If you’ve been on social media recently, chances are you’ve seen someone in your network launching a business in direct sales. You may have even been approached by someone inviting you to attend a get-together to learn about a “can’t miss” multi-level marketing (MLM) opportunity.

NCL depends on complaints from consumers to help us spot scams and, ultimately, help law enforcement agencies investigate and prosecute scammers. If you’ve been a victim of a scam or been approached by a scammer, file a complaint via our secure complaint form. 

Read our other Fraud Alerts here.

In 2018, NCL heard from thousands of consumers who sent us heartbreaking stores of scammers swindling them out of millions of dollars and, just as importantly, their peace of mind. Each year, we compile all of those complaints into our annual Top Ten Scams Report, which helps us identify emerging threats – like scammers demanding payment via gift cards – that aid our work to alert consumers, companies, and the government about growing trends in fraud.

While the Top Ten Scams report is worth a read, the bottom line is you need to know how to avoid becoming a victim. To help you with that, here are tips for avoiding each of our top 10 scams: 

Internet Merchandise Scams
If a website is offering an item at hundreds of dollars cheaper than retail (think: high-end sneakers), chances are that there’s something fishy going on. Check out the reviews of the website and try calling the customer service line (if one exists). If you do buy, pay by credit card so that you can dispute the transaction if it turns out to be bogus. 

Prizes, Sweepstakes, and Free Gifts
If you are asked to pay money – whether via wire transfer, gift card, prepaid debit card, or some other means – before you can receive your “prize,” then it’s a scam. Run away! 

Fake Check Scams
If someone asks you to deposit a check into your personal checking account and then send all or a portion of the proceeds to them or someone they know, it’s a scam. 

Recovery/Refund Scams
These scams target people who have already lost money to another fraud. The scammer claims to be able to recover your lost funds for a fee. Don’t wire them money, give them credit card details, send a check, or give them any personal information. Just hang up the phone or delete that email! 

Advance Fee Loans/Credit Arrangers
Consumers looking for a loan may be tempted by flashy ads on social media or the Web offering easy cash without a credit check. Be afraid! Any legitimate lender is going to want to at least check your credit history before offering a loan. Be especially wary if you are asked to pay a big upfront fee in order to get the “loan.” 

Phishing/Spoofing
Fraudsters have become highly effective at making their emails and robocalls look and sound convincing. Beware of clicking on any links or attachments in an email that seems to be coming from a bank or other trusted institution. Instead, type in the bank’s web address or call the number on the back of your bill to verify before giving out any sensitive information like your bank account routing number, usernames or passwords. 

Friendship and Sweetheart Swindles
If someone you met online suddenly wants you to send money to pay for a family emergency or for them to come visit you, it’s probably a trap. Romance scammers will strike up relationships with dozens or hundreds of victims in the hope of convincing them to send cash. Be especially wary if your new friend quickly asks you to move the conversation to text message, chat apps, or email instead of a dating website’s messaging platform. 

Computer Equipment/Software
This is the dreaded “tech support” scam. If someone calls or emails you claiming to be “tech support” for Microsoft, Google, Best Buy, or some other technology firm, hang up the phone or delete the email. Chances are, they just want you to grant access to your computer so that they can convince you to pay for an expensive “tech support” service you don’t actually need. Even worse, they can install malware or even encrypt your files and hold your computer for ransom. 

Scholarships and Grant Scams
Fraudsters offering “guaranteed” scholarships or college grants are to be avoided. Chances are, they’re just looking for a big fee in order to send you information about financial aid that the government already offers for free. 

Family/Friend Imposter
An urgent call or email from a family member asking for help can be hard to resist. The call or email may also come from someone saying they’re a lawyer, a doctor, or a law enforcement official that is in contact with your loved one. The “emergency” requires you to send money urgently. Before sending the money, try contacting the person in question or their parents on your own to verify the story first. Chances are, it’s a scammer trying to get you to send money before you can stop and think. 

NCL depends on complaints from consumers to help us spot scams and, ultimately, help law enforcement agencies investigate and prosecute scammers. If you’ve been a victim of a scam or been approached by a scammer, file a complaint via our secure complaint form. 

As the holiday vacation season draws near, many bosses and managers plan to take a few days off to travel or celebrate with family. This creates the perfect opportunity for fraudsters to impersonate them and trick their employees into falling for a costly scam.

The National Consumers League has recently observed a marked increase in complaints regarding the boss imposter scam. In this scam, fraudsters pose as real executives from an organization and ask “their” employees to send gift cards or to wire money on their behalf, reassuring them it’s a business request that will be reimbursed. These scams are particularly successful for con artists when they happen to reach an employee whose boss is out of the office on travel, when it’s more difficult for the employee to verify the legitimacy of the request.

A complaint we received from a man in New Hampshire is a common example. In this case, the victim was out $1,500. Here is what he told us:

“I received an email from what I thought was the owner of our company while he was in Ireland. The email [stated that] ‘I need you to make a store purchase for Apple iTunes gift cards of $100 face value. I need 15 of each card.’”

The email instructed the employee to send the codes on the back of the gift cards to the traveling company owner. Unfortunately, these emails can often seem quite convincing with fraudsters able to spoof the boss’s email address. Scammers are also able to identify conferences or speaking engagements that an employer may be traveling to, thanks to promotional materials, in order to perfectly time an email from “the boss.”

The convincing nature of these emails, combined with the hesitation of many employees to question their bosses, makes this scam lucrative for scammers and costly for consumers. The average loss reported to Fraud.org is more than $2,500. When victims use their personal credit card with the expectation of being reimbursed, they may be out thousands of dollars. Fortunately, as the holiday travel season approaches, there are several tips you can follow to protect yourself and your organization from falling victim to fraud:

• When in doubt, call your boss. Don’t rely on email. Always confirm any unusual payment requests in person or by phone. This is especially important if you are not typically charged with making payments. Do not use the contact information provided in the email, as this could be spoofed as well. Instead, ask your boss in person or call them directly from the company directory.
• Be cautious about any unusual information requests. Data can be just as valuable as money. If your boss is asking you for unusual personal information, consider calling him or her directly.
• Remember that just because the email is from your boss’s email account doesn’t mean that it is actually from them. With so many password data breaches in recent years–and the ability to easily spoof email addresses–scammers can send emails that convincingly appear to be from your boss’s account.
• Look for an unusual writing style. If the sender is writing in an unfamiliar style, or the email has lots of grammatical mistakes, it could be fake. If you are suspicious at all, call the sender to confirm any requests.

Boss impersonation scams come in many forms and can be difficult to spot. If you have fallen victim to a boss impersonation scam, let us know! You can file a complaint at Fraud.org via our secure online complaint form. We’ll share your complaint with our network of more than 90 law enforcement and consumer protection agency partners who can help put fraudsters behind bars.

Read our other Fraud Alerts here.

Being told that your credit or debit card is being declined at a restaurant, in a busy checkout line, or at your favorite online retailer can be an unsettling or even scary experience. At Fraud.org, we’re hearing from consumers that this awkward situation is also increasingly happening with gift cards. We’ve seen a spike in news reports about gift card scams, and we’re warning consumers to be on the lookout, particularly with the busy holiday shopping season on the horizon.

A typical scam scenario begins with a consumer receiving a gift card as a present from a friend, colleague, or loved one. When the recipient goes to use the card they assume is loaded with funds, the card gets declined. Unbeknownst to the gifter or the card recipient, before the card’s purchase, a scammer had taken the card off the rack at a retail location, copied down the card number, scratched off and recorded the security codes on the back of the card, and once the card was activated, drained its funds via online purchases. In some cases, the criminals go so far as to even replace the security strip on the card to hide their tracks.

Software makes checking card balances online easy for scammers, so they know when the card is activated and ready to use. The card’s true owner is left with a worthless piece of plastic.

Unfortunately, this form of fraud can be compounded when the retailer who sells the card refuses to make the victims whole. Some merchants have been known to deny consumers refunds even if the customer is able to provide the receipt and proof of activation for the gift card.

While detecting this scam can be very challenging, there are several steps you can take to proactively protect yourself and your gift recipient:

1. Look for gift cards with substantial packaging. Gift cards that do not have security packaging – which prevents access to the actual gift cards – are easy targets for scammers. Savvy consumers should avoid purchasing these cards at all costs.
2. Carefully inspect its security packaging. If there are any signs tearing or peeling or if it is not in mint condition, do not purchase it.
3. If you must purchase a gift card without security packaging, carefully inspect the foil tape over the PIN. Tape that is crooked, too large, or that appears to have been reapplied are all giveaways that the card may have already been compromised.
4. Consider only buying gift cards online. While gift cards that have secure packaging are better than those without, purchasing a card online reduces the chance that a card has been compromised, since scammers are unlikely to have had access to the card as they would in a public store. If you are looking for more security, take the time to order a gift card from your chosen merchant’s official website.
5. Keep your receipt, and give it to the gift card recipient. Providing a receipt for the gift card gives the recipient some negotiation power if the gift card has been compromised, since it will show that it was properly loaded at one time.

Spotting a compromised gift card can be tricky. If you spot someone copying down numbers at store, report them to security immediately. Similarly, if you purchase a gift card that has been compromised and does not work, 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 put fraudsters behind bars.

Read our other Fraud Alerts here.

With summer winding down, a new school year is just around the corner, promising new opportunities, experiences, and friendships. As many students are planning their return to school, scammers are working overtime to cheat students and their parents out of hard-earned savings. Fortunately, by learning about the most common scams targeting students before the school year starts, you can protect yourself and those you love from falling victim.

The high school diploma scam

For those of us who didn’t complete high school in a traditional setting, programs are available to finish coursework and earn a diploma. But scammers have identified ways of capitalizing on people seeking to earn their degrees later in life, and falling for one of these scams costs victims money and time and still results in no diploma.

If you or a loved one are going back to school to complete a high school degree, watch out for these red flags:

1. You have to pay for a diploma. If you have to pay for your diploma, it is a scam. You may have to pay for classes and testing in a legitimate program, but — once you earn it — you will never have to pay for the diploma itself.
2. You can earn a diploma in a day or two. If there are no classes or tests involved, and if you can earn your degree from “life experience” or previous work experience, it is a scam. A legitimate program will require that participants demonstrate excellence via coursework and exams.
3. They claim to be affiliated with the federal government. Legitimate educational programs are affiliated with state governments.
4. You can take an online test to earn your degree. High school equivalency tests are never administered online. All high school equivalency tests must be:
   1. Administered in person
   2. Proctored
   3. Closed-book
   4. Scheduled for specific dates and times

Going back to school to finish earning a high school degree is a worthwhile endeavor. However, to avoid getting scammed, always check in with your local community college to see what option is best for you. Your local community college can help you decide whether you want to take an equivalency test or a class from a legitimate operator.

The “student tax” scam

Imagine that while you are packing up your things to move into your new dorm, you receive an urgent phone call from the IRS. The “agent” informs you that you did not fill out your tax forms properly and you failed to pay your student tax, which helps pay for your public university. He notifies you that if you do not pay it immediately, you will not only be prevented from taking classes but that you will also face imprisonment!

While IRS imposter scams, like this scenario, can happen at any time of year, they tend to spike when scammers spot an opportunity to strike. Fortunately, knowing the telltale signs of an IRS imposter can help you steer clear of this scam.

1. The IRS calls to inform you that you owe money. If you receive a phone call from the IRS about an issue the agency has not contacted you about before, hang up; it is a scam. The IRS will always reach out through the mail first.
2. The caller is demanding payment through gift cards or a wire transfer. The IRS, along with any other government agency, will not accept gift cards as a form of payment. In addition, the IRS will never demand payment through a wire transfer.
3. The caller demands that you pay taxes without giving you the opportunity to question or appeal the amount you owe. If you are immediately threatened with imprisonment, and you are not provided with an opportunity to appeal your tax bill, you are being scammed.

Scholarship scams

Finding ways to pay for school can be challenging. Unfortunately, fraudsters know this and have devised numerous scholarship scams to cheat students out of their tuition money. Fortunately, there are several steps you can take to protect yourself:

1. Never pay to apply for government student loans or financial aid. If you are told to pay a fee to a company so that they can file a Free Application for Federal Student Aid (FAFSA) form for you, don’t do it. You can find all the help you need – for free – at fafsa.gov. If you still have questions, reach out to your university’s financial aid office.
2. If a company guarantees that you will get a scholarship or a grant, you are getting scammed. While there are legitimate companies that can help students identify scholarships and grants that they qualify for, no one can ever guarantee that you will be awarded a scholarship.
3. Never pay for a scholarship. If you are asked to pay fees or taxes in order to receive a scholarship, it is a scam.

If you believe that you have spotted a back-to-school scam, report it! You can file a complaint at Fraud.org via our secure online complaint form. We’ll share your complaint with our network of more than 90 law enforcement and consumer protection agency partners who can help put fraudsters behind bars.

Read our other Fraud Alerts here.