request for a Western Union money transfer instead of a bank-to-bank money wire.

Play safe -- find your own escrow company licensed and bonded in your state. You can read more about escrow scams here.

6. Big screen fraudsters hit Wal-Mart

The scam: In Santa Rosa and Pensacola, FL, two cheeky scammers pull a fast one on local Wal-Mart stores. One buys a big screen TV, takes it out and hands his receipt to an accomplice. The second man enters the store and collects another TV, showing his receipt on the way out. The first TV is later returned to a different Wal-Mart store for a refund, so the scammers end up with a free TV.

The solution: Store owners are wise to this trick but thieves still get away with it during busy periods. Increased door security helps but closed circuit TV is most effective. In this case, Wal-Mart passed photos of the culprits to the police and the pictures have been posted online.

7. Seniors targeted in health insurance con

The scam: Using the name of a legitimate elder care organization, scammers offer secondary health insurance services to seniors in Bartlesville, OK. They ask victims for credit card and other financial information. It's nothing more than blatant phishing.

The solution: As we stress so often here at Scambusters, some seniors are among the most vulnerable targets of scammers. You can help by alerting others, underlining the golden rules: Don't believe someone is who they say they are without absolute proof. Never give them your financial details without independently confirming their credentials, and never give your information to someone who calls you.

We did a special issue on scams against seniors in Scambusters #267.

8. Romanian phishing network busted

The bust: Police arrest 38 people, mostly Romanians living in the US (mainly California and Connecticut), on suspicion of involvement in identify theft. They say the suspects are part of an international phishing network.

Hackers in Romania set up the phishing stings then pass victims' financial details to US-based accomplices who use them to withdraw money from victims' accounts or to buy goods with stolen credit card information.

When it comes to scams, sometimes the law protects you, sometimes it doesn't. The best policy is to look out for yourself - and those you care for.

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