The top ten online scams

Stay one step ahead of the cybercriminals with our expert's guide to the most devious high-tech crimes

Amir Orad, EVP and CMO, Actimize

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Amir Orad, the executive vice-president and chief marketing officer of the online security specialist Actimize, is a leading expert on financial crime, cyber security, payments and authentication.

Here, he shares his expertise and describes ten common scams that have cheated people out of millions of pounds worldwide.

“Criminals and fraudsters tend to thrive in financial crises, and from our experience with the largest banks in Europe and the rest of the world, recent activity has simply reinforced this conviction.

“As Actimize provides anti-fraud and financial crime solutions for banks and financial institutions, we have witnessed a wide variety of scams, ranging from the simple and obvious to the complex and astounding.

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“Here are the top ten scams that are currently trying to relieve unsuspecting consumers of their hard-earned money. These have been categorised into two groups. The first five are those that try and fool people into sending money directly to the bad guys – pretending to be in trouble, a job offer, a favour etc known as 419 or advance fee fraud.

“The second five detail scams whose purpose is to steal personal credentials and computer data to convince the bank to send money. Here, at least, most banks will return the lost funds to consumers unless the bank can prove they were reckless.”

1. Social Networking scams
Fraudsters hack a social networking account, such as Facebook, Twitter, MySpace, or Bebo, and then contact friends and family of claiming that they are in trouble and need money to be sent immediately to a specified address.

2. Prediction scams
This scam arrives in the form of an e-mail that provides the results of a football game taking place the following day, at no cost. The next day the receiver discovers that the prediction is true. Over the next couple of weeks further e-mails are sent providing results that also turn out to be correct.

Following a number of e-mails, another one is sent offering the recipient the chance to buy the results of future games for a hefty sum. The trick is that most of the people who received e-mails would have had a wrong result and so fallen out of the process. But statistically, a small proportion of all the people involved would have received e-mails with the correct results each time.

3. Economy-related scams
Prying on those in financial trouble, these scams can be performed via internet, telephone or post and include a range of financial help and offers such as loan and debt consolidation, fix-your-credit-rating, repossession assistance, phoney advance loans and mortgage foreclosure rescue schemes.

4. "It’s me" scam
This is a scam that has been prevalent in Asia but is now being seen in the West. The fraudster calls an elderly person declaring that their granddaughter has been in a road accident. Cries for help are screamed down the phone line and the fraudster informs the person that money needs to be sent immediately to cover the medical costs.

5. The "offer you can’t refuse"
This involves the sale of a product for which the fraudster provides an overpayment in the form of a cashier’s cheque, usually stolen, and asks for the excess to be transferred back. This can also occur when targets are offered a job, for example, to earn 20% commission. They receive a £10,000 cheque and are then asked to deposit it and return £8,000. The cheque later bounces, by which time the £8,000 is already in the hands of the bad guys.

6. Unauthorised billing group
Many technologies and industries are exploited by this scam, whereby a fraudulent company or service continues to charge an account without the owner’s consent. This also includes online suggestions for limited trials or “verification only” of cards and then charging more than mentioned at the beginning. Most banks, however, will return the money to the account.

7. "Man-in-the-phone" scams
Man-in-the-phone scams use deception and trickery during a telephone conversation to persuade an individual to divulge information. The fraudster phones someone and informs them that there has been a security risk on their account. The fraudster then conference calls in the real bank, whose representative asks for the secret information. Since it’s the real bank with the real account information, the individual often answers the security questions, then provides all bank details, while the fraudster eavesdrops in the background.

8. E-mails containing Trojans
Another e-mail scam is promotional offers, especially ones for anti-spyware solutions. These can include links or attachments infected with Trojans that record keyboard strokes and attempt to steal sensitive details such as passwords etc.

9. Fake escrow services
This is a scam that is growing more common on eBay and other online auctions. Legitimate escrow services act as a third-party go-between: buyers send money to the escrow company, which holds the funds until the seller delivers the merchandise. However, fraudsters are commonly setting up fake ones to con buyers as well as sellers.

10. Phishing scams
This is probably the most common form of fraud and it is still as common and as successful as when it was introduced. Masquerading as a legitimate organisation, usually in the form of an e-mail announcing a bank account or PayPal security breach, the fraudster attempts to acquire bank details, passwords, or login details, often via a spoof website.

New law creates panel to probe judicial corruption

By Mario F. Cattabiani

Inquirer Staff Writer

HARRISBURG - Saying he hoped it would begin the process of curing a "perversion of justice," Gov. Rendell signed into law yesterday a bill creating a special commission to investigate the juvenile court corruption scandal in Luzerne County.

"All parties in every branch of government have come together with the shared goals of finding answers, restoring confidence in our juvenile justice system, and making sure this never happens again," Rendell said.

The legislation forms the Interbranch Commission on Juvenile Justice - an 11-member panel with subpoena power to review how former Luzerne County Court Judges Mark A. Ciavarella Jr. and Michael T. Conahan operated a kickback scheme involving thousands of children.

The former judges are accused of collecting $2.6 million over seven years by forcing juvenile defendants, many facing only minor offenses, into two privately run, for-profit detention centers - one in Luzerne County and the other in Butler County.

"What we want this joint commission to do is to find out the why and the how. Why did this happen, how did this happen, and how did this go on for as long as it did?" said State Supreme Court Chief Justice Ronald Castille, who joined Rendell at yesterday's bill-signing.

In harsh public comments, rare for the top judge in the state's highest court, Castille lashed out at the two men at the center of the scandal, calling them "rogues" and "renegades." He called what they are accused of having done "probably the worst tragedy that I have ever seen in the history of the United States."

"I have never in the United States seen a bribery case of this magnitude, and the effect it has had on these children's lives is astounding," Castille added.

The new commission will be made up of members picked by Castille, Rendell, and legislative leaders within the next 25 days.

Castille said Superior Court Judge John M. Cleland of McKean County likely would head the group, which will hold its first meeting by the end of next month. It must submit a report of its findings and recommendations by May 31.

The commission is separate from a review of the case being conducted by Berks County Court Judge Arthur E. Grim at the request of the Supreme Court this year. Grim is examining 6,000 juveniles sent to centers between 2003 and 2008. As a result of Grim's review, the records of about 800 juveniles from Luzerne County have been expunged, and Castille said yesterday that thousands of others might follow.

House Majority Leader Todd Eachus (D., Luzerne) said the scandal "has literally broken the confidence in our judicial system."

"This is a moment where we begin to right the wrongs that have been done to the juveniles in Luzerne County," said Eachus, who sponsored the legislation. ". . . This can't happen again."

Ciavarella and Conahan pleaded guilty in February to fraud charges, but a judge last week threw out their plea agreements, saying the men had not accepted responsibility for their crimes. The decision opens the door for the former judges to go to trial or to attempt to renegotiate their plea deals.

Iceland: Lessons to be Learned from The Economic Meltdown

Iceland: Lessons to be Learned from The Economic Meltdown by Eva Joly
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Global Research, August 7, 2009
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In the wake of the failure of the Icelandic banks Messrs Brown, Barroso and Strauss-Kahn prove that they have understood nothing From G8 to G20, many heads of state and government seem to delight in repeating that nothing will ever be the same again. The world is changing, to the point of being turned on its head by the crisis; the way we think and act in terms of financial regulation, international relations and development aid must therefore, according to them, change too. However, numerous examples contradict all this big talk. The situation in which Iceland now finds itself following the implosion of its banking system and the emergency nationalisation of its three main banks (Kaupthing, Landsbanki and Glitnir) is undoubtedly one of the most significant of these examples. This small country of 320,000 inhabitants is now reeling under the weight of billions of Euros of debt, which has absolutely nothing to do with the vast majority of its population and which Iceland cannot afford to pay. I became interested in Iceland through my role as an adviser to the criminal investigation into the causes of the failure of its banks, which is at the root of its difficulties. However, I am not going to talk about that investigation, but something that goes far beyond it. In any case, I am by no means a spokesperson for the Icelandic authorities, whose responsibility in all this is clearly not insignificant. The previous government had even been dissolved due to public dissent over cronyism and the clannish running of institutions, which were seen as the cause of all of its problems. Moved by the fate of Iceland’s deserving and likeable people, and the complete absence of discussion in the European media about what the future holds for them, I simply want to draw the attention of public opinion to the issues at stake in this case – major challenges that are not confined to the shores of this island. The irresponsible attitude of certain countries, the EU and the IMF to the collapse of the Icelandic economy demonstrates their inability to learn from the dramatic undermining of the model that it embodied: one of excessive deregulation of markets, particularly financial markets, that the majority of those same key players contributed to shaping. Let us look, first of all, at the demands of the UK and the Netherlands. These countries are concerned by the failure of the Icelandic banks because they had welcomed their subsidiaries and branches with open arms, even though their authorities had been at least partially alerted to the risks hanging over those banks. They are now demanding that Iceland pay them astronomical sums (more than €2.7 billion to the UK and over €1.3 billion to the Netherlands), plus interest at 5.5%. They consider that Iceland was responsible for guaranteeing the funds deposited with Icesave, the internet arm of Landsbanki that was offering unbeatable rates. The British and the Dutch decided to set that guarantee not at around €20,000 per deposit, as provided for in European and Icelandic legislation– which would already have been impossible for the Icelandic government, who quickly announced after nationalising its banks that it could only guarantee deposits made in Iceland itself – but at €50,000 to €100,000 per deposit, or even higher. Moreover, the measures that they are taking to get their way are scandalous. Indeed, at the very start of October, the UK began with a measure of extreme retaliation: freezing of the assets of not only Landsbanki but also Kaupthing Bank, which was totally unconnected to Icesave, using its anti-terrorism legislation. In doing so, the UK lumped the Icelandic people, their allies in NATO, together with the likes of organisations such as al-Qaeda... And since then, it seems to be using all of its influence to ensure that no international aid is really given to Iceland until its demands have been met. Indeed, Gordon Brown told his parliament that he is working “with the IMF” to establish how much it considered the UK was entitled to claim from Iceland. The IMF itself, meanwhile, not content with putting off making its loans available to Iceland, attached conditions to them that would seem outrageous, even in fiction. One example of this is the objective of bringing Iceland’s public deficit down to zero by 2013, a target that is impossible to achieve but that will nevertheless lead to huge cuts in the most essential areas of spending such as education, public health, social security, etc. Finally, on the whole, the attitude of the EU and other European countries has hardly been more commendable. The European Commission has clearly sided with the UK, as its President announced in November that there would be no European aid until the Icesave case had been resolved. It is true that Mr Barroso – too busy with his own campaign and terrified of upsetting his main source of support, London – is, as is often the case, in over his head. Even the Scandinavian countries, which heralded international solidarity, are conspicuous by their lack of reaction to the blackmailing of Iceland – which certainly puts the generosity of the loans they have promised into perspective. Mr Brown is wrong when he says that he and his government have no responsibility in the matter. Firstly, Mr Brown has a moral responsibility, having been one of the main proponents of this model which we can now see has gone up the spout. But he also has a responsibility in the sense that he cannot really hide behind the legal status of Icesave – which made it formally dependent on the Icelandic banking authorities – and say that the UK had neither the means nor the legitimacy to supervise its activities. Could anyone realistically think that a handful of people in Reykjavik could effectively control the activities of a bank in the heart of the City? Moreover, it should be noted that the European directives concerning financial conglomerates seem to suggest that EU member states that allow such establishments into their territories from third countries must ensure that they are subject to the same level of control by the authorities of the country of origin as that provided for by European legislation. So, was there perhaps a failure on the part of the British authorities on this point, which would not be particularly surprising considering the ‘performance’ of other English banks (which were in no way related to Iceland) during the financial crisis? If so, Mr Brown’s activism in relation to this small country might be motivated by a wish to appear powerful in the eyes of his electorate and taxpayers, whose own losses cannot be played down. Of course, the Icelandic institutions have a great deal of responsibility in this matter. But does that necessarily mean that the – also considerable – responsibility of the British authorities should be overlooked, dumping it all on the Icelandic people alone? Iceland, whose only remaining source of income is its exports, will certainly not be able to pay off those debts. The Icesave agreement, that the Icelandic parliament is expected to vote on soon, would burden Iceland with a debt equivalent to £700 billion for the UK or $5.6 trillion for the US. Nor will Iceland be able to clear its deficit in less than five years, when national deficits are rising more quickly than ever, even for the great powers – with the UK and the US once again providing two very good examples. Unless a radical new approach is adopted, Europe and the IMF are about to perform a major feat: reducing a country whose HDI had, in just a few decades, reached the highest level in the world, to the rank of a poor country... The consequence of this is that the Icelandic people, the majority of whom are highly qualified and multilingual and have strong work relationships with the Nordic countries where they can assimilate easily, are already starting to emigrate. In the end, neither the IMF, nor England or the Netherlands will be able to be reimbursed. Just a few tens of thousands of retired fishermen will be left in Iceland, along with its natural resources and a key geostrategic position at the mercy of the highest bidder – Russia, for example, might well find it attractive. Even so, there are alternative solutions. Indeed, the countries of the European Union could have devised a mechanism that would allow them to consider their own responsibilities in this situation, to improve the regulation of financial markets and even take on at least part of the debt – which European legislation in no way prohibits – for having failed in their banking supervision role. They could have offered to help Iceland, which obviously has no experience in the matter, with the investigation that it is seeking to conduct to try to understand what really happened and to thoroughly analyse the causes of this disaster. They could even have taken the opportunity to start their own debate about a European public prosecution service in charge of matters concerning transnational crime, particularly financial crime, which, once again, European legislation in no way precludes. The IMF and its Managing Director could also have taken this opportunity to thoroughly review the nature of the conditions that they attach to their loans. They could have made them more realistic, more focused on the long term, and made it possible to incorporate at least some social considerations. That would have been a first step towards true reform of multilateral institutions of this type and international solidarity procedures – and for Mr Strauss-Kahn himself, a chance to finally make his mark at the head of the IMF. Engaging in this debate would obviously require a lot of time and energy, and a great deal of vigilance, particularly in the European Parliament, where discussions should be organised over the coming months. However, the Swedish presidency of the EU does not seem to be in a hurry to improve regulation of the financial sectors, and the committees with an economic focus in the Parliament are, more than ever, dominated by liberals, particularly British liberals. Yet the tools and levers for real progress are there; a catastrophe like that in Iceland could finally raise a meaningful international response, instead of the irresponsible and cynical pressures that we can still see today. Eva Joly is an advisor for the criminal investigation into the failed Icelandic banks. She is a member of the European Parliament, a former Juge d'Instruction in France (the Elf Aquitaine investigation being her most famous case), and a former adviser to the Norwegian government on corruption. Mme Joly is also a founding member of The Tax Justice Network This article was published in French in Le Monde, August 1, 2009, in the Aftenposten (Norway), The Morgunbladid (lceland). Global Research has published the complete English text of the article sent to us by the author. An abridged and edited version was published in The Daily Telegraph.
Global Research Articles by Eva Joly

Criminals increasingly turning to debit card fraud, report concludes

Criminals increasingly turning to debit card fraud, report concludes

By Kevin Bissett (CP) – 3 days ago

CHARLOTTETOWN — Criminals in Canada have become increasingly adept at using the power of plastic, particularly debit cards, to commit financial fraud, an annual report released Friday has found.

The Criminal Intelligence Service of Canada, which represents nearly 380 law enforcement agencies across the country, concluded that organized crime groups have adapted to advances in technology aimed at preventing fraud.

"More activities now are with respect to debit cards as opposed to credit cards," RCMP Commissioner William Elliott, chairman of the CISC, told a news conference.

"We're seeing some positive developments within the marketplace with regard to chip and pin technology, but it is certainly a very serious problem."

Statistics provided by the Canadian Bankers Association shows combined annual losses due to debit and credit card fraud in Canada exceeded $500 million in 2008.

The bulk of credit card fraud losses are attributed to counterfeiting and fraudulent purchases, suggesting an increase in organized criminal operations, the report said.

Hackers are targeting online sites and using malware and keystroke-logger programs to steal credit card data - a trend likely to increase as online banking continues to grow in popularity, the report added.

"The criminal element responds to market demands and the realities of the changing environment," Elliott said.

"People now less and less use cash, and the criminal element migrates to that as well. There are shifts in the way criminal activity is carried out."

Federal Public Safety Minister Peter Van Loan acknowledged that combating financial crime has been a challenging task with constantly evolving technology.

"With changing technology, of course, we continue to always have challenges in keeping pace with crime, particularly financial and organized crime," Van Loan said in an interview.

"The providers of financial services ... are also very involved in improving that technology so that they can get better at it. We just have to continue to work on cracking down on that kind of crime."

Credit card fraud is especially prevalent in the urban areas of Quebec, Ontario and British Columbia, the report said.

It also found that there are about 750 criminal groups operating in Canada - a slight decline from last year.

"But we don't take that as any reason for us to lessen up on our efforts," Elliott said.

"We're having some successes, but the threats are very significant and we continue to need to work more effectively to combat them."

The report was released in Charlottetown at the start of the annual meeting of the Canadian Association of Chiefs of Police.

Copyright © 2009 The Canadian Press. All rights reserved.

Mafia suspected of ill-gotten green

Mafia suspected of ill-gotten green

Sicilian magistrates are investigating mafia ties to poorly-constructed wind farms in Italy. Concern about climate change is unlikely to be the gangsters' main motivation for investing in wind power. Stephen Beard reports.

Wind turbines at various stages of completion. (Ian Waldie/Getty Image)

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Bill Radke: Is the mafia going green? Prosecutors in Sicily are investigating a possible link between wind power and the mob. From the European Desk in London, Stephen Beard reports.

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Stephen Beard: Sicilian magistrates have launched a new investigation into organized crime. It's called "Operation Wind." They suspect that local Mafiosi have been building wind farms.

Concern about climate change is unlikely to be the gangsters' main motivation. The E.U. offers generous grants for clean energy projects, and Italy has the highest guaranteed prices for green electricity.

Mark Nicholls of Environment Finance Magazine:

Mark Nicholls: You can see how it might be attractive for the Mafia. Putting up wind farms depends on getting a nod from the local officials, who obviously can be influenced, bribed or blackmailed.

The Mob's apparent interest in wind power has not brought much environmental benefit. Several of the suspect wind farms are standing idle due to poor construction.

In London, this is Stephen Beard for Marketplace.