The Anatomy of Common Online Scams

Many times the reason that a conflict exists is because of some type of scam or fraud. Frauds take many forms. Sometimes it’s a scam online, sometimes it’s a Ponzi scheme, and sometimes it’s a corporate fraud or embezzlement. We’ll talk about a couple of them including some that have to do with a fake law enforcement call. Some of them have to do with fake Bitcoin investments. 

This one here is an employee of a car dealership that embezzled $1.3 million from their employer. Basically, what they did was they created fake companies and made up a billing scheme. So this person worked for the company as a freelance advertiser and marketing agent, and so they were tasked with doing advertising for the dealership. And what they did was create a bunch of fake companies and said here are companies that did work for the dealership and here are the invoices. And they charged his employer over a million dollars to pay these fake internet companies and siphoned off the money. Come to find out these weren’t even real companies. They were owned by them, owned by the fraudster as a shell company trying to pretend they were legitimate advertising and marketing firms. 

Another form of fraud is when you’re approached by somebody who claims to have an investment. A lot of times this occurs online through Instagram, dating sites, or some employment sites. 

You’ll get a message out of the blue that says Hey I just made all this money on this investment. Sometimes on a dating site, it’ll be somebody you’re conversing with who shows up in a conversation that says, Hey, I’m making all this money I’m going away for vacation this weekend or I just bought this new car or I’m going out to dinner with my friends because I made $10,000 on this investment And they’ll show pictures on social media of their luxury vacation or their new car or their fancy dinner with champagne bottles. And what it does is it tries to get you to ask them, well gee how’d you make this money? And they’ll say, Well I put my money into this investment in Bitcoin (or in bonds or whatever else) and I doubled my money in two weeks. They’re then hoping you’ll ask well how did you do that? So then they’ll send you a link and they’ll say well this is where I put my money. And then you’ll go to that link and now you have a referral from somebody who you think you can trust because you think you’re in a dating relationship with them or you have a friendship. And you think they proved that they made this money cause they have pictures of their vacation or of luxury items, but it’s all a scam. 

This person is not really who you think you’re talking to, it’s a scammer who has these fake investments. And because of the fact that you’re maybe enamored by this person or you’re trying to show off to this person or because they’re faking you out with this social media representation. Maybe they have stock photos of somebody on vacation. Maybe they rented a car for a day. Now you send them $30,000 as an investment, but they won’t stop there. Once you send them $20,000 or $30,000, they’ll say Hey look your account now is up to $75,000! You put in 30 and it more than doubled. You have 75,000 in the account right now. Look here’s your statement. And they send you an official-looking account statement and they say Look, if you hit a hundred thousand in your account, the hundred thousand automatically doubles because you get some kind of bonus. So all you gotta do is get it to a hundred. So now you send a hundred and then all of a sudden they show you a statement for $200,000 and you’re thinking wow you only put in $40,000 and you have $200,000, you’re making a lot of money. And they’ll keep asking for money this way, right up until the point that you asked for some back and say Hey wait a minute. I made all this profit. I want to take some out. 

As soon as you start asking to take money out, then they’re going to say Well you have to pay taxes. If you want to take out 200,000, you have to pay 10% taxes. So send us $20,000 You send them 20 grand, and then it’s well there’s an audit fee of $5,000. They’ll keep asking you for money for different things until you either realize it’s a scam, get mad at them, or run out of money. One of the three.
Another type of scam is where you get a phone call from somebody who claims to be in a position of authority like a police department or IRS tax auditor and says Look, you’re in big trouble. We have a warrant. Your file has been flagged for an audit or for enforcement or for prosecution and your fines are overdue. You owe 14,000 in fines. You have to pay immediately. And they’ll talk you into paying that money. Sometimes they’ll tell you it’s a relative who’s been arrested that needs bond money. And they’ll know a little bit about you, they’ll go on your LinkedIn and your social media to find out where you live, maybe what kind of house you have, maybe your car and they’ll use that information to help their conversation extract money from you. So we see hundreds of victims of these scams every week. We know it’s very difficult. If you have had this type of experience, put your message below to let us know what your story is about how you’ve been scammed and what kind of conflict that created for you or for your family.


Looking for more information?

A cyber liability policy can help cover your business and keep you updated with industry tips like this one. Get in touch with us today to learn more about cyber liability insurance coverage, or set up a no-obligation consultation with a commercial lines expert through TelaClient.com.

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