Fraud Prevention and Investigation - Unexpected Winnings and Fake Charities - Assignment Example

REPORT ON: FRAUD AND INVESTIGATION Student’s name Professor’s name Course title Date Unexpected winnings Money is one of the most important resources that people all around the globe are working up and down to obtain it. In fact, it is one of the most important and crucial resources that keep the world moving. People go to work and spend more time working in order to get money information  (Scam Savers, 2017). Because of this, scammers have also developed strategies of how to illegally obtain money from unsuspecting citizens. Many unsuspecting citizens or consumers are always attracted by the idea that a lot of money can me made online, into an extent that they are tricked to giving out very important personal information such as bank details, date of birth, personal names and other important and confidential information  (Scam Savers, 2017). Scammers can use such personal and confidential information to undertake fraudulent activities and may end up leaving owners of information with huge losses and damages. Scammers may indicate that one has won a prize and demand a small fee to facilitate the processing of the “prize” (Goldstein, 2009). Mostly, they continuously collect fees and delay payment for the prize. Similarly, scammers that usually communicate over the phone usually make long and delayed conversations that usually result or lead to hefty phone bills. Research shows that most of online scammers usually make unsuspecting citizens hurry in sending money convincing that delay in sending money will result to the “prize” being revoked (Goldstein, 2009). The scammers always ensure that the information is kept secretive in order to prevent consultation being carried out by the prey. Psychologically, to the consumer, they will comply with keeping the information secretive because they want all money to be theirs and theirs alone Pennsyvania Lottery There is a real game offered by the Pennsylvania lottery. However, the game was later converted to a scam by cons.It turned out to be one of the scams in Pennsylvania. According to a woman who was involved, it was indicated that you would not win the game using a mere credit card at a store. The scam was undertaken by bright and clever people who made sure that nothing left raised suspicion. A woman was called and asked whether she had won mega millions. However, the woman replied that she has not bought any ticket and if she had bought one, she would have seen as the winning lottery numbers in the newspapers if she had actually hit the jackpot (Muschick, 2017). Real life example My friend once received a text message on Facebook informing him that there was a free lottery win from Facebook and that he and 20 other people could win amounts up to $140,000. At first, my Friend James didn’t believe that information and found it weird for Facebook to be giving out such huge sums of money. I was also convinced that the message was not true because winning a lottery entailed first buying a ticket, of which James had not bought. He was told to may some money first, which he later realized that it was a scam. Fake charities Scammers have advanced their stealing skills in an attempt to make unsuspecting preys believe in them. Fake charities are scams that work by taking advantage of people’s generosity or compassion for other people in need (Teixeira da Silva, 2017). Through this mechanism, scammers steal people’s money by posing or pretending to be genuine charity. Research shows that these scammers not only cost unsuspecting prey money, but they also divert the much needed donations away for the genuine or legitimate causes and charities (Teixeira da Silva, 2017). All year round, fake charities occur around the globe and usually take the form of a call for people to respond to real disasters or emergencies like floods, earthquakes and other catastrophes. Many a times, fake charity scammers will either pose as agents of well-known and legitimate charity organizations like Red Cross or world vision, or may even create their own charity name (The Internal Revenue Service (IRS), 2017). For instance, scammers may come up with fake charities claiming that they support people suffering from chronic diseases together with their families. Scammers may also try playing with people’s emotions by claiming that the donations made will help children who are ill. There are various ways that fake charities work. One way is by people collecting money approaching you either on the street or at your front door. Another way is my scammers setting up websites that look similar to those of big and well know charity organizations (The Internal Revenue Service (IRS), 2017). Another common way is by scammers calling or even emailing you requesting for donations. It is important that the members of the public are notified of warning signs to prevent losses. One of the warning signs of fake charity is that if the donations are collected by an individual, the person collecting them doesn’t have an official identification from the charity organization (The Internal Revenue Service (IRS), 2017). Hurricane Katrina scams Immediately after the 2005 devastation that occurred along the American Gulf Coast, it is estimated by the FBI that close to 4000 fake websites sprang up with an intention of misdirecting genuine charities into the accounts of scammers. According to the FBI, at least 60% of these scams were hosted on foreign servers. Most of the scammers posed as genuine charities like Red Cross doing real work.. In fact, the FBI note that this is one of the strategies that worked before and unfortunately is still working to date, especially to unsuspecting citizens (http://www.accountingdegree.com, 2017). Real life example Last year but one, 2015, in October, I received an email from action aid, appealing for members of the public and well-wishers to donate money in aid of ailing children from Africa. A picture of a child accompanied the mail. The child was pictured to appear as if she was suffering from hunger in one of the African countries. Since I had some few dollars in my PayPal account, I quickly skimmed through the site and obtained payment details and donated some few dollars. I immediately received another mail thanking me for that donation, and confirmed that the donation will go a great way to helping a poor child in Africa. I later realized it was a scam when the payment details in the scam mail differed from those in the genuine site. Jobs and investment Unemployment rates in the recent past have increased. This could be majorly because of tough economic times that have been experienced in the recent past. However, in as much as the harsh economic conditions create unemployment probably because businesses close, scammers have found a business “opportunity” in such scenarios (Australian Competition and Consumer Commission, 2017b). Scammers always woo unsuspecting people into falsified job openings in reputable organizations or even grasping investment opportunities in high profile business organizations. Many a times, people fall for such schemes and end up losing. One of the ways job and investment scammers work is by contacting you through either mail or phone and makes a job offers that promises very high returns compared to the effort put (Australian Competition and Consumer Commission, 2017b). They even go ahead to putting falsified job openings or opportunities on classified websites. Mostly, the job offered requires you to do something so simple that if you imagine losing the job offer, you will regret. However, you will be told that in order for you to accept the job offering, you will be required to pay a small fee to be used to acquire materials for the job in hand. After making the payment, a person always doesn’t receive anything or if he receives, it is not in accordance to what he or she was promised (Australian Competition and Consumer Commission, 2017b). A different version is that the scammer can really offer the job but will fail to pay after working, giving reasons such as the work done not meeting the required standards to justify the pay. Scammers can also promise lucrative and much appealing investment opportunities in big and high profile companies. The unsuspecting prey will be wooed into believing that they will get very high returns for their “Investments” (Australian Competition and Consumer Commission, 2017b). Later on, after committing large amounts of money into the “organization”, the scammers disappear with the loot, leaving the “Investors” with huge financial and emotional losses (Australian Competition and Consumer Commission, 2017b). False promises case A tech company placed Ads in Manitoba newspaper, promising to assist companies unlock funds locked up in RSP accounts. With much convincing, the investors were led into purchasing shares of the Tech company, with hopes that the share prices would increase in value later on. According to Investment fraud (2017), the company gave the investors some percentage if their money. To make it appear as a genuine business transaction, the investors were made officers of the company. According to the case, the investors lost money to the tune of 30-40% of the amount of money held. Additionally, the faced possible tax consequences. To date, their share prices are very low and there is no possibility of them gaining value any time soon (Investment fraud, 2017). Real life experience In October 2014, I received a call from an individual who offered an investment opportunity. As a matter of fact, the investment t callers were so professional in the manner in which they approached and they seemed to have a lot of knowledge and insight into matters investment. They answered all my questions and their initial contact was later followed up by important calls from “investment advisors”. Since my previous investment didn’t do well, I decide to give this new investment opening a try. In fact, I never consulted anybody. At first I started with $1200. I later realized it was a scam when I one day I opened my account and it wasn’t working. Dating and romance Because of the advancement in technology, people have also advanced dating to an extent that dating is done through online platforms. Scammers have therefore capitalized on the technological advancement. Scams on dating and romance always take place through online dating sites, not limited to even social media and mail chats (Australian Competition and Consumer Commission, 2017). In fact, as a form of introduction, scammers are known to even make personal calls. Most scammers in dating and romance sites create fake profiles that are meant to lure unsuspecting members. One of the ways of luring people into believing in them is by using fictional names or picture or even falsifying the identities of real, prominent and trusted people such as celebrities, aid workers or even military personnel (Australian Competition and Consumer Commission, 2017). Most scammers will, in a relatively short period of time, express intense emotions for you and will make a suggestion that the relationship be moved away from the website to more private form of communication such as personal mail or text chat. Most of these scammers often claim to be originating from Australia or USA but working overseas in humanitarian organizations (Australian Competition and Consumer Commission, 2017). Scammers will do anything within their power and reach to win your trust. They will shower you with a very kind and loving words, share personal and “confidential” information and even buy you gifts. They will take time to win your trust, to an extent that they will pretend to book flights and pay you a visit but will never do (Australian Competition and Consumer Commission, 2017). Once they are certain that they have won your trust, they will indirectly demand gifts or even money from you. Some will even convince you that they wanted to visit you but running short of some dollars to enable them book a flight and will request you to send them money to facilitate their visit. After sending, they will go offline and never will you hear from them (Australian Competition and Consumer Commission, 2017). The Toronto Woman scam The romance between the two parties is seven years old since it started in the year 2010. According to the details of the story, the man was having financial issues and he therefore notifies his long distance love, a widow and a former employee of Toronto, who in turn send him $40,000 to help him. It is indicated tat the woman continually sent money with high hopes of pursuing $22 million in compensation that had been promised the court system in Nigeria. The whole situation crashed when the woman finally sold her condo and sent over $450,000 to the Nigerian man (CBC New, 2017). However, an investigation into the case by the Toronto police showed that there was no man, neither was there any compensation, and that it was an online dating and romance scam (CBC New, 2017). Real life experience My friend’s mother was signed up to facebook by her daughter. The mother was convinced by the daughter was a social media platform where people meet, chat and exchange photos. The mother was in fact happy that she was connected and that she could see pictures of her children and grandchildren. After one to two tutorials, my friend’s mother was set to go. She said she received a friend request from a man working as a US soldier in Afghanistan. After some thought, she accepted the friend request from the man and they turned out to be friends. She narrated that they became very close friends. Later , the woman was coned a lot of money after she sent them to the man. References CBC New,. (2017). Can't buy me love? Woman out $450K after online romance scam. CBC News. Retrieved 30 March 2017, from http://www.cbc.ca/news/canada/toronto/online-fraud-450000-1.4025651 Australian Competition and Consumer Commission. (2017). Dating & romance. Retrieved 24th March 2017 from https://www.scamwatch.gov.au/types-of-scams/dating-romance Australian Competition and Consumer Commission. (2017b). Jobs & employment. Retrieved 24th March 2017 from https://www.scamwatch.gov.au/types-of-scams/jobs-investment/jobs-employment Goldstein, H. (2009). Fraud Enforcement and Recovery Act of 2009: Congress amends money laundering and criminal fraud statutes to expand their scope and penalties. Journal Of Investment Compliance, 10(3): 37-40. http://dx.doi.org/10.1108/15285810910995566 http://www.accountingdegree.com, A. (2017). The Top 9 Charity Scams of All Time - AccountingDegree.com. AccountingDegree.com. Retrieved 30 March 2017, from http://www.accountingdegree.com/blog/2011/the-top-10-charity-scams-of-all-time/ Investment fraud,. (2017). Case Studies | Learn About Investment Fraud | MSC Fraud Prevention. Recognizeinvestmentfraud.com. Retrieved 30 March 2017, from http://recognizeinvestmentfraud.com/learn-about-investment-fraud/case-studies Scam Savers. (2017). Unexpected Winnings or Money. Retrieved 24th March 2017 from http://scamsavers.weebly.com/unexpected-winnings-or-money.html Muschick, P. (2017). Call about Mega Millions winnings is a mega scam. themorningcall.com. Retrieved 30th March 2017, from http://www.mcall.com/news/local/watchdog/blog/mc-mega-millions-lottery-winnings-scam-call-20150127-story.html Teixeira, da Silva, J. (2017). Fake peer reviews, fake identities, fake accounts, fake data: beware!. AME Medical Journal, 2, 28-28. http://dx.doi.org/10.21037/amj.2017.02.10 The Internal Revenue Service (IRS). (2017). Fake Charities on the IRS “Dirty Dozen” List of Tax Scams for 2017.. Irs.gov. Retrieved 24th March 2017 from https://www.irs.gov/uac/newsroom/fake-charities-on-the-irs-dirty-dozen-list-of-tax-scams-for-2017 Read More