Top Scams of 2011 and 2012

Check out our annual top scams countdown: Internet Scambusters #472

theft and malware are in crime rankings. They head up the
charts for both 2011 and 2012.

But below the surface, other threats are starting to re-emerge
— things like online romance scams.

And the threat to our privacy and security through hack
attacks looks like it’s on the rise, as we explain in this
week’s report on 2011 top scams and 2012 predictions.

But first, we urge you to take a look at these top articles
from our other websites:

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How to Make Scrapbooking Cards: If you’ve never tried scrapbooking card making before then this is a must read article!

And now for the main feature…

Top Scams of 2011 and 2012

There’s some good news and bad news sprinkled around our
annual look at the top scams of the past and coming years.

The good news is that, according to the most recently
available research, the number of identity theft and fraud
victims in the US has dropped sharply.

The bad news is that, on average, the out-of-pocket cost to
individual victims went up, and identity theft remains in the
number one slot in our top 10 scams list both in 2011 and 2012.

One other bit of disappointing news: Just as we were all
wising up to the “lost inheritance” or money-smuggling types
of Nigerian scams, a massive new wave of bogus online romance
tricks is pushing them back up the charts.

And, oh yes, lotteries. When will we ever learn that you don’t
win lotteries that you didn’t enter and that you should never
pay money to collect your supposed winnings? It seems there’s
a never-ending supply of victims.

Other notable trends for 2011 and 2012 — the continuing
growth of social networking scams (despite efforts to beef up
security and privacy) and hacking-related data breaches.
Expect to see more of these.

Results for 2011

There’s never pleasure in saying “we were right” when it comes
to looking back at our 2011 top scams predictions.

We made a couple of small adjustments to the final outcome,
but according to the feedback we get from thousands of
subscribers and readers, plus our own in-depth research and
monitoring of surveys and crime reports, we were pretty close
to the mark.

As we see it, this is the way things turned out.

Top Scams of 2011

10. Travel and vacation scams (Predicted #10). Each year, we
hear of a new crop of travel tricks but timeshare-related
scamming is a hardy annual. Also in 2011, global travel was
hit by a volcanic eruption in Iceland. As well as triggering
seismic activity, it sparked a number of scams including bogus
claims of being stranded and a phishing scam based on a phony
compensation offer to travelers.

9. Doorstep scams (Predicted #8). This is a catch-all term
covering bogus contractors and crooks trying to talk their way
into victims’ houses or collect for non-existent charities.
Natural disasters, like hurricanes, push up the incidence of
this scam and 2011 was not as dramatic as some previous years.
So, the scam came in one place lower than we forecast — but
it’s still a “top-tenner.”

8. Investment scams (Predicted #9). After the Madoff scandal,
we thought we’d seen it all but more and more Ponzi schemes
(albeit not as big as Madoff’s) surfaced. And with low
interest rates, the hunt for better returns lured more and
more investors into dubious, too-good-to-be-true schemes.

7. Skimming (Predicted #7). The practice of stealing credit
and debit card numbers has become more widespread. ATMs used
to be the sole target but we increasingly receive reports of
skimming devices being used at gas stations and by restaurant
servers using pocket-sized skimming devices.

6. Nigerian scams (Predicted #4). Those Nigerian tricksters
seemed to be down on their luck in 2011. Most people no longer
fall for those poorly-worded messages saying we inherited a
fortune or asking us to help smuggle out government cash. But
advance fee type scams, where victims have to wire cash to
scammers after receiving a bogus check, are still going

5. Lottery scams (Predicted #5). You won — you really did! Oh
no, you didn’t. Despite their implausibility, phony lottery
win notifications continue to hoodwink hundreds, if not
thousands of victims, especially among vulnerable groups like
seniors. The tragedy is that the amount of money some victims
hand over in response to repeated requests from the crooks
often runs into five or even six figures.

4. Internet sales (Predicted #6). Online scams based on bogus
for-sale items soared in the past year as more of us turned to
the Internet for our shopping. We’ve noticed a particular rise
in reports about scam sales on Craigslist (despite the
company’s repeated warnings to users) and a surge in the
setting up of spoof shop-window websites. They sell fakes at
designer-label prices, poor quality products or, worst of all,
non-existent items.

3. Economy-related scams (Predicted #3). You didn’t have to be
a crystal-ball gazer to see that economic recovery was going
to be a struggle in 2011, and it was. With unemployment
figures remaining stubbornly high and many Americans battling
to keep their heads financially above water, bogus jobs and
foreclosure scams abounded.

2. Malware (Predicted #2). One of the biggest ever organized
malware scams surfaced towards the end of the year when 4
million PCs were found to be infected with a virus that
redirected users’ shopping searches to particular retailers.
The alleged perpetrators were said to have earned $14m from
the scam. And that’s just one example of how malware continues
to dominate Internet crime.

1. Phishing and Identity Theft (Predicted #1). The 2011
Identity Fraud Survey by Javelin Strategy & Research randomly
polled 5,000 adults and found 466 — or just less than 1 in 10
— had been ID fraud victims. This was considerably lower than
the previous year, which had been exceptionally high. Even so,
Americans collectively lost more than $30 billion to ID crooks.

Predictions for 2012

As consumers become more aware of risks, especially online,
crooks are turning to more sophisticated technology to steal
information from places over which we have no control and to
target vulnerable groups like seniors.

The older age group are particularly at risk from scams on the
Internet because they represent possibly the fastest-growing
section of users. Most other age groups have been online for
years and, with the exception of very young users, are tuned
in to many of the security risks. Not so with older folk.

One worrying trend that will help keep ID theft at the head of
the top scams list is the growth in data breaches — loss of
personal information over which we have no control. For more
on this, see our earlier report, What to Do If You’re a Data Breach Victim.

Against that background, here’s our top scams forecast for 2012.

10. Travel scams. Timeshare schemes will be with us of course,
but look out for a surge in free flight and vacation scams —
telephone and snail-mail offers front-loaded with service
charges. After you pay, you find the offer has expired. The
London 2012 Olympics likely will also be a magnet for ticket

9. Money-for-nothing scams. This is our new catch-all label
for doorstep and charity scams. You pay money to a charity
collector — on your doorstep, in the mall or online — often
after a natural disaster, but your cash ends up in the
collector’s pocket. Also on your doorstep: bogus and crooked
contractors who take your money for work you didn’t need or
which they don’t bother to do.

8. Economy-related scams. Times are still uncertain, but
other, more lucrative scams will likely push this group of con
tricks that includes bogus job schemes further down our top 10
scams list. Foreclosure scams might start to cool off but
other fee-laden loan modification and bogus grant tricks will

7. Investment scams. We haven’t seen the end of crooked Ponzi
schemes yet, and with low interest rates, high precious metal
prices and turbulent markets, scammers have latched on to
gold, copper and currency trading as a lure to investors.
Anything that pushes up oil prices will also boost bogus
energy-saving products.

6. Lottery scams. Despite stacks of media publicity and tragic
reports of huge financial losses, people continue to be
hoodwinked by emails and letters saying they’ve won a fortune
on a lottery. Scammers use celebrity or official-sounding
names to make their claims more credible and keep lotteries at
the halfway point in our top scams list. Once a victim is
hooked with a small initial “processing” payment, the scammers
just keep coming back for more.

5. Skimming and ATM scams. We’ve broadened this top 10 scams
category slightly to include tricks that not only steal card
information but also block ATMs from paying out. The crook
returns to take your money after you’ve left to complain. This
crime is seriously on the rise because it’s so easy. See this
earlier report, ATM Theft: 8 Tips to Protect Yourself From the 5 Most Common ATM Scams.

4. Nigerian scams. Well, what do you know… now that everyone
knows they haven’t inherited a fortune, Nigerian scammers have
plunged into the lonely-hearts market to make up for lost
“business.” They frequent online dating agencies, especially
targeting older age groups, but also send out emails on-spec,
claiming to have fallen for their victims (whom they’ve never
seen!). Romance ensues, followed by a request for money for an
air ticket. This and ongoing advance fee scams will push this
scam back up our top scams chart.

3. Internet sales. Scammers will try to keep one step ahead of
law enforcement and security software, especially with scam
shopping websites. These tricks also include bogus shopping
comparison sites that pretend to be giving impartial reviews,
phony online pharmacies, and “free trial” sites that trick
victims into unwittingly signing up for recurring credit card
or cell phone charges.

2. Malware. Law enforcement agencies and software companies
have been moderately successful in shutting down botnets, used
for spamming, and fake anti-virus alerts that trick victims
into paying to supposedly secure their PCs. But the scale of
the malware industry is phenomenal. Add in the “gray” area of
adware we unknowingly allow to install on our PCs, and we
can’t see any chance of this PC hijacking moving down our top
scams rankings.

1. Phishing and identity theft. As we said earlier, our
biggest concern is the amount of information hackers have
shown themselves capable of stealing by breaking into the
networks of firms that hold our personal records. We think
this will continue to grow, along with persistent attempts to
capture our confidential information through phishing tricks
via spoof sites, emails and cell phone text messages.

What our annual list of top scams shows is that crooks
continuously change and refine their techniques in their
efforts to outwit us all. No doubt they will continue to do so
but the decline in identity theft crime gives us some hope
that perhaps advances in security technology or just plain
user wariness can help protect us.

It’s probably too much to hope that we can ever turn the tide
against the scammers but by knowing what the top scams are,
you can at least reduce your chance of becoming a victim.

That’s all we have for today, but we’ll be back next week with
another issue. See you then!