Internet gangs of the 2020’s

I did a post a couple of months back about contrepreneurs & fake gurus selling doggy courses or get-rich-quick schemes (which of course are just scams intended to rob you blind). But if anything, I barely scratched the surface. There are now literally hundreds of these post-truth grifters selling “courses” (even thought you can just join a MOOC, many of which are free and give you an actual qualification from a university)…likely because about the only useful thing you learn on these fake courses, is how to scam people out of their money!

And these are just one of a long list of scams being perpetrated online. Cybercrime has proliferated massively over the last year or so. With so many people in lockdown and a decline in paper money it seems criminals have now moved increasingly online. To the point where we are witnessing a full on crime wave. Online scammers are to the 2020’s what the mafia were to Chicago in the 1920’s.

Praying on the vulnerable

An insidious feature of these scammers is how they pray on the vulnerable, often targeting older people (on the assumption that they may lack the IT knowledge to spot a scam) or the recently unemployed, divorced or anybody down on their luck. Case in point Jim Browning, a NI based hackvist has documented scammers targeting someone with depression (whom the scammers knew had been scammed before). Or, another occasion, a blind woman. And in many cases the victims find themselves swindled out of thousands of pounds (sometimes their entire life savings).

More recently Jim Browning teamed up with Mark Rober (a former NASA engineer and inventor of the glitter bomb) to catch these scammers in action. During this investigation, they observed money mules working in the US on behalf of Indian based scammers to collect packages of cash worth tens of thousands of pounds (yes they managed to scam people into basically posting them their life savings). This is the scale of the operations we are talking about here.

A history lesson

One thing to realise is that a lot of these scams aren’t necessarily anything new, many are old fashioned hustler tricks that have been used since at least the roaring twenties, if not the middle ages (e.g. the pig in a poke scam, aka a fake goods or sale scam, has existed since the 16th century).

The only difference is that in times gone by, the scammers had limited means to distribute their scam. Generally limited to those they could physically meet (think of the old fashioned snake oil salesman at a county fair). Or later on, those they could contact via print media, then with late night infomercials. But now, thanks to the internet, you can fire off hundreds of millions of phishing lines or internet ads in a few clicks, vastly multiplying the potential reach of these scams.

Buzzword bingo

Of course in of itself this also creates a line of weakness, as it means that many of these scams follow a series of predictable patterns, which can be easily spotted. For example making unrealistic promises of high returns (if this was legitimately possible, why isn’t everyone else doing it and why is the scammer advertising this, allowing rivals to get in on the act and saturate the market). Or using high pressure sales tactics (as they want you to pay up before you’ve had a chance to think it through). Or appealing to people’s emotions (e.g. fake charity scams, which will offer to pay for medical treatment overseas…when in reality its just a variation on the Nigerian prince scam).

Sometimes the best way to stay safe is simply to watch out for certain buzzwords or terms, e.g. “legal loophole”, “sack your boss”, “passive income”, “xyz hates this trick”, “xyz has been ripping of customers for years”, “did you know that xyz, so if you give me your money”….you’ll never see it again! And of course be very suspicious of the word “free”.

I think you get the message. Hell, I didn’t realise the extent to which these scams have proliferated because some years ago I programmed my email to just automatically mark as spam any emails with certain known buzzwords or phrases scammers use. So just being aware of these scammy buzzwords (or if you know someone who is potentially vulnerable, making them aware of it) can be a good way of staying safe.

Scamazon prime

A common scammer tactic is form of catfishing, where the scammer will pretend to be someone reputable, e.g. your ISP, Microsoft or Amazon and claim to be contacting you about some security issue, a refund or a problem with your payment. And, needless to say, the punchline is they want you to login into your account so they can steal your bank details or get you to send them money.

Its actually gotten so bad, my advice is that if you get any email or phone calls purporting to be from Amazon (or Google, Microsoft or any other major tech firm), I’d just assume its a scam, even if you actually have an Amazon account and are awaiting a delivery. Don’t click on the links in any email, no matter how legit they look, go to your account via the normal channels and login normally (using two-step authentication) and you should be able to verify what’s going on. And don’t call back a missed call, it will likely be to a premium rate number scam.

Case in point, there’s the Amazon prime scam doing the rounds, which takes advantage of Amazon’s unwillingness to let people cancel an Amazon prime subscription they accidentally signed up for. This is another of those tech support scams covered by Jim Browning.

Certainly one could argue that its hard for the authorities to keep up, including Amazon’s own security team. But in this case, their sales tactics for Amazon Prime have had catastrophic consequences for many victims of this scam, something Amazon need to own up too.

Get poor quick schemes

And this is why I’d argue these scams can be quite dangerous. For example Amazon has been trying to promote the sales of its own shares recently, as it seeks to exploit the pandemic and grow its market share. Of course, this doesn’t mean investing in Amazon is a good idea. Like any investment its a risk. Amazon pays dividends to shareholders about as much as it pays tax, other firms such as ebay are starting to catchup, and if Amazon have to issue more shares as the expand the share price will fall. But either way, Amazon’s success is being exploited by scammers.

For example, I’ve seen ads encouraging investment in Amazon promising returns in the order of several thousand percent. This has nothing to do with Amazon and this rate of return exceeds the actual performance of Amazon stock by some order of magnitude. Based on the experience of those who’ve fallen for it this appears to be a boiler room scam. The promoters behind it seem to be based out of Cyprus and it mirrors a similar scheme from a few years ago, which was shut down by the FTC.

But of course, like all scams, you can see how it prays on the unwary. They are trying to exploit FOMO, Fear Of Missing Out. Most people will know Amazon is a very successful company, out of which many have gotten rich, notably Bezo’s….and his ex-wife. So an advert pops up and says sign up now and for just $250 we’ll make you rich, well, like I said, its easy to see how people can be fooled.

The lesson here is don’t trust something just because you saw an advert for it. After all internet searches and advertising can be manipulated. So much so that a sure fire way of spotting a scam is simply putting “is xyz a scam” into Google and if you only get positive reviews and see nothing negative, then its a scam (no product or service is that good that nobody will whinge about something, so this shows someone has gone to great lengths to scrub the internet of any genuine criticism).

Don’t take things at face value. If it looks to good to be true, then it probably is. Also make sure the story checks out and do some due diligence. E.g, someone says they are based in the US and they are actually based somewhere else, why are they lying about that? Probably because they’ve got something to hide.

Also why are they selling to you in the first place? Think about it, if its such a good deal why pitch it to dozens of amateurs online when a billionaire can cut you a cheque right there and then? Well because rich people, and their staff, will go over any business proposal with a fine toothed comb and it won’t take them long to spot a scam.

Case in point, the Brit method, that was doing the rounds a few years ago (or the Canuck method if you are in Canada, or the Aussie method in Australia and so on). This was another investment scam revolving around binary trading (now illegal, in part due to this scam). Again, as with all the others, it exploited people’s ignorance and greed.

My point is, if things don’t check out, or you get the slightest whiff of dishonesty (or nothing but cult like enthusiasm), don’t just walk away, run away, then report it. And frankly I’d sooner take financial advice from my neighbours cat than take it from some random stranger on the internet.

Crypto scams

My view on crypto is that they will take off eventually. But only after the major banks, governments and/or tech companies have decided to support one. However, they likely to be only interested in a type of crypto currency where they can exert some form of regulation and control. Which pretty much rules out most existing crypto. Some might well survive (for a time) as a form of digital gold, but most are basically digital tulips.

So with that in mind, crypto is by definition, a high risk investment. Yes some early adopters did make a lot of money, but equally that also means you can lose a lot of money. So I would urge caution. Not least because there have been attempts to scam people using the promises of crypto riches.

This includes pump and dump schemes using crypto currencies, people being defrauded out of their money (thinking they were buying bitcoins), or digital wallets being broken into and straight up stolen. And some of these cases have involved the likes of John McAfee and Elon Musk.

And that’s before we even bring up fake crypto currencies such as BitConnect or Onecoin, which turned out to be little more than ponzi schemes. Again, these seek to exploit a combination of people’s ignorance about crypto as well as FOMO. Don’t fall for it.

Wingnut welfare

Another type of scam to be wary of are attempts to exploit people’s politics. For example the we build the wall fiasco, which diverted money from Trump supporters into the pockets of the foundation’s organisers. Or how the NRA have been embezzling donations for many decades, often using donors cash to fund the extravagant lifestyle of NRA board members, or republican politicians.

And we can see similar things with televangelists of the prosperity gospel, who literally brag about their private jets (ya I remember that bit from the Bible when Jesus got his supporters to put themselves into poverty to buy him a golden chariot so he could go to the temple in Jerusalem and congratulate the money lenders on the excellent job they were doing).

But others on the right want a piece of this action. Farage has been shilling on behalf of various half baked and doggy investment schemes (while humping the union jack and using many of the same conspiracy buzzwords mentioned earlier). Trump too has been accused of openly swindling his supporters money, using underhand tactics.

While this is more of a problem for the political right, its not like the left is immune to it. Recall how the Teamster union’s under Jimmy Hoffa ended up being controlled by the mob, who used that control to swindle supporters out of some of their pension contributions. Then there was the fake UK charity Kids Company that was closed down a few years back.

The lesson is, any badly run organisation, no matter its political goals, will be exploited by the greedy and the corrupt. Donate your money to more competently run organisations.

McMafia

the fact we now have evidence of criminal gangs, in different parts of the world, working together does raise the possibility of McMafia involvement in these scams. For those unfamiliar with the term, McMafia refers to how modern organised crime functions. Rather than operating in one geographical area, with a hierarchical structure (boss, underboss, caporegime’s, etc.), instead they now operate as more of a sort of lose international franchise (kind of like McDonalds, hence the name) of different gangs who will specialise in a particular type of crime.

So for example, we have these fraudsters in India running the phone and internet scams. Sitting behind them is likely another gang who acts as enforcers (in case any of the staff get cute), provide protection from robbery by rival gangs and arranging kickbacks and bribes to public officials, who allow them to operate. Another gang in the US organises the money mules who likely pass on the cash to someone else (for a cut of course).

This next group will either launder the money, or divert it towards other criminal gangs around the world, who will use it to fund crimes like prostitution, drug smuggling, people trafficking, etc, kicking back a cut to the all parties. I’d note that it is a common tactic for criminals to use rackets that yield ready cash (such as loansharking, illegal gambling, extortion, robberies or grifting) to then fund more profitable but cash intensive operations (such as drug smuggling, gun running, people trafficking, etc.).

Now I bring this up because there are some who see internet scams as a victimless crime. This is particularly a problem in India, where some see it as just rich westerners getting fleeced (revenge for colonialism). Well, the victims of these scams (who are mostly pensioners, the unemployed or blue collar workers, not the rich) would disagree. It can really be traumatic.

Secondly, its likely the proceeds from these frauds are being used to fund other criminal activities, which btw can include terrorism. In fact previous terrorist attacks in India have been traced back to similar McMafia operations, where the enforcers happened to be terrorists, which is a not unusual setup (here in Ireland there’s a similar dynamic with loyalists and republican paramilitary groups,providing protection in exchange for a piece of the action).

Just last month, while arresting an individual on money laundering charges related to BEC frauds, the FBI pointed to a link between cybercriminals and north Korea. And this not the first time north Korea has been implicated in cybercrime.

The crackdown

Finally, I will end with some positives, the authorities are starting to catch up with these criminals. Now that the thief in chief is out of office, a number of prominent scammers in the US are starting to get arrested, as well as a Teranos wannabe whose now on the run. Any fraudulent phone calls I’ve had recently were flagged up as fraud. So it looks like the law is starting to catch up.

But its a game of Whack-A-Mole for the authorities. As soon as they’ve shut down one outfit and gotten the word out to the public, the scammers have moved on to something new. Really the only solution is all of us to be cautious online, look out for one another and trying to stay safe.

And perhaps we need to re-discover the value of experts, as after all, alot of what these scammers are selling is the expertise many in the post-truth era have chosen to reject.

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