Don’t Be Bamboozled

Recession-fueled scams are on the rise. Here’s how to avoid financial fraud

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Dion Chavis was victim of an ATM skimming scam. (Photo by Keith Lanpher)

Small business owner Dion Chavis couldn’t figure out how $900 disappeared from his checking account. Chavis, also known as “Showtime,” the radio personality heard throughout the Hampton Roads area in Virginia, checked his bank statements and noticed a withdrawal had been made at an ATM some 120 miles from his home, yet his debit card was still in his possession.

Chavis discovered the missing monies in July, after a $50 purchase at Macy’s was declined. That morning he had paid $200 to install a new CD player in his car, but his account still should have had a balance of $1,500. A fraud representative at Bank of America told Chavis that the bank had frozen the account when withdrawals totaling $1,100 were made in less than 24 hours. Chavis was baffled. He later found out he’d been a victim of ATM skimming, a high-tech scam in which thieves attach an innocent-looking card-reading device over an ATM’s card scanner. The reader captures the person’s banking information; installed above the ATM is a hidden camera that records the user’s PIN number.

Chavis wasn’t the only victim. “When I spoke to the police in Richmond, they had 50 cases of ATM skimming that were actively being investigated,” he says. Although the thieves haven’t yet been caught, Chavis was lucky. Within 48 hours the bank refunded the full amount that had been pilfered from his account.

When the economy flattens, scammers are known to come up with innovative ways to separate hardworking folks from their money. In uncertain financial times, consumers are more willing to take risks to relieve the burdens of unemployment, foreclosure, and debt. That’s generally when opportunistic fraudsters step in. Since the recession began in December 2007, financial scams have increased, says John Breyault, director of the National Consumers League’s Fraud Center, a nonprofit in Washington, D.C., that advocates on behalf of consumers. Results of a recent UNISYS survey reveal that three in four Americans are concerned about increased vulnerability to identity theft and fraud in light of the economy. “[Scammers] look for things on the news that will help them connect with their victims,” says Breyault. “They have learned that a good lie is based in truth–which is why some scams are especially confusing.”

Some of the timely topics scammers exploit: identity fraud protection efforts by banks, urging customers to keep their account and Social Security numbers private. Scammers also use topics such as bank closings, tax breaks, and government giveaways related to the Obama administration’s economic stimulus plan to incite interest from potential victims.

Identity thieves are using these news stories to their advantage, setting up Websites that imitate those of official government agencies, like the Federal Deposit Insurance Corp. or the Internal Revenue Service.  Scammers known as pretexters (because they contact you under a false pretext) call or e-mail consumers and urge them to fill out forms on these sites in order to receive bogus tax refunds, recover money lost in a bank closing, or recoup investments stolen from them in a scam.

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    Hi Marcia,
    I’m so proud of you!
    I found your’Bamboozle’ article very informative. The information that really interested me was the government job site. No, not for me but for my relatives. I’m placing it on my family website.

  • This is a great article. More people need to be informed about identity as well as financial frauds and crimes.

    Don Knox, CPP, CITRMS

  • I resisted buying the Kindle 1 but I couldn’t resist any longer when the Kindle 2 came out. And I’m so glad I caved in. I love this device. I’m still discovering all the ins and outs of using it.

    Magazine and newspaper articles come to my Kindle every day or every week, depending. I bought over 100 books that were free or 99 cents, all the classics that I love, Jane Austen, the Brontes, Elizabeth Gaskell, Herman Melville, Charles Dickens, Shakespeare, and on and on. I also bought a few new books, and some favorite books like A Tree Grows in Brooklyn, or The Glass Castle.

    I read a lot and I will still use the library extensively as I can’t afford to buy all the books I want to read, but the Kindle is great for the books I do buy, and once I got it set up with lots of reading material, I might now buy 1 or 2 books a month, at $9.99, which is no hardship.

    I can surf the internet, though I haven’t quite figured that all out yet, and I can put my own files on Kindle. I’m a writer and working on a book. I can put that on Kindle just to see how it reads.

    I find the Kindle very comfortable in my hands, and easy to read. I sit in coffee shops reading it in the morning, and people sneak curious glances at it. I want to tell them, “It’s great, you should buy it.” I’ve had people come up and ask to see it. I’m glad to show it to them.

    The $30 case that goes along with it makes it feel like a book and gives that added protection. The only drawback is that it doesn’t stay closed, so I need to find a rubber band or piece of velcro to put around it, that is the only flaw I have found.

    The Kindle is really fun to use and I’m having a blast learning to navigate it and how to use all its features. I can bookmark pages (the corner of the page actually “folds down” to look like a real book), highlight and save passages or quotes, which I can then put on my computer and send to friends to share. I have no regrets, it’s everything I might have wished it would be.

    ETA: I think some people don’t understand that the Kindle doesn’t have a backlight ON PURPOSE and I hope the engineers never change that. The e-reader is supposed to replicate the experience of reading a book, not a computer. A book doesn’t have a backlight either. It’s easier on the eyes not to have that light. I bought a $13 light that clips on (it’s advertised with it) and that’s great for lying down in bed or in darker places. But most of the time I have no trouble seeing the text in any light. It’s also easy to make the font larger whenever necessary, like when my eyes are tired. And the lack of backlight saves on the battery. I can leave it on sleep for days and hardly ever need to recharge the battery. I can’t say enough that I am so not disappointed in this product.

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