Online Scams and Security: Common Law

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The FCC and 'Zero-Rating'

The phrase 'zero-rating' might sounds like the worst news a business can get from customers on Yelp. Instead, recent news coming out of the Federal Communications Commission might be the best that media companies offering sponsored data programs have heard recently.

Zero-rating actually refers to the practice of data carriers not counting certain data usage against their customers' caps, allowing some companies to pay those carriers to exempt their data. While net neutrality advocates and even the former FCC Chairman aren't fans of certain zero-rating plans, it looks like the new FCC won't mind.

The world we live in is not always what it seems. Simply put, just answering the phone can expose you to dangers from scam artists. The best we can all do is learn about the dangers so as to be ready to face them on a daily basis.

The "can you hear me" scam is a new scam that essentially uses the simple question in order to elicit the word "yes" from the phone call recipient. A scammer calls someone, and when the person answers, the scammer, who is recording the call, asks: Can you hear me? Once the scammer is able to record a person saying "yes," they will be able to use that recorded answer to potentially push through fraudulent credit charges either via a person's phone bill or credit card.

Everything seems automated these days. And the amount of data out there seems infinite. This is especially true in the investment world, where computer programs can execute trades in nanoseconds and the smallest piece of information can make the difference between profits and pitfalls. So it only seems natural that, at some point, robots would replace humans as financial advisors.

So-called "robo-advisors" are the hot new thing, and, as with any new invention, the regulators are on their way. The Securities and Exchange Commission (SEC) has, for the first time, included "electronic investment advice" on its annual list of examination priorities. So what regulations are in store for robo-advisors?

Good news! The next time you go to wire your life savings to a prince from the country of New Africa that needs your help to claim his thousand million dollar inheritance, Western Union may not let you. As a result of a joint Justice Department and Federal Trade Commission prosecution, Western Union not only has to pay over half a billion dollars to the feds, they must implement new policies to safeguard consumers from getting scammed.

As part of the settlement, Western Union admits guilt to the criminal violations of "willfully failing to maintain an effective money laundering program and aiding and abetting wire fraud." These crimes are related to scammers, confidence artists, and organized crime utilizing Western Union to perpetrate financial crimes. The money collected by the feds will be made available to the victims of fraud that have sent money via Western Union.

Email Scam Du Jour: Netflix

The most recent email scams making the rounds involve everyone's favorite movie streaming service, Netflix. While email scams are nothing new, the new Netflix scams, like the newest Gmail scam, have learned from the mistakes of past scams.

Scammers, in their usual style, utilize a phishing campaign, which involves sending out mass emails hoping that a couple people don't recognize the deception. However, unlike most phishing scams, where it is usually pretty easy to spot the tell-tale signs of a scam, the newest Netflix scam is much more sophisticated and difficult to detect.

The scam works like this: a person calls you up claiming to be from the state or county or court or whatever government entity, and says that you missed jury duty, which is a serious offense. Then, they tell you to pay some amount now over the phone, or else you'll face some sort of penalty, like public humiliation or being arrested or larger fines. The amounts vary with reports indicating some scammers demanding as little as a hundred dollars, while others demand over a thousand. Also, notably, this scam has gone digital and is also perpetrated via email.

Generally, if you miss jury duty, or are in legal trouble, you are not going to get a phone call. Maybe if you were actually selected to serve on a jury and you don't show up, or you mouth off to a judge on your first day of service, you might get a call from an upset judge or frustrated bailiff, and get in some real trouble.

However, it is highly unlikely that you'll get a call if you fail to show up for jury duty, and even more unlikely that the caller would demand money. Also, if you do get a call from law enforcement, or a government official, generally, they will want you to come in to the official location, like the court, police station, or city hall, rather than just pay money over the phone.

The credit reporting companies Equifax and TransUnion were fined over $20 million as a result of an order issued by the Consumer Financial Protection Bureau (CFPB). The CFPB found that both credit reporting companies had deceived customers by tricking them into signing up for recurring payment subscription-like services, as well as lied about the cost of their services. Additionally, the CFPB found that the companies misled consumers into thinking that the reports and scores provided were more useful than they actually were by falsely claiming that they were the same reports considered by lenders.

Equifax also violated a provision of the Fair Credit Reporting Act (FCRA) which required them to provide a free credit report once every 12 months. The company did provide it, but required consumers to view their advertising prior to receiving the report, which is a violation of the FCRA (which would have allowed advertising after receiving the report).

Unfortunately, the cost of legal help can often be prohibitive for most people. Consumers are often forced to forgo legal help because they cannot justify the immediate high cost, despite the potential for even higher costs over the long term. In order to capitalize on this insecurity of consumers, businesses have popped up offering consumers access to legal forms and legal services using low-cost subscription models. However, these services can often hurt consumers more than they help.

While many service industry jobs can easily be replaced by automation and outsourcing, legal services require a professional's touch. That is because each legal situation is different, and standardized documents and services frequently fail to account for individualized situations.

Stories about scammers asking for payment in gift cards, a relatively new trend, seem to be increasing in frequency. Gift cards, believe it or not, are a relatively untraceable method for scammers to steal money from victims. Generally, if a person is asking you to provide them with payment via a gift card over the phone, you are being scammed (that is unless you're legitimately shopping by phone using a gift card).

Recently, the story of John Gutz made headlines after his daughter saved him from giving a scammer $10,000 in gift cards. Mr. Gutz was able to walk into a Sam's Club and purchase the pile of gift cards, and luckily, his daughter inquired into what he was doing before he started reading off the numbers to the scammer over the phone.

The internet has the potential to bring people together for all sorts of purposes. Craigslist.org, for example, helps people connect, find jobs, and even buy and sell stuff. Unfortunately, Craigslist is also a haven for scammers and criminals.

Apart from the concern of buying stolen goods, users must be wary of the spammers that have also started to exploit Craigslist in order to perpetrate a host of different types of scams. One of the first things that scammers try to do is route out the most gullible. One way they accomplish this is by creating a massive amount of fake, low quality ads. Frequently the ads are created by bots, or programs that live on the internet and perform tasks that their makers assign. If a person responds to an ad that is clearly bot generated, there is a good chance a scammer will reach out and attempt some sort of swindle.