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Exposing the International Scam Machine

This week, we talk about the investigation into a global fraud ring by the 'AARP Bulletin'

menacing guy hiding his identity pushed a shopping cart full of stolen identities

AARP

Bob Edwards:

Hi, I'm Bob Edwards with an AARP Take On Today. Before we head into today's topic, we have a quick message from my co-host.

Mike Ellison:

Hi everyone. Mike Ellison here. We want to congratulate one of AARP's publications on an award nomination. Sisters From AARP is a free weekly lifestyle newsletter that celebrates Black women and welcomes all. It has just been nominated for a Webby, an award that honors the best of the internet. Every Tuesday, Sisters readers get the very best in health money, culture, style, relationships, and more vote www.webbyawards.com to cast your ballot and help Sisters receive the recognition they deserve. We'll leave links in the description of the episode. Voting is open until April 21.

Bob Edwards:

Technology has supercharged scammer's ability to target consumers. As you probably encounter every day, scammers are trying to reach you around the clock. Our personal information is more vulnerable than ever. In response AARP Bulletin conducted an investigation into the inner workings of the global fraud machine to uncover exactly how it operates. The result was the five-part cover story that you may have seen in the April issue of the Bulletin called The Bad Guys: Who They Are And How To Stop Them.

            Discussing how this project came together is the deputy editor of AARP Bulletin and AARP, the magazine, Neil Wertheimer. Welcome to the show, Neil,

Neil Wertheimer:

Thank you, Bob. It's a pleasure to be here.

Bob Edwards:

One of the findings in your story is that our data is inexpensive to buy. How cheap is our private information and why is it so easy to purchase?

Neil Wertheimer:

So a Social Security Number you would think would be a very prized item. They go for $2 and a credit card number goes for about $25. They're all available in an underground online shopping mall that's part of the dark web. It's a place where bad guys, criminals, exchange information and make a lot of money doing it. All of those data breaches that happen in the news that you hear about where someone is raided the inner computers of a major retailer, that data then gets broken up and sold to bad guys on the dark web. So there's a long life to the information. Last year, there were 1,862 breaches of large public organizations of their databases. So that's a lot of data that's being put out there for sale.

Bob Edwards:

Now you mentioned the dark web when we discuss fraudulent schemes. Tell me about its usefulness for a scammer.

Neil Wertheimer:

So it's important to understand what the dark web is. And to help understand that, the surface web is where almost all of us spend our time. The surface web is Google and Amazon and all the websites and news websites, where the people who run the websites want you to find their pages. So they make them scanable in a search engine. But 90% of what happens on the internet is not meant to be found easily by everyday people. That's the behind-a-password information at a bank or a retailer where only you have access to it below.

            Below that is what's called a dark web, which is where software allows people to interact there anonymously. You can exchange information, set up stores, interact without anyone being able to trace you. Anyone can access the dark web. It just takes a little bit of free software. And what happens is that anytime you put out a request, you get pinged between many servers before you arrive at your destination, making it impossible for you to track or anyone to track.

            So here's a place of the internet, the dark web, that you can set up a store and sell anything. Now it's not just your information. Drugs get sold there. Guns get sold there. It was initially set up for espionage, for spies of countries, to be able to report back to the government without anyone being able to know where they are or where they're coming from. But it's been taken over mostly by criminals as a way to exchange whatever they want without any chance of being tracked by law enforcement.

Bob Edwards:

Your story also mentions boiler rooms. They're essentially the hubs were scammers physically or virtually organize together to make outbound calls. What did you discover about these call centers?

Neil Wertheimer:

Well, the boiler rooms have been around for a long time, but it used to just be a guy with a phone, often a rotary phone back then, just dialing up phone numbers out of the phone book, and just trying to coerce people to buy an investment. Today, you can buy phone numbers en masse on the dark web. You can use advanced software so that computers will phone, or send emails, or send texts by the thousands nonstop.

            So the person sitting there at the boiler room is merely waiting for that occasional person who decides to call back on one of these recorded messages. So they're just waiting. They're not doing the dialing. The computer is doing it. They're just waiting for someone to call them back. And when they do, on their computers all kinds of information is available about who got the call, where they're calling from. And they can be masterful at coercing you.

            Now, what we also found is that when you do call back and someone picks up, the person who starts talking to you is often just hired out of college or off the streets. They often don't even know much about the fraud. But if you look like you are possibly a person who will go along with the fraud, you are quickly handed off to a handler who is masterful at the psychology of convincing you that this is for real, and that you really do need to send money.

            So once you get to a handler watch out, because they're very, very good at what they do. One quote from one of our experts that I really loved was, "If it sounds too good to be true, then the person is an amateur." Because today the fraudster is really good at what they do, and they're very convincing

Bob Edwards:

Boiler room workers at pep rallies every morning. I guess they're told how rich they're going to be if they just stay with it.

Neil Wertheimer:

Well, it's true in that this is big business. Often you'll be in a building with dozens and dozens of workers. There's technology managers there. There's HR managers hiring. There are bosses who are motivating them. It's just like any other high pressure sales business, but it just turns out that all the sales are illegal. They're all criminal.

Bob Edwards:

Well, why can't the government track down these boiler rooms and arrest the scammers?

Neil Wertheimer:

To start, increasingly many of these boiler rooms are located outside of the United States. So right away, we're dealing with foreign governments and foreign law enforcement. That makes coordinating any busts difficult. But it's also very, very hard to track these boiler rooms because the technology shields the information about where the calls are coming from. I mean, it's just happening all on the internet, using masking software so that you never know where the phone call is really originating from. So tracking them down is hard. It often takes human intervention, as in finding out about a salesperson and getting that person to disclose the information to be able to put a pin on the location and make a bust happen.

Bob Edwards:

The magazine article says that stealing people's money is only half the battle. What's the other half?

Neil Wertheimer:

Well, if you use a credit card or a check, it can be easily traced by the bank. So the art of the criminal money launderer is to make sure there's absolutely no traceability of where the money has gone and how it gets spent. So a whole industry has been created, a criminal industry, of laundering money that comes in a fraud.

            So often the scammer will ask for the money as a gift card. Now gift cards are not easily traceable. But still what they want to do is quickly take the gift card number and then go to the retailer and spend it immediately. We have information from one court case where the time it took from the target to give the gift card to the scammer, and for that gift card to get spent was 13 minutes. They immediately called up a runner to go into the store with the gift card number, buy a high priced item, and then walk out with the item, which then can be often sent to the Far East and sold on the black market at a pretty high value, completely untraceable. So that's the game of the money laundering, is to make sure there's absolutely no way law enforcement can follow the money.

Bob Edwards:

When you assemble all of the different pieces together, it starts to form a larger image of a fraud industry. What surprised you the most when assembling this project?

Neil Wertheimer:

I think that the public perception of someone who steals via fraud is old-fashioned and problematic. And that is when we think of someone who burglarizes your home or does a hold-up, says, give me your wallet. The old crimes, the bank robber. We think of lone wolves, desperate people who may not be all that sophisticated. They're just desperate for money and will do what it takes. I think a lot of people transfer that perception to the scammer, where it is so much the opposite.

            Scam is an industry. It's a really big industry. It is sophisticated in every level, no different than major retail operations out there, or banking operations. They have many tiers of experts, from the data gatherer to selling it, creating stores, to the money laundering operations we just discussed. There's so many layers of expertise that it's important for people to understand they're not dealing with just a mugger or a house burglar. They're dealing with a really sophisticated organization.

            Now that said, stopping it is so easy. There are so many targets out there that if you put up the least amount of resistance, they'll move on and try someone else. So we reiterate over and over in the Bulletin, and in all the AARP communications, just hang up, don't engage. If they want to ask you for money via a gift card, or via cybercurrency for example, or a Western Union transfer, immediately hang up. No legitimate organization asks for money that way, and they know they can't and shouldn't, because it appears fraudulent. If you just take certain simple steps, you can really go a long way from blocking these sophisticated players from coming after you. Or if they do come after you, having them move on quickly.

Bob Edwards:

As you say, it's not just the old small-time scammers, it's Russian oligarchs. It's organized crime.

Neil Wertheimer:

Absolutely. And it's in America. Yes, there's still boiler rooms in Florida and Chicago. But it's truly international in nature now. And one other thing to mention that we found, is they are amoral. If you think that they have any guilt about calling up someone who's on the edge of dementia and mistreating them and coercing them from sending tens of thousands of dollars, they don't. Particularly overseas, there's a perception that there is so much wealth in America these people can afford it. And that this is what we need to do to survive here. They really don't have some type of moral switch saying what I'm doing is wrong. And when you realize that, that's frightening. But it also helps explain why so many fraudulent pitches are coming your way, and why they work so hard to manipulate you. It doesn't bother them, and you shouldn't think that it does.

Bob Edwards:

Neil Wertheimer is deputy editor of AARP Bulletin and AARP, the magazine. You can read the full story in the April issue of the bulletin or online at AARP.org/bulletin. Thanks, Neil.

Neil Wertheimer:

It's been a pleasure. Thank you, Bob.

Bob Edwards:

As Neil explained, scammers are always looking for new ways to take your data and money. So when that's happening around the clock, how do you protect yourself from new attempts? Amy Nofziger says the answer is, as always, if you can spot a scam, you can stop a scam. She helped the AARP Bulletin team with their investigation, and she is director of fraud victim support at AARP's Fraud Watch Network. Amy joins us again for some quick tips on the latest scams.

Amy Nofziger:

The latest scams that people should look out for right now is what we're hearing on the helpline. And so we're definitely hearing about a lot of fake Amazon, or fake tech support emails that are coming to people. This is when you get an email from someone saying that there's a problem with your account and that you need to either click on a link or call a number to get that resolved. That is not them. This is nothing but a criminal attempt to try to steal from you. And sadly, they're getting a lot of money. Just the other day on the helpline, I had someone lose $200,000 to the scam.

            Another big scam that we're hearing about right now is anything to do with crypto. Oftentimes you start on a social media game like Words with Friends, or even if you're on a dating site like Tinder or anything like that, you meet someone. You exchange pleasantries. And then the next thing you know, they say that they are a crypto investor, or they know someone who has made a lot of money in crypto, and they will help mentor you to invest in crypto as well. Sadly, again, they are just out there to steal your money. Once you give them control of your crypto account, the money is gone, and people are losing thousands of dollars to these scams.

            The rule of thumb in protecting yourself with these scams is to educate yourself as much as possible on the red flags. And some of the biggest red flags right now out there are how the person wants to be paid. So if anyone calls you, emails you, or texts you and say that they want to be paid in a prepaid gift card, a wire transfer, in cryptocurrency, or even with a peer-to-peer app. In a peer-to-peer app, common names are Venmo, Cash App and Zelle. These forms of payments are huge red flags because they're virtually untraceable. Criminals love them because once you send the money, the money is gone and it cannot be traced where it's at.

            Also another rule of thumb is any anyone that wants you to act quickly with urgency. Stop. Take a breath and check out any opportunity that is being talked about to you over the phone, text message, or email with an expert or a trusted friend or advisor.

            There are many resources out to help protect yourself. AARP has the fantastic AARP Fraud Watch Network. This is a free resource for anyone of any age, and you do not have to be an AARP member to participate. You can go online to AARP.org/fraudwatchnetwork. There you can see our scam tracking map. This is a map that identifies areas close to you, or even where one of your family members lives, that drills down to the scams that are happening in that community. You can also sign up for the free Watchdog Alerts. These are emails that come to you monthly with the latest frauds and scams that we're hearing about.

            And certainly while you visit us on our website, you can learn more about the free AARP Fraud Watch Network helpline. This helpline is free to anybody. You can call and get information about latest frauds or scams. Or sadly, if you have been a victim of a fraud or scam, you can work one-on-one with one of our trained fraud specialists to help move you along in this situation.

Bob Edwards:

Amy Nofziger is director of fraud victim support at AARP's Fraud Watch Network. That's it for our show for this week. If you enjoyed this episode, please let us know by emailing us at newspodcast@AARP.org. Thanks to our news team, producers, Kobe Nelson and Danny Alarcon. Engineer, Julio Gonzalez. Executive producer, Jason Young. And my cohosts Wilma Consul and Mike Ellison. Become a subscriber on Spotify, Apple podcasts, Stitcher or other apps. Be sure to rate our show as well. For an AARP Take On Today, I'm Bob Edwards. Thank you for listening.

 

As you probably encounter every day, scammers are trying to reach you around the clock. Our personal information is more vulnerable than ever. 

In response, AARP Bulletin conducted an investigation into the inner workings of the global fraud machine. The result was the five-part cover story that you may have seen in the April issue of the Bulletin called “The Bad Guys: Who They are And How to Stop Them.”

Discussing some behind-the-scenes of how this project came together is the Deputy Editor of AARP Bulletin and AARP The Magazine Neil Wertheimer.

Plus:

Congratulations to Sisters From AARP on their award nomination. Sisters from AARP is a free, weekly lifestyle newsletter that celebrates Black women and welcomes all – and it’s just been nominated for a Webby, an award that honors the best of the internet. Every Tuesday, Sisters readers get the very best in health, money, culture, style, relationships and more. Visit vote.webbyawards.com to cast your ballot and help Sisters receive the recognition they deserve. We’ll leave links in the description of this episode. Voting is open until April 21st.

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