Saturday, May 20, 2006

Counterfeit Postal Money Orders Showing Up in IScams Again

If someone you know over the Internet asks you to cash a money order -- or offers it you as a form of payment -- it's probably best to remember the old legal term "Caveat emptor, or "Buyer Beware."

As reported by readers and other sources, the Internet market is (again) being flooded with counterfeit U.S. Postal Money Orders. After not being around for awhile, these items are raising their ugly head again.

The U.S. Postal Inspectors have speculated in the past that these items are being counterfeited in Western Africa and Eastern Europe. For an interesting article from the NY Times about this, link here.

This is probably the best article, I've read on this subject.

The Postal Inspectors also have a page on how to identify counterfeit money orders.

Yes, counterfeit Postal Money Orders are making a come back, but the core activity has never stopped. The Internet is full of counterfeit methods of payment and the best way to avoid becoming a victim is to recognize the social hook the criminal uses, or "something too good to be true."

While we thought counterfeit Postal Money Orders were a thing of the past, they were replaced with counterfeit items from other money order issuers and legitimate money orders, which were altered.

Of course, there are also those counterfeit cashiers checks, which have been done from so many different financial institutions, it seems impossible to keep up with.

Internet fraud artists are constantly mutating their methods to confuse their victims.

In a recent post on Internet scams, I wrote:

"Thus far, these money orders are showing up mostly in Advance fee fraud (419) scams.
The Advance Fee scam is where a ruse is used to get a victim to send them money (nowadays normally wire-transfer) in anticipation of riches (or sometimes love) to come. The best known is the "Nigerian Letter," but the activity has mutated into romance, lottery, auction, check cashing, work at home and reshipping (as mentioned below) scams.
In a lot of the more recent Advance Fee activity, the victim is tricked into involving themselves in criminal activity, whether it be forwarding stolen merchandise, or negotiating bogus financial transactions and sending the funds elsewhere."

When someone from a Internet source offers free money, romance, or to pay more than something is worth - you are probably dealing with a fraudster.

Anyone, who does this for them, ends up with a huge loss. Even if you can convince the authorities you are a victim, the civil responsibility will still fall on you.

To make matters worse, a lot of petty criminals are getting in on the action, also. They get on the Internet, impersonate victims, get the instruments and then cash them with no intention of sending money back to the crook that sent them the item.

I predict, it's going to get harder and harder to convince the authorities that the person cashing them is totally innocent. Recently - in a "Judge Judy" episode - her "honor" chewed a defendant up and down for cashing a bunch of counterfeit money orders (through her sister's account) and claiming to be "totally innocent." In less than a minute, Judge Judy was easily able to establish that this victim had benefited financially from her transaction and had in fact never wired any money anywhere.

Best bet for all of this is to learn how to spot this activity and when we do, run away from it as fast as we can!

Of course, reporting it and making other's aware can help, also.

India Seeing a Problem with Cloned Payment Cards

Skimming, cloning, counterfeiting of debit/credit cards (lately debit seems to be preferred) has been a major problem in North America and Europe. India (a new giant in the technology field) is now seeing this type of criminal activity hit home.

IBN is reporting:

One swipe is all it takes. When you hand over your credit card to make a payment in a shop or insert it into an Automated Teller Machine (ATM), you could run the risk of being the next victim of an international crime called "skimming".

And this could drain your account of all your money. Skimming is the latest fraud that has hit India hard.

The cyber crime cell of the Chennai Police recently arrested four people for withdrawing money from ATMs through forged credit cards. The police recovered 160 fake international credit cards through which they had planned to withdraw Rs 15 crore.

Link, here.

Interestingly enough, the authorities are blaming this activity as being tied into a gang from the UK, which uses a device (easily available on the Internet) known as a "skimmer."

If this activity continues to grow in India, we are likely to see "skimming devices" attached to ATM machines, likes the ones, reported in other countries.

Card skimming is growing at alarming rates, seems to be highly organized and now the evidence shows that it is becoming a global problem. It will continue to grow as long as the cards can be easily counterfeited with legal devices, which anyone can purchase.

Here is an earlier post on why technology crimes have become too easy:

Are We Addressing Cyber Crime from the Wrong End

Sunday, May 14, 2006

Mounties Lack Resources to Fight Organized Crime and Cite Ties to Terrorism

The Canadian Press is reporting:

The head of the RCMP says his agency is increasingly concerned about evidence that organized crime groups are helping to fund terrorist gangs.

Giuliano Zaccardelli's observations Monday may come as a shock to some, but not to those who monitor trends in law enforcement.
Almost every conceivable type of organized crime helps to finance terrorist groups whose chief goal is killing Westerners, said one expert in the field.
That can mean the proceeds from hashish baggies being peddled on street corners, cocaine trafficking, prostitution, pick-pocketing, knock-off designer items and credit card fraud.
Zaccardelli wasn't quite that specific during his appearance before a Senate committee Monday. But he said the evidence is clear, and continually mounting.
Here are some specific examples backing up this claim made by John Thompson of the Mackenzie Institute, which is a Toronto Think Group:
Almost all terrorist groups around the world use organized crime to pay for their operations.
Al-Qaeda and Osama bin Laden are no different.
The bombers who blew up Madrid's rail system in 2004, injuring 192 people and wounded 2,050, financed their operation by selling hashish.
Hashish from the Middle East, heroin from...Afghanistan and Pakistan, cocaine, it all at some point goes through the hands of terrorists on its way down to the street.
The basic training for al-Qaeda recruits includes at least four major components: handling firearms, making bombs, ideological reinforcement, and supporting yourself through credit-card fraud.
He points to ex-Montrealer Ahmed Ressam, who was convicted of trying to blow up Los Angeles airport on New Year's Eve 1999.
Ressam also planned to set up a side business to help fund his terrorist jihad.
"He was going to try and set up a shop so they could access people's credit cards and start counterfeiting them.''

Link to full story, here.

The saddest part of all this is that the RCMP, who are known for "getting their man" are admitting they only have the resources to address about one-third of this activity.

For another article by the National Post on current RCMP resources and their border problem, link here.

Perhaps, we in the United States should take notice - while we focus on the border to the South - here is another reason, "We Can No Longer Allow Criminals to Control Our Borders."

It seems the Canadians are coming to the same conclusion.

Here is a previous post, I did on this problem:

Do Financial Crimes and Internet Fraud Fund Terrorism

Chip and PIN, Another Chapter in the Attack on Debit Cards

The Daily Mail is reporting that Lloyds is admitting that there is a flaw in chip and PIN technology. The flaw is that the cards can still be remotely encoded and used in ATM's that accept older versions of debit cards.

The article states that the reason criminals are using the cards in other countries is because it takes longer for transactions to post and therefore escapes the "fraud detection" systems already in place.

Also contained in the article are a lot of reader comments, which are very enlightening.

The bottom line is that chip and PIN works, but only in machines that are set up to deal with the technology. This means that until we can create a "global" effort to curtail debit card fraud, newer technologies are going to have a limited effect.

Link to the article by the Daily Mail, here.

As a "Yank," I'm impressed with the fact that Lloyds is being up front with the problem. It's also refreshing to see the mainstream media working with the banks to get the word out.

Financial institutions in the United States haven't been as forthcoming with information. Even to this day, they still aren't admitting to the root causes of recent debit card breaches over here.

They might claim "zero liability" and offer free "identity theft monitoring," but they are in the business of making money. The cost of all of this is ultimately passed on to the customer.

Even though, there were many in the press and from blogs like Boing Boing that were getting the word out, the sources seemed to have either been victims, or confidential. I keep hoping to discover that the reason for this was an "investigation" that put a lot of the culprits -- where they belong -- or behind bars.

The bottom line is that the criminals seem to be very aware of the flaws that allow this to happen. Being up front about the flaws they are exploiting only serves to protect the public, who through their awareness, might spot the activity and report it.

Awareness might also help people from becoming victims, which is the best argument out there for laws forcing this activity to be "disclosed" to the public.