MyChargeBack cut its teeth on the most notorious scams on the internet — binary options, forex and contracts for difference (CFDs). If the standard for measuring the toxicity of a scam is the amount of money it steals from consumers, these three win hands down. According to estimates by law enforcement authorities in a number of different countries, unlicensed and unregulated binary options sites alone have swindled innocent investors out of anywhere between $5 and $10 billion a year.
But these online criminal enterprises are by no means alone. The same unsavory tactics they employ are used by a virtually endless parade of scammers in a virtually endless number of other scams. We’ll only be able to skim the surface before we reach the end of this blog. Nonetheless, the examples we will cite here will serve to impress upon you the versatility, and even ingenuity, of the scamming business.
Work from Home Scams
There are a wide variety of work from home scams, but the most common fall into four categories: Upfront payments, money laundering, reshipping, and pyramid schemes. The most infamous example may be Herbalife, which was ultimately fined $200 million by the U.S. Federal Trade Commission in 2016.
Also known as pyramid schemes, they may be as old as the hills, but became permanently associated with Charles Ponzi, who perfected the model by buying up postal reply coupons following World War I. But eventually the market for them dried up. The Ponzi model looks like a pyramid because decreasing numbers of new investors are added on top of existing ones until the market collapses. Think Bernie Madoff.
People contacted by tax scammers will either be told they owe money to the tax authority or they’re due a refund or rebate. Either way, the scammer will likely ask the victim to go online to a fake website disguised to look like the real thing and enter his or her contact details and a charge card number. Victims will soon see their card has been used to withdraw large amount of money.
iTunes Gift Card Scams
Yes, you read that right. A scammer will contact you and demand payment of a supposed unpaid debt. But instead of paying by credit card you’ll be asked to send the equivalent amount in iTunes gift cards. Other such scammers have by now branched out and demand payment using PayPal, Western Union and MoneyGram.
Even by the ignoble standards of the scamming industry, charity scams are truly despicable. They’re a permanent fixture on the internet, but spring up like mushrooms after a major disaster. In 2005, following Hurricane Katrina, for example, the Red Cross asked the FBI to investigate 15 phony lookalike websites. A fake Salvation Army website collected almost $50,000 in donations.
Dating Site Scams
It’s well known that a lot of dating sites are filled with fake profiles of gorgeous people (whose photos are generally swiped from other internet sites) in order to excite you into signing up. If you send a message you won’t get a response. But that’s small change. Real dating site scams lurks behind fake profiles of gorgeous people (whose photos are also swiped from other internet sites) posted by scammers who will respond. Message them and they’ll strike up an online exchange. Soon you’ll be told they’re in love and anxious to meet up but (alas) they’re serving with the army in Afghanistan or unemployed and residing in Ukraine or divorced single parents struggling to make ends meet and can’t leave their kids. But if you send a couple of thousand dollars by wire they’ll be on the next plane. Once they have the money their online profiles will disappear and you’ll be left holding the bag.
Bottom line: When your money is at stake, assume nothing and always verify that the offer you’re responding to is legitimate. If you can’t tell, contact MyChargeBack for a free consultation, and we’ll let you know.