Your ‘Secret Sister’ could be a pyramid scheme operator

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Who doesn’t love getting gifts during the holidays? Sharing presents with friends and family is one of the highlights of the season. Unfortunately, scammers are once again looking to take advantage of our love of gifting—and receiving—with the “secret sister” scam.  

We are seeing this everywhere on social media right now. The scheme usually begins with a festive Facebook post or a text message or email encouraging friends to join in on the giving by sending “just one” gift (often a book, bottle of wine, or a gift card) to a “secret sister.” The friendly message guarantees participants will receive at least one (and maybe dozens) of gifts in return. These messages may also have phrases like “happy mail,” “for the good of the sisterhood,” “holiday gift exchange,” or similar wording.  

To keep the “secret sister” chain going, the message invites the recipient to share the invitation with friends and family by entering personal information (e.g., name, mailing address, email address) and the contact information of the people you hope to recruit into a list online. People who send you these messages may not even know it’s a scam. 

In reality, the only people getting a gift in this scheme are scammers. By supplying personal information, even information as seemingly innocuous as name and mailing address, you could increase your risk of identity fraud. And if you mail a gift to someone you don’t know, chances are that it will just go to a scammer looking to enrich themselves, not someone you know. 

The “secret sister” scam is also a pyramid scheme. Pyramid schemes are illegal because they are based on efforts to recruit new people into the scheme, not actually sell or exchange anything of value. Eventually, all pyramid schemes collapse when they run out of new recruits, leaving the vast majority of those who joined with nothing. These schemes may also violate state anti-gambling laws since they can resemble illegal chain letters.  

While it may seem like you’re just doing something fun with people you know and trust, by circulating these messages you may be helping to perpetuate an illegal scheme. If you or someone you know receives a “secret sister” message, here are some tips to stay safe and avoid being a victim: 

  • Ignore the message. The “secret sister” scam works because people engage with it and share it with friends and family. Don’t be another link in the chain. If someone you know sent you the invitation, let them know that it’s a scam. Feel free to share a link to this article! 
  • Flag the message. Most social media platforms, allow users to report suspicious messages. On Facebook and Instagram, for example, there is usually a button with three dots at the top of messages that allow for a post to be reported as suspicious. 
  • Don’t share personal information. Providing personal information to someone you do not know can increase the risk of identity fraud, even if it’s something as seemingly trivial as a name and email address. 

If you suspect that you or someone you know has become a victim of the “secret sister” scam or any other fraud, report it at once. You can file a complaint at Fraud.org via our online complaint form. We’ll share your complaint with our network of law enforcement and consumer protection agency partners who can investigate and help put fraudsters behind bars.

Looking for gig economy work to help make ends meet? Don’t be a scammer’s next payday!

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With large swaths of the economy still shut down or operating at limited capacity due to the coronavirus, millions of workers are turning to gig economy apps like Instacart, Uber, Lyft, TaskRabbit, DoorDash, and others to help make ends meet. While these apps can be great for finding flexible job opportunities, their increasing popularity is attracting scammers looking to take advantage of gig workers and their customers.

We’re hearing about two types of gig economy scams.

Instacart premium job scam

Instacart is a service that connects consumers with workers (confusingly called “shoppers”) who are paid to do the shopping on their behalf for a fee, plus tips. Workers scan the app for jobs they’d like to do (called “batches”), claim them, then do the shopping. Bigger batches with more items are generally more expensive totals and, in theory, result in bigger tips for the shopper fulfilling them. This can make competition for attractive batches fierce for the thousands of shoppers who have flooded the app since the pandemic began.

Seeing an opportunity, scammers have begun advertising on social media and elsewhere that they can get shoppers access to premium jobs with big tips, in exchange for an upfront fee.

The complaint an Instacart shopper from Florida sent us is typical of these scams:

“I’m a shopper for Instacart trying to make some income during this pandemic when the economy has been turned upside down and many have lost their jobs and have turned to alternative jobs like food delivery, grocery shoppers, etc. As a result, there is a lot more competition to get orders in applications like Instacart,” she wrote. She saw a website promising better batches for higher pay to Instacart shoppers using the service, in exchange for a $200 upfront fee. “After payment communication on their side stopped and I requested a refund and all has been ignored,” she wrote. “I was robbed [of] $200.”

Tip: If someone promises to deliver you premium Instacart batches in exchange for a fee, that’s a red flag. At best, they’re violating Instacart’s terms of service. At worst, it’s a scam designed to rob you of your money.

Cash out account phishing leads to lost pay

Many gig economy apps offer their workers a service where their earnings can be cashed out and deposited into a bank account or prepaid debit card upon request. Scammers have tried to take advantage of this by calling gig economy workers posing as a representative of the app operator. The imposter asks the worker to click on a link in a text message or email that is sent to them (for reasons such as “verification” or “security”). The link then takes the worker to a legitimate-looking phishing website, where they are tricked into providing their login credentials.

Once the scammer gets that information, they can change the bank account that the worker’s pay goes to and cash out the worker’s earnings elsewhere. Recognizing this scam, gig economy apps like GrubHub and Doordash have instituted waiting periods when bank account information has been changed. However, this can still leave workers who don’t cash out often at risk of losing their hard-earned pay.

Tip: Gig economy apps will NEVER call or text you asking for your login credentials. If someone does so, it’s a scam. If two-factor authentication is available for the app you are using, turn it on. And if you think your account may have been compromised, report it immediately to the app’s support team.

If you suspect that you have become a victim, report it immediately. You can file a complaint at Fraud.org via our secure online complaint form. We’ll share your complaint with our network of law enforcement and consumer protection agency partners who can investigate and help put fraudsters behind bars.

Read our other Fraud Alerts here.

Scammers capitalizing on online shopping boom with wave of package delivery fraud

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The COVID-19 pandemic is dramatically altering how millions of American consumers shop, with online sales skyrocketing thanks to consumers’ concerns about the health risks of shopping in brick and mortar stores. According to the United States Census Bureau, U.S. retail e-commerce reached $211.5 billion in the second quarter of 2020, up 31.8 percent from the first quarter and 44.5 percent year-over-year. With delivery vans buzzing around neighborhoods as never before, scammers are looking to capitalize on this trend.

According to reports from the Federal Trade Commission and the Better Business Bureau, scammers are increasing their use of the fake package delivery scam. In a typical scam of this type, consumers receive a text message, email, or phone call informing them that they have a package waiting for them or that the delivery service (e.g., FedEx, UPS, or USPS) was unable to deliver a package.

To get the package delivered, the consumer is asked to click on a link and “verify” personal information or supply payment information (like a credit card or bank routing number) to reschedule the delivery. In other cases, the scammers’ messages may direct recipients to an authentic-looking website (for example, a phishing site that looks like an Amazon customer satisfaction survey). Consumers who fall for this scam can end up inadvertently signing up for difficult-to-cancel subscription services.

These delivery messages can be quite convincing—but they are fake and generated by scammers trying to extract valuable information from consumers. As consumers come to rely more on e-commerce for day-to-day needs, they may be more likely to assume these messages are legitimate. However, with a little knowledge, you can avoid being the next victim of these swindles.

Here are the steps you can take to reduce your risk:

  1. Do not click on any links or attachments in text messages or emails claiming to be from a package delivery service. If you receive a phone call from someone claiming to be with a package delivery service, hang up. Do not press “1” (or any other number) to be connected to a representative.
  2. If you do click on a suspicious link, do not supply any personal information such as your Social Security number, mailing address, credit card number, or bank account routing information, even if it is just to “verify” your identity.
  3. Do not be alarmed by language in text messages, emails, or phone calls that claim your response is “urgent.” This is a common tactic that scammers use to get you to act before thinking.
  4. If you are unsure whether you have a package waiting for you, go the delivery service’s website (e.g., amazon.com, usps.com, or ups.com) and enter the tracking number there.
  5. If you receive a spam text message, forward it to short code 7726, which sends the message to the GSMA’s Spam Reporting Service. This is a service run by the major U.S. wireless carriers to help identity trends in scam texts. You can also report these scams via our secure online complaint form at Fraud.org.

If you suspect that you have become a victim, report it immediately. You can file a complaint at Fraud.org via our secure online complaint form. We’ll share your complaint with our network of law enforcement and consumer protection agency partners who can investigate and help put fraudsters behind bars.

Read our other Fraud Alerts here.

Work-at-home

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The ad says you can make lots of money working from the comfort of your home. But if this were true, wouldn’t we all be working at home?

Stay safe. Be Informed.

  • Know who you’re dealing with. The company may not be offering to employ you directly, only to sell you training and materials and to find customers for your work.
  • Don’t believe that you can make big profits easily. Operating a home-based business is just like any other business—it requires hard work, skill, good products or services, and time to make a profit.
  • Get all the details before you pay. A legitimate company will be happy to give you information about exactly what you will be doing and for whom.
  • Find out if there is really a market for your work. Claims that there are customers for work such as medical billing and craft making may not be true. If the company says it has customers waiting, ask who they are and contact them to confirm. You can also ask likely customers in your area (such as doctors for medical billing services) if they actually employ people to do that work from home.
  • Get references for other people who are doing the work. Ask them if the company kept its promises.
  • Be aware of legal requirements. To do some types of work, such as medical billing, you may need a license or certificate. Check with your state attorney general’s office. Ask your local zoning board if there are any restrictions on operating a business from your home. Some types of work cannot be done at home under federal law. Look for the nearest U.S. Department of Labor in the government listings of your phone book.
  • Know the refund policy. If you have to buy equipment or supplies, ask whether and under what circumstances you can return them for a refund.
  • Beware of the old “envelope stuffing” scheme. In this classic scam, instead of getting materials to send out on behalf of a company, you get instructions to place an ad like the one you saw, asking people to send you money for information about working at home. This is an illegal pyramid scheme because there is no real product or service being offered. You won’t get rich, and you could be prosecuted for fraud.
  • Be wary of offers to send you an “advance” on your “pay.” Some con artists use this ploy to build trust and get money from your bank. They send you a check for part of your first month’s “pay.” You deposit it, and the bank tells you the check has cleared because the normal time has passed to be notified that checks have bounced. Then the crook contacts you to say that you were mistakenly paid the wrong amount or that you need to return a portion of the payment for some other reason. After you send the money back, the check that you deposited finally bounces because it turned out to be an elaborate fake.

Find Fraud Alerts related to this scam here.

Pyramid schemes

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The pitch is that you will make money by paying to participate in the program and recruiting others to join. But if it’s really a pyramid, you and your friends will lose money, not make it.

Stay safe. Be Informed.

  • Plans that promise profits mainly for recruiting new members are illegal pyramid schemes. In legitimate multilevel marketing plans, profits come primarily from selling goods and services to consumers.
  • Be aware that some pyramids are disguised as “gifting clubs.” New recruits give money to current members with the promise that they will receive money from future recruits.
  • Know that all pyramids are doomed to collapse. That’s because it’s impossible to keep on getting fresh recruits who will pay to participate.
  • Legitimate multilevel marketing plans only succeed if they offer products or services that customers want. All successful businesses depend on repeat sales. If there isn’t constant demand for the products or services, the business will fail.
  • Sales to other distributors don’t count. Legitimate multilevel marketing plans aren’t based on sales to distributors. Profits should come from sales that you and any distributors under you make to the end-users.
  • Be wary of big earnings claims. No one can guarantee how much you’ll make. That depends on how hard you work and whether consumers like your products or services. Many people who work in multilevel marketing do it part-time to supplement their other income.
  • Check it out before you commit. Get all details in writing, and contact your state or local consumer protection agency for advice. In some states, multilevel marketing companies must register with the government and comply with other requirements.
  • Don’t buy more supplies than you need. Some fraudulent companies try to force distributors to pay for more products than they can reasonably sell.

Find Fraud Alerts related to this scam here.

Investment scams

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Whether you have a little money or a lot, you’d probably like to have more to “feather your nest.” But your money could fly away if you get caught in an investment scam.

Stay safe. Be Informed.

  • Don’t believe claims that there is no risk. There is always risk in investments, and no one but a con artist will tell you otherwise. Know the risk before you invest.
  • Beware of promises that you’ll make big profits fast. No one can accurately predict how an investment will do. Often the investments that promise the most pay-off are also the most risky.
  • Get the details in writing. Legitimate companies will be happy to give you all the information you need.
  • Don’t agree to anything on the spot. Pressure to act immediately is a danger sign of fraud.
  • Understand your investments. Do you know the difference between stocks and bonds, margin accounts and cash accounts, options and futures, mutual funds and certificates of deposit? If not, do your homework before you invest.
  • Don’t act on testimonials from strangers. Someone who appears to want to share a friendly tip about a great investment opportunity may actually be a con artist trying to lure you into an investment scam.
  • Be especially wary of investments in commodities. Crooks often promise that the value of investments in coins, precious metals, artwork, oil leases, gemstones, and other commodities will rise. The truth is that the value of these types of investments can go up or down significantly.
  • Steer clear of “offshore investments.” These are often promoted as a way to avoid taxes. Actually, you are still liable for taxes, and the investments themselves are usually very risky.
  • Be cautious about emails for investments. Many unsolicited emails are fraudulent.
  • Take the time to check out investment offers. A good place to start is with your state securities regulator. Other resources for information to help you make wise investment decisions include: U.S. Securities and Excahnge Commission, 800- 732-0330; the North American Securities Administrators Association, 202-737-0900; and the National Futures Association (for investments in commodities), 800-621-3570 (in Illinois, call 312-781-1467).

Find Fraud Alerts related to this scam here.

Fake check scams

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If someone you don’t know wants to pay you by check but wants you to wire some of the money back, beware! It’s a scam that could cost you thousands of dollars.

Stay safe. Be Informed.

  • There are many variations of the fake check scam. It could start with someone offering to buy something you advertised, pay you to do work at home, give you an “advance” on a sweepstakes you’ve supposedly won, or pay the first installment on the millions that you’ll receive for agreeing to have money in a foreign country transferred to your bank account for safekeeping. Whatever the pitch, the person may sound quite believable.

  • Fake check scammers hunt for victims. They scan newspaper and online advertisements for people listing items for sale, and check postings on online job sites from people seeking employment. They place their own ads with phone numbers or email addresses for people to contact them. They buy “sucker lists” on the black market which has sensitive information of people who have been previously scammed. And they call or send emails or faxes to people randomly, knowing that some will take the bait.

  • They often claim to be in another country. The scammers say it’s too difficult and complicated to send you the money directly from their country, so they’ll arrange for someone in the U.S. to send you a check.

  • They tell you to wire money to them after you’ve deposited the check. If you’re selling something, they say they’ll pay you by having someone in the U.S. who owes them money send you a check. It will be for more than the sale price; you deposit the check, keep what you’re owed, and wire the rest to them. If it’s part of a work-at-home scheme, they may claim that you’ll be processing checks from their “clients.” You deposit the checks and then wire them the money minus your “pay.” Or they may send you a check for more than your pay “by mistake” and ask you to wire them the excess. In the sweepstakes and foreign money offer variations of the scam, they tell you to wire them money for taxes, customs, bonding, processing, legal fees, or other expenses that must be paid before you can get the rest of the money.

  • The checks are fake but they look real. In fact, they look so real that even bank tellers may be fooled. Some are phony cashiers checks, others look like they’re from legitimate business accounts. The companies whose names appear may be real, but someone has dummied up the checks without their knowledge.

  • You don’t have to wait long to use the money, but that doesn’t mean the check is good.Under federal law, banks have to make the funds you deposit available quickly–usually within one to five days, depending on the type of check. But just because you can withdraw the money doesn’t mean the check is good, even if it’s a cashier’s check. It can take weeks for the forgery to be discovered and the check to bounce.

  • You are responsible for the checks you deposit. That’s because you’re in the best position to determine the risk–you’re the one dealing directly with the person who is arranging for the check to be sent to you. When a check bounces, the bank deducts the amount that was originally credited to your account. If there isn’t enough to cover it, the bank may be able to take money from other accounts you have at that institution, or sue you to recover the funds. In some cases, law enforcement authorities could bring charges against the victims because it may look like they were involved in the scam and knew the check was counterfeit.

  • There is no legitimate reason for someone who is giving you money to ask you to wire money back. If a stranger wants to pay you for something, insist on a cashiers check for the exact amount, preferably from a local bank or a bank that has a branch in your area.

Want to learn more? Go to www.consumerfed.org/fakecheckscams to read CFA’s Don’t Become a Target brochure, watch the funny videos about sweepstakes/lottery and work-at-home fake check scams, and check out the other materials on the Web site. Visit NCL’s www.fakechecks.org, where you can take a quiz to see how well you can spot this fraud, send an ecard to warn other people, and find information to help you and people you care about avoid losing money to fake check scams.

Find Fraud Alerts related to this scam here.

Bogus car advertising

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Drive for long enough in any good-sized city, and you’re likely to see a car that’s been wrapped in an advertisement. Unfortunately, scammers have started to catch on to the popularity of bogus work opportunities on car ads.

Stay safe. Be Informed.

For businesses, these ads are a unique marketing opportunity. For consumers, getting paid to turn their car into a rolling advertisement can be a way to effortlessly earn some extra money. The deal is so appealing that waiting lists are reportedly years-long and advertisers get to be choosy about the types of cars they work with and the number of miles drivers must commit to.

NCL’s Fraud Center has received a number of complaints from consumers who were the victim of a variation on the fake check work-at-home scam involving these ads. (For more on fake check scams, visit fakechecks.org.)

Jennifer P. from Massachusetts told us how the scam goes down. She saw an ad on Craigslist that falsely claimed Monster Energy Drink was looking for people to advertise on their cars, offering a $300 payment in return. After she emailed the contact, she was sent a check made out for $1,900, allegedly to cover the costs of both installing the advertisement and Jennifer’s payment. She was instructed to cash the check, take out her payment and wire the remainder to the “support team” for the advertising campaign. Unfortunately for Jennifer, after she wired the money, she found out that the check was a fake and was left owing her bank $1,900. And, of course, the crooks got away with cash from the wire transfer.

NCL’s Fraud Center has received similar complaints from consumers allegedly asked to participate in fake Red Bull Energy Drink advertising program and numerous reports of the scam have emerged on message boards online since August 2013.

Consumers should never have to pay funds from their personal checking accounts to participate in these advertising campaigns. Any request to wire money to someone you don’t know should be considered a major red flag. Consumers who have been approached by or been a victim of these scammers should report it to NCL’s Fraud Center.

Find Fraud Alerts related to this scam here.

Travel fraud

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The thought of going to a warm vacation spot in the winter or visiting a foreign country is exciting. But what seems like a great deal may turn out to be a bad trip.

Stay safe. Be Informed.

  • Be skeptical of offers for “free” trips. Airlines and other well-known companies sometimes operate contests for travel prizes. However, there are also companies that offer “free” trips to try to lure people into buying their products or services. It’s never “free” if you have to pay something.

  • Know exactly what’s included. A “free” or incredibly cheap trip may have hidden costs. For instance, the cruise may be free, but you have to pay to fly to the departure point and stay in a hotel at your own expense. Or you may have to endure a long, high-pressure sales pitch for a timeshare or travel club membership as part of the trip.

  • Realize that the deal may not be as good as you think. You may find that a travel offer requires you to make reservations through a specific company and that the costs are higher than they would be if you used your own travel agent or made the arrangements yourself. Or the offer may be valid only if you bring a companion along at full fare.

  • Be aware of restrictions. Often the best travel deals are only available for off-peak times, not during school vacations, holidays or other popular travel dates. You may find it hard to get the promised price for the dates that you want to travel, or there may be no space available on those dates at all.

  • Confirm the arrangements. If transportation and hotel are included in the travel package, ask how to contact those companies and confirm with them directly that the reservations have been made.

  • Do your own travel research. It’s easy to get information from a local travel agent and other sources such as trusted Websites and the Internet. You may be able to get the trip you want for far less than the “bargain” price a company is offering.

  • Pay with a credit card. Fraudulent travel operators take the money and run, and even legitimate companies can suddenly go out of business. Protect yourself by paying with a credit card so you can dispute the charges if the promises aren’t kept.

Find Fraud Alerts related to this scam here.

Avoiding sales calls

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Tired of calls from strangers trying to sell you something? Bothered by shady characters offering deals that are too good to be true? You can’t eliminate unwanted calls completely, but you can reduce the number your receive.

Stay safe. Be Informed.

  • Sign up for the national “do not call” registry. It’s easy and it’s free! Call (888) 382-1222, TTY (866) 290-4326 from the phone number you want to register. Unfortunately, registering by phone may not work if you live in a residential complex that uses a PBX phone system. But you can also register online at https://www.donotcall.gov/. The “do not call” system will send a response to that address with a link that must be clicked on within 72 hours to complete the registration.

  • Your registration will not expire.  Telephone numbers on the registry will only be removed when they are disconnected and reassigned, or when the consumer chooses to remove a number from the registry. You can confirm that a number is on the registry and the registration date through the toll-free number or Web site. If your number changes or is disconnected, you’ll need to re-register. You can also take the phone number off the “do not call” registry anytime via the toll-free number or Web site.

  • Some callers aren’t covered. Nonprofit groups, charities, political organizations, and survey companies don’t have to use the national “do not call” list. But when charities use professional fundraisers to call, they must honor your request not to call again.

  • Some companies can still call you. Even if your number is on the registry, companies can call if: you purchased something from them or made a payment within the previous 18 months; you asked about a product or service or submitted an application in the past 3 months; or you have a “personal relationship” as a friend, relative or acquaintance. But you always have the right to tell them not to call again.

  • Be careful what you sign. Companies can also call with your written permission, so look at contracts, order forms, contest entry forms, and other things you sign carefully to make sure you’re not agreeing to be called without realizing it. You can withdraw consent anytime by saying, “don’t call me again.”

  • It may take a while to notice fewer calls. Telemarketers check the national “do not call” registry every 31 days, so it may take that long before your number is removed from their calling lists.

  • If your number is on a state “do not call” list, it may also be on the national registry. Not all states have their own “do not call” lists, but some that do are transferring the numbers on their lists to the national registry, others aren’t. The “do not call” Web site has information about how specific state “do not call” laws relate to the national registry.

  • If you don’t sign up for the national “do not call” registry, you still have rights. You can tell companies not to call you again on a case-by-case basis. Keep a record of their names and the dates of your requests.

  • Enforce your rights. If telemarketers ignore the fact that your number is on the registry or your request not to call again, report them through the “do not call” toll-free number or Web site. If telemarketers violate your federal “do not call” rights you may file a claim for $500 per violation (the court can triple that amount if the company knowingly broke the law). Note their names and the dates of the calls.

Find Fraud Alerts related to this scam here.

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