Off the hook
Reuters has reported that a California-based federal judge dismissed a proposed class action lawsuit against Google for allegedly profiting from Google Play gift card scams by failing to refund millions of dollars to scam victims. Reuters explained that the named plaintiff in the suit, Judy May, of Indiana, said she lost $1,000 in April 2021 when a scammer posing as a relative instructed her to contact a supposed government agent regarding eligibility for federal grant money. Court documents further detail that the scammers convinced May to purchase five Google Play gift cards and to send the redemption codes to them before she discovered she was dealing with a scam. According to Reuters, May said she would not have bought the cards if Google had warned about scams on the packaging and warned that anyone demanding payment with the cards was a scammer. (Not a bad idea to include such warnings, we'd say.) Unfortunately for the consumer, the court said that May failed to show that Google caused her losses. In addition, Reuters explained, the judge said Google was not liable for keeping 15% to 30% commissions on purchases that scammers made with the gift cards, because Google's conduct was unrelated to the original fraud. The decision does not prevent the consumer from refiling the suit. We'll stay tuned for more developments, if any, but in the meantime—and in light of the holiday season upon us—it's a good time to for SCAM GRAM readers to review our gift card fact sheet, which includes tips for avoiding fraud and scams.
Sophisticated 'passive income' scheme
Nebraska Attorney General Mike Hilgers has filed a lawsuit against Nebraska social media influencer Elizabeth “Liz” Friesen and a Florida company she worked with, called WiFi Money, along with several other entities and individuals regarding their collaboration and involvement in various “passive income” schemes that targeted consumers nationwide with promises of "financial freedom." According to the AG's office, the defendants enticed Nebraskans to purchase “automated” e-commerce stores that would be run by “dropshipping gurus” on Amazon and Walmart-dot-com. Dropshipping, as the AG's lawsuit explains, refers to an online sales technique in which a business or individual opens an online store and lists items for sale from other online retailers, at higher prices than offered by the retailer. When a customer purchases an item from a dropshipper, the dropshipper purchases the item from a third-party retailer and has the item shipped directly to the customer. The AG points out that dropshipping has many flaws, not the least of which is the fact that customers can simply pay the lower price from the third-party retailer instead of purchasing it from the dropshipper. The lawsuit explains that at least 60 Nebraska consumers paid tens of thousands of dollars each to set up and manage e-commerce stores. Several of the impacted consumers lost more than $100,000. They were induced into the scheme with assurances that they'd earn as much as $10,000 or more per month in passive income. Some consumers took out loans in order to invest. Check out the court filing to see photo after photo of the influencers' lavish and enticing lifestyles and misleading ads. These could make good visuals for community educators putting on fraud prevention workshops.
Cracking down on deception
Karma catches up. The Federal Trade Commission (FTC) recently announced that it is sending more than $2.5 million to consumers who were misled by deceptive claims from credit services company Credit Karma. According to the FTC, the agency took action against Credit Karma in 2022, alleging that the company told consumers they were “pre-approved” and had “90% odds” of approval to entice them to apply for credit card offers that, in many instances, they ultimately did not qualify for. Credit Karma agreed to an FTC order requiring them to stop making these types of deceptive claims and compensate harmed consumers. The FTC is currently sending checks and PayPal payments to more than 50,000 consumers who filed a valid claim before the March 4, 2024, deadline. The FTC directed consumers with questions about payments to the settlement administrator, JND Legal Administration, at 866-848-0871, and to the FTC page with frequently asked questions about the refund process.
Just a click away. In another recent announcement, the FTC said that its new “click-to-cancel” final rule (most of which takes effect 180 days after it is published in the Federal Register) will require sellers to make it as easy to cancel subscriptions and memberships as it was to enroll in them. “Too often," said Commission Chair Lina M. Khan, "businesses make people jump through endless hoops just to cancel a subscription. The FTC’s rule will end these tricks and traps, saving Americans time and money." The new rule is part of the FTC’s ongoing review of the 1973 Negative Option Rule, which the agency is modernizing to combat unfair or deceptive practices related to subscriptions, memberships, and other recurring-payment programs. (“Negative option” refers to a transaction where the subscription automatically continues or renews unless the consumer takes an action to prevent it from continuing or renewing.) Among other things, the updated rule will apply to almost all negative option programs in any media. The rule will also prohibit sellers from misrepresenting any material facts while using negative option marketing; require sellers to provide important information before obtaining consumers’ billing information and charging them; and require sellers to get consumers’ informed consent to the negative option features before charging them. And, yes, as the fact sheet included with the FTC announcement states, there has to be an easy way to cancel: If you signed up in person, you should be able to cancel online or over the phone; if you signed up online, you should be able to click to cancel!
Tips
Quishing this goodbye. According to an article by Security Intelligence, legitimate organizations aren’t the only ones generating QR codes for added convenience these days. Cyber criminals, too, are leveraging QR codes and the increased reliance on near-field technology (NFC) to launch sophisticated attacks on unsuspecting victims, the IBM Security-run blog said. The blog article discusses a rising trend in phishing schemes in which scammers use seemingly legitimate QR codes to send users to malicious websites and to applications that carry out various cyberattacks. Termed “quishing,” the blog continues, this fraud technique can be highly effective, especially when the generated QR codes are posted in credible places, like on retail products, in business buildings, and on branded marketing materials, like magazines or mailers. Cyber criminals will typically generate codes that can be printed out and pasted directly over legitimate QR codes (think parking meters and restaurant menus), the blog explained. Article author Josh Nadeau reminds us that, although QR codes are a convenient way to install applications and get additional information about brands and services, it’s important to not let convenience cloud our good judgment when protecting our privacy. Nadeau recaps several must-see tips from the FTC to help avoid quishing scams, including looking for physical signs of tampering and being cautious when receiving an unsolicited request to scan a QR code.
A little less fake? Amazon has launched a new webpage, Unmasking the Fake Review Broker, to demystify the fake review broker industry and showcase how these brokers leverage their tactics across different sectors. Fake review brokers are fraudulent businesses that facilitate the creation of fake reviews and sell them to other bad actors in order to mislead consumers. The new Amazon page explains that fake review brokers are a global, industry-wide problem, impacting the integrity of consumer reviews across multiple sectors, including hospitality, contracted services, medical, dental, retail and travel. Brokers can appear to be legitimate businesses and advertise their services to consumers and sellers through external websites, social media platforms, and encrypted messaging services, Amazon explains. Check out Amazon's page to find links to legal cases that Amazon has mounted against fake review brokers and others committing reviews abuse. One of the cases we learned about when visiting the site is Amazon's joint lawsuit with the Better Business Bureau (BBB) against ReviewServiceUSA-dot-com, whose owners, Amazon explains, attempted to sell fake positive reviews for publication on Amazon product listing pages and BBB business profile pages. U.S. PIRG offers several tips for spotting fake reviews and provides a brief update on new rules from the FTC, which took effect in October, to help stop fake reviews. The rules, U.S. PIRG explains, prohibit illegitimate reviews, paying for positive or negative reviews, squashing negative reviews, and other dishonest tactics. The public interest group said that the rules might help, but acknowledges that they won’t eliminate all fake reviews. Here's to great efforts to make our world a little less fake.
Low blow. As if having a loved one land in jail is not enough of a problem, families are being warned about a scam that targets family members of recent arrestees. A scam alert posted on Facebook this week by the Lee County, Florida, Sheriff's Office warned that someone claiming to be a Sheriff's Office employee is calling families of individuals who have been recently arrested and asking for funds to get the family's loved one out of jail. "This is an opportunistic scheme to defraud and we are urging the public to vet the bail bondsman and the company prior to providing any personal information and/or funds to them," the sheriff's post read. On the very same day (this scam really is making the rounds), Fox 5 News in Atlanta ran a story about a Clayton County, Georgia, family scammed out of $2,000 in a fake bonding scheme following their son's traffic-related arrest. According to Fox, in that case, scam callers impersonated officials from the Clayton County Sheriff’s Department and Anytime Bonding, convincing the family to pay the bond via Zelle and Cash App. SCAM GRAM readers should note that these aren't the "fake emergency" or "grandparent" scams we frequently hear about, where family members are made to believe a loved one has been arrested. These fraudsters in Lee County and Clayton County are targeting families whose loved ones have, in fact, been arrested. The sheriffs’ offices reminded the public that they will never call to demand payment over the phone and urged anyone targeted by this type of scam to contact local law enforcement. Spread the word!
Don't get CAPTCHA'd. Alabama-based Sylacauganews.com recently published a scam alert with some streamlined tips from AVG Threat Labs to help PC users avoid what we'll call here the "prove-you're-not-a-robot CAPTCHA scam." The way the scam works, AVG explains, is that criminals first lure people to compromised websites through phishing, malvertising or another method. The compromised site will then ask the visitor to verify they're human with a CAPTCHA test. If the visitor starts the test, a script or set of commands will be placed in the computer's clipboard and the visitor will then be tricked into running the script and downloading malware. To stay safe, AVG offers several tips, including avoiding compromised webpages by using caution when clicking on links; avoiding running scripts altogether, since that's a function best left to those who really know what they're doing; and being wary of things placed on the clipboard, including running a virus scan if we don't recognize something when we paste from the clipboard. Check out the Sylacauganews.com piece for more details. For some good visuals detailing how the malware download actually plays out on Windows computers, check out PC Mag's article here.
Keeping vets safe. As the nation honored our country's veterans earlier this week, several news sources and organizations took the opportunity to warn about scams that target veterans year-round. A Virginia-area AARP fraud alert explained that fraud cost veterans, service members, and their families $477 million in 2023, citing FTC statistics that include only fraud that was actually reported. AARP also noted that over 85% of veterans encountered service-related scams in the last 12 months. Among the most prevalent scams targeting current and former service members, according to AARP, are veteran-focused twists on impersonation scams and investment fraud. Criminals frequently impersonate the VA, the alert stated, often threatening to cut off benefits if the veteran doesn't provide sensitive personal information or pay bogus fees. Veterans may also be contacted about investment opportunities, with low fees or special offers just for veterans, said the alert. Scammers may claim to be veterans themselves. AARP pointed readers to new fraud prevention resources for veterans unveiled by the White House and the VA. These include the VSAFE.gov website and a new VSAFE fraud hotline, which can be reached at 833-38V-SAFE (833-388-7233). For help from AARP, call 877-908-3360 or visit the AARP Fraud Watch Network.
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