A free Public Service

SCAMS BULLETIN Host Jay White is an inactive attorney in San Mateo County, California.

May 20, 2022

CROWDFUNDING SCAMS

Courtesy scambusters

Crowdfunding is a way to raise funds for a specific cause or project by asking a large number of people to donate money, usually in small amounts, and usually during a relatively short period of time, such as a few months.

Crowdfunding is a $17 billion a year business in the US. Scammers tug at your heartstrings with stories of war victims or people desperately needing money for healthcare.

The war in Ukraine is fueling a huge rise in crowdfunding scams, robbing Americans and people who genuinely need help of millions of dollars. The advent of disasters and emergencies like Ukraine  have opened the floodgates for scammers.

Popular sites like GoFundMe, Kickstarter (mainly used for business projects), and Indiegogo, are trying to spot and remove the crooks but they’re fighting an overwhelming tide of scams.

Scammers use names of legitimate organizations to imply they’re backing a funding campaign.

Furthermore, it’s now easier than ever to set up an individual crowdfunding site independent of the big players. Crooks can buy a perfectly legitimate software kit that does all the work for them.

Many are easily moved by some of the stories that accompany individual campaigns.

HOW TO AVOID CROWDFUNDING SCAMS

Be cautious about donating to a friend’s Facebook funding appeal. Check with them first.

Educate yourself. Check if the crowdfunding organization provides guidance on scams — and read it. For example, GoFundMe offers help here: GoFundMe Trust & Safety.

Beware of campaigns that ask for donations in cryptocurrency/cybercurrency. Such payments are untraceable.

If you don’t know the individual or have never dealt with the charity, research their cause carefully. Have they been involved in other funding campaigns? What happened then?

Read any small print in the funding blurb to discover, for example, whether all donations go directly to helping the individual or charity or whether a proportion pays for administration costs.

Don’t act impulsively. Think before you donate.

Read the comments from other donors on the funding page. Be alert to warning signs from disgruntled givers.

Don’t assume that a site naming an individual in need of help necessarily has the victim’s blessing or that your money will find its way to them. If it doesn’t explicitly have their approval, don’t give.

If you want to donate to a disaster relief program, identify and research the organization behind it and, if you’re satisfied it’s genuine, donate directly to them.

If you suspect you’re a victim of a crowdfunding scam, notify whichever platform it was on and tell the Federal Trade Commission, http://www.ftc.gov

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A Free Public Service

SCAMS BULLETIN Host Jay White is an inactive attorney in San Mateo County, California.

May 1, 2022

PIG BUTCHER ROMANCE AND CYBER SCAM

Courtesy Scambusters

ARRIVING NOW – THE “PIG BUTCHER” ROMANCE AND CYBER SCAM

The term “pig butchering,” is a translation of the Chinese sha zu pan, refers to the tactic of first fattening up the hungry (or even greedy) victim over an extended period and then moving in to take money when the hapless casualty tries to escape.

Pig butchering sounds gruesome, and it is. Not just for poor old pigs but also for the victims of a fatten-and-slaughter scam where online daters are subjected to a long, softening process of building up trust with the scammer before he moves in for the kill.

It’s a lethal combination of romance and cybercurrency scams, which is poised to sweep the US after huge successes for the crooks in China and other parts of Asia.

Organized crime gangs have hijacked and merged two of the fastest growing scams in the US — dating and cybercurrency — into a sophisticated fraud dubbed “pig butchering.” And the result is every bit as nasty as the name suggests. This time, carefully trained groups use sophisticated tactics and master scripts to convince their targets, who are often successful, savvy and well-educated Americans, into handing over their money.

HOW THE SCAM WORKS

The trick starts, as most romance scams do, on dating sites and social media, sometimes via email. The crook, may use a photo of an attractive person, or strike up a friendly online conversation. They present themselves as an easy-going, wealthy professional, often in the same walk of life as a target person.

But here’s a difference from regular romance scams: they initially don’t ask for your money. Instead, they mix in mention of profits and losses they are making each day in cybercurrency trading. They might do this for several weeks or months, while the relationship develops with general chit-chat and flirting.

The crooks use carefully written scripts designed specifically for the targets with psychological tactics that amount to brainwashing. Eventually, the target, or mark, either asks about the scammer’s supposed investment strategy or the crook introduces it into the conversation, which, by now, has moved to a messaging app like WhatsApp.

This leads to a fake but highly convincing cryptocurrency website and an app used for learning and trading. Sometimes, the victim is encouraged to buy currency on a genuine trading site first and then transfer the holding to the fake site.

The scammer may send daily buy or sell tips and the victim sees their apparent holding grow. In the initial stages, if they suffer a big loss, the crook says he will carry it, though, of course, the money is already in his pocket.

This tactic is designed to make the victim increasingly confident about the scammer, who is also conducting a romantic conversation on the side.

As the victim plows in increasingly larger amounts of money, guided by their new online “lover,” and see their on-screen portfolio seeming to grow, they eventually decide to try to take their profits. But they’re given a variety of reasons why that can’t be done. They may even be asked for more cash to “meet processing costs.”

THE RED FLAGS

What can you do to avoid getting caught out by this scam?

The actions you can take are similar to those for guarding against a regular dating scam, but you have to be extra vigilant against the persuasive charm of these crooks.

Their scam works so well because the gangs behind the scheme are so thorough and convincing. Some of them even have fake customer service reps trained to talk victims out of trying to cash out. They use training manuals, tailored scripts, and translation software to seem educated, articulate, and helpful.

Finally, do not send money!

Scams can be reported to US Federal Trade Commission, www.ftc.gov

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