It's illegal to ask someone to send in "fees" for a loan!

Fake websites offering loans, or credit cards at "too good to be true" terms are taking advantage of the post-Christmas blues. If an unwary person responds to them, they will ask for "up-front" fees before issuing the loan, or credit card.

Bottom line is that it is ILLEGAL to ask for up-front fees in order to secure a credit-card, or a loan. If someone asks you to do this, it's a scam!

The person sending these fees never receives the loan, or credit card and becomes an advance fee loan fraud victim.

Annys Shin of the Washington Post writes:

The scam has been around for decades. Many consumers are not aware that it is illegal to charge lending fees in advance. People with poor or no credit are enticed by ads, direct mail solicitations or telemarketing calls promising fast money at favorable terms.

The Internet has made it easier for scam artists to find victims. Consumers are drawn in by legitimate-looking Web sites, complete with privacy policies, customer service numbers and online loan applications. Soon after filling out applications, the victims typically receive phone calls saying their loans were approved, but because of their credit ratings, they must first wire deposits or collateral.

Washington Post article, here.

Fake websites are nothing new - they are used in a lot of Internet criminal activities. The Artists Against 419 go after some of these websites, which may be viewed, here.

I just did a post the other day citing a FTC action against a payment processor, who was aiding some of these advance fee criminals, here.

And if you spot one of these scams, or have been a victim of one - I highly recommend you report it to the FTC, here.

2006 was the Year of Internet Crime - 2007 is predicted to be even worse

Have you noticed spam getting past your e-mail filters lately? You're not alone, experts are saying 2006 was the worst year ever in Internet crime - and it appears - security fixes are being defeated.

Brian Krebbs (Washington Post) is warning:

Few Internet security watchers believe 2007 will be any brighter for the millions of fraud-weary consumers already struggling to stay abreast of new computer security threats and avoiding clever scams when banking, shopping or just surfing online.

Washington Post story, here.

Brian cites that in October 90 percent of all e-mail received was spam. And most spam is a come-on for one fraud scheme, or another.

Since "security fixes" are being defeated pretty quickly by organized criminals - who allegedly hire their own computer security experts - the only viable recourse is to go after the source(s) with the intent to put the people behind it out of business.

Resources allocated to fund the investigation of financial crimes are (normally) not funded very well and the people investigating them are "overwhelmed." Maybe we should take some of the money being spent on developing "fixes" and use it to solve the real problem, which is a social one. Prevention seems to only work temporarily.

Security fixes are needed, but if we don't aggressively go after the sources, the criminals develop countermeasures and we have to start all over again.

After all - it seems that organized criminals and some say, terrorists are flocking to this activity because it's financially lucrative and a lot less dangerous than other criminal activities. Until we make it more dangerous for them, the problem is likely to keep growing.

John Bambenek (Assistant Politics Editor for Blogcritics and academic professional for University of Illinois) recently wrote a compelling essay about this subject, here.

Here is a previous post, I wrote about why we are approaching this problem the wrong way:

Are We Addressing Cyber Crime from the Wrong End

Fraudulent Gift Cheque Update from American Express

Since September, I've been writing about counterfeit American Express Gift Cheques showing up in a variety of Internet fraud schemes.

Readers have reported receiving these items primarily as a result of work-at-home scams, but they can show up in a variety of Internet fraud come-ons. They might also show up in secret shopper, romance, lottery and auction scams.

The fraudsters want you to cash these counterfeit gift cheques and send (normally wire) the money back to them. When they are discovered to be fraudulent - you end up taking the "rap" and they disappear in an "electronic mist."

Several readers reported being asked to wire the money to Nigeria and the United Kingdom. I recently wrote a post based on large amounts of counterfeit financial instruments being found at airports in the United Kingdom (allegedly from Nigeria), here.

Most of the counterfeit gift cheques, seen thus far, have been in the $500.00, or $1000.00 denominations. Note American Express doesn't issue gift cheques for more than $100.00.

American Express states in their bulletin that gift cheques are safe when verified prior to negotiating them. Anyone can call them and verify an item at 1-800-525-7641.

Unfortunately, a lot of people don't verify these items. Many people have also deposited them, initially received credit, and then had their accounts garnished when the items returned.

I've also had a couple of people write me and say they were arrested for trying to cash them. Presenting counterfeit financial instruments is considered a crime in most places. It will be up to the person arrested to prove they were a victim of a scam and not involved, intentionally.

American Express gift cheque bulletin, here.

Listed below are the posts, I've written since September, along with some scary comments from readers:

Counterfeit American Express Gift Cheques

Counterfeit American Express Gift Cheques (Update)

American Express Gift Cheques Being Circulated in Internet Scams

American Express gift cheques aren't the only items that have been counterfeited and passed via Internet scams. In the past we've seen a lot of Postal Money Orders and Travelers Express (MoneyGram) money orders being counterfeited, also.

Is Spending $550 Billion on RFID Going to Protect Us?

RFID is making the news again and some prominent politicians are saying we need take a hard look at it before we spend $550 billion (11 billion for each State) implementing it.

RFID is being implemented, or being recomended for implementation (worldwide) to verify a person's identity electronically when identification is presented. And there are people claiming it can already be compromised, or that it is just a matter of time before it will be.

EWeek wrote an interesting article about this about why two of our leaders don't feel RFID is safe, or a wise investment of taxpayer resources:

Sen. Daniel Akaka, D-Hawaii, and Sen. John Sununu, R-N.H., said they take issue with the technological implications of the act.

Sen. Akaka said that if the proposed national database were to be breached it would "provide one-stop access to virtually all information necessary to commit identity theft," and pointed to a study by the National Governors Association estimating that states would have to come up with a total of about $11 billion each to implement the necessary infrastructure to verify information electronically. Akaka will chair the Senate Homeland Security and Governmental Affairs subcommittee the group that has jurisdiction over the relationship between the federal and state governments in 2007.

The Emerging Applications and Technology Subcommittee, part of the Data Privacy and Integrity Committee that advises DHS, toned down its harsh criticisms of RFID technology used to identify individuals referring to the e-passport and PASScard ID card in a report released Dec. 13.

EWeek story, here.

And in another story a few thousand miles away from Washington, an Aussie hacker is claiming he can already hack Australian and British passports.

Sydney Morning Herald story, here.

Technology, including RFID is making people billions of dollars. Unfortunately, there is growing evidence that RFID isn't 100 percent secure. If RFID is easily hacked, there will be other (or maybe the same people) making a lot of money selling "security" to protect people from it.

Tracking inventory in Walmart's supply chain is one thing, but tracking humans is something that needs to be thought out, carefully. And $550 billion is a huge expenditure of the taxpayer's hard-earned money! We need to ensure this is a wise investment and that that individual privacy doesn't suffer because of it.

You can read Senator Akaka's press release on this subject, here.

And to go to Senator Sununu's page (couldn't find a release about RFID yet), click here.

For my previous posts on this subject, click here.

Colorado Identity Theft Victim Shares Her Personal Feelings on the Immigration Raids

When I saw the recent immigration raids in Colorado and all the "media spin" on them, I had a lot of mixed feelings about the issue.

Then I came upon an interesting editorial from an actual identity theft victim.

The Nothern Colorado Tribune published a story by Teresa Myer, identity theft victim and free-lance writer, which said:

As I learned of the immigration raids taking place throughout the country Tuesday, I wondered if one of those arrested was me.

Since 2001, someone has been using my name and Social Security number to gain employment as a seasonal worker.

In June 2004, I received a letter from the Internal Revenue Service, stating I owed more than $1,200 in taxes for "unreported income." The businesses that reported that I had been working for them included a pecan sorting facility in Deming, N.M., and several ConAgra facilities in Texas, Colorado and New Mexico.

Teresa's story goes on to express the long-term problems identity theft victims face, here.

The reason I had a mixed feelings about the immigration raids was because I have nothing against people trying to realize the American dream, but on the other hand, illegal immigration is becoming a big problem.

The problem is that an organized criminal element seems to be controlling their access to our dream and there are "greedy businesses," who benefit financially by not paying a "fair wage." There is also a substantial "social cost," when government services are being used to provide benefits at everyone's expense. And the cost has gotten so "high," some government programs are literally going "bankrupt."

Perhaps, if the "greedy businesses," were forced to pay for these benefits, hiring illegal aliens wouldn't be so profitable?

If you would like to read more about organized criminals providing other people's identities to fuel this problem, I wrote this post a few months ago:

Mexican Organized Crime Ring is Mass Producing Fake Documents ...

Consumers Union Calls for Congress to Protect People's Personal Information

The Consumers Union is calling for voters to let their elected officials know they are concerned about identity theft.

Here are what the Consumers Union considers to be the key issues:

In every state, you should be able to place a "security freeze" on your credit file so thieves can't open new accounts in your good name. Companies and agencies should be required to notify you when the security of your private information has been breached. If lawmakers are serious about making us more secure, this should be the first thing they do when they return to Washington. Help us send this clear message now to your Congressional Representative and Senators.

If you are concerned about this issue, you can add your thoughts by sending a message to Congress, here.

The last time this issue came up before the election - a bill was being pushed through. Here is more information on it and what I wrote about it:

Don't Allow HR 3997 to Take Away Rights from Identity Theft Victims

This bill is still pending - and if passed in it's current version - it threatens to mute State laws already enacted to protect people from identity theft.