Smuggling Drugs in Unwitting People's Car Trunks

Woh, down in Mexico, I never really been so I don't really know.
And oh, Mexico, I guess I'll have to go.
-James Taylor, lyrics from Mexico

Schneier on Security has this is clever but scary story:

A few miles away across the Rio Grande, the FBI determined that Chavez and Gomez were using lookouts to monitor the SENTRI Express Lane at the border. The lookouts identified "targets" -- people with regular commutes who primarily drove Ford vehicles. According to the FBI affidavit, the smugglers would follow their targets and get the vehicle identification number off the car's dashboard. Then a corrupt locksmith with access to Ford's vehicle database would make a duplicate key. Keys in hand, the gang would put drugs in a car at night in Mexico and then pick up their shipment from the parked vehicle the next morning in Texas, authorities say.

A reader made an interesting comment at Schneier's site; with the duplicate key the smugglers could have easily stolen the cars. Apparently there is more money to be made in drug shipments than in selling a stolen car.

Bottom Line

People who smuggle goods are called mules and not every mule is aware that they are smuggling. Hence the questions at airports - did you pack your own bag? Did anyone give you something to carry on board? Etc.

Never leave your bags out of sight when traveling. A clever crook could slip something into your bag. They won't get caught when the illegal item is found on you. And if you do manage to get through the boarder, the crook or his/her accomplice will steal your bag on the other side.

Golden Rules for Scam Prevention

You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time.
- Abraham Lincoln (attributed)

Most of us want to trust people so it's not so hard to be fooled by a scammer. Here are The 10 Golden Rules of Scam Prevention from MoneyTalksNews.com.

Rule Number 1: Don't Trust the Testimonials of Stranger
The only testimonial worth believing comes from people you both personally know and totally trust. The testimonials you see from strangers on TV or in online reviews may be lies or paid for. Ignore all testimonials in ads, websites, and infomercials.

Rule Number 2: “Documented proof” is not proof
Anyone willing to rip you off can create fake checks, letters, or anything else to back up their claim. And even if they have valid proof of past success, that is no promise of future success.
- Markets are cyclical so last year's top performing stock may be this year's biggest loser.
- Don't forget that Ponzi schemes and Pyramid Marketing pay off the early contributors to lure in a larger number of fish. 
- Ads often cite the most extreme success stories - not everyone will lose 100 pounds on this diet.

Rule Number 3: Guarantees are only as good as the company behind them
A common scam is that the results are “guaranteed, or your money back!!!” But what if the company refuses to honor the guarantee? Are you prepared to take them to court? Many fraudulent companies use post office boxes so they cannot be located by courts of law. Or they may flee the country or change the company name to hide from lawsuits.

Rule Number 4: It’s not fine to ignore the fine print
Virtually every deal that goes bad is the result of people listening to the sales pitch without reading the fine print in the contract. It is your responsibility to know that your mortgage payment will go up after three years, or that your credit card interest will jump from 9 percent to 29 percent if you miss a payment or that mutual funds are risky. If you don’t understand the fine print, ask a friend to explain it to you.

Rule Number 5: Haste makes waste
The only people who can wisely make snap decisions regarding a purchase are those who are experts at what they’re buying and make such decisions frequently. For everyone else, take your time when buying a house, a car, stocks, getting married, etc. The bigger the cost, the more time you need to examine it. An offer that is "too good" to wait for will usually leave you burned.

Rule Number 6: Use the Internet to Verify Claims
Consider this scam, an ad asks for $400 to help you get a government grant for your small business. If you go to the Internet and type “government grants for small business” into Google or other search engine, you'll quickly find a government website which says that the federal government does not provide grants for starting and expanding a business. So the ad was a rip-off. The Internet can also expose frauds where the information is free online that someone is offering to sell to you.

Rule Number 7: Check Online for Fraud
Use a search engine to search for a company or product and add the words “review” and “ripoff.” You will be directed to sites that specialize in consumer reviews. This is a twist on rule #1 about strangers. Never trust product endorsements from strangers, but if many strangers call a product a fraud you ought to listen carefully. Do they have an axe to grind or is there a real problem?

Rule Number 8: Use the help you’ve already paid for
Your tax dollars fund agencies, like the Federal Trade Commission, that publish advice on how to avoid rip-offs.

Rule Number 9: Getting something free? You might be the product, not the customer.
Most free content is paid for by advertising that is trying to catch your eye or ear. Other sites survive by collecting and selling information about your and your online habits. Consider the motivation of those offering free content and how they are using you.

Rule Number 10: If it sounds too good to be true…
"The best way to avoid getting ripped off is to simply ignore people and companies who promise simple solutions to complex problems. They don’t exist. Nobody is going to show you how to buy a house for $398, nobody is going to provide a consistent 12 percent return without risk, and nobody knows how to make big bucks with little effort at home in their spare time. Think about it: If these claims were true, why would the people making them share that information with you?"

Bottom Line
You don’t have to remember all the above rules to protect yourself from con artists. Just following a few will help. Imagine a product without the money-back guarantee and the testimonials. Would you still buy it?

Update

The Consumerist has this quote by an author on Amazon,

I've purchased my own book, Wealth Hazards, close to 200 times now. I wrote 42 customer reviews and voted on them 108 times. Not once was a review or vote rejected by Amazon. It took about 45 days to move the book up to #1, but after it got there I didn't feel it was appropriate to promote it - so I have not profited from it. I continue to buy 2 or 3 copies a day, write reviews and vote on the reviews and wait for Amazon to notice. They haven't.

ATM Scams

"Consider this: I can go to Antarctica and get cash from an ATM without a glitch, but should I fall ill during my travels, a hospital there could not access my medical records or know what medications I am on." - Nathan Deal

Hopefully you're aware of ATM skimmers. I'll discuss them below but thought I would start with a low tech way to lose money at an ATM. San Francisco police caught a crook who stuffed napkins into ATM cash dispenser slots. When people tried to withdraw cash, it would get stuck behind the napkins. After they walked away frustrated, the crook dislodged the napkins, and walked away with their cash.

If your ATM money does not come out reach up into the slot and see if there's anything stuck there. If that fails, take a cellphone picture of the ATM screen for evidence and then call the number on the ATM for service or go inside the bank for help.

Now back to skimmers. These are devices designed to steal your card information and pin. Check out the photos at http://www.snopes.com/fraud/atm/atmcamera.asp and http://consumerist.com/2009/04/heres-what-a-card-skimmer-looks-like-on-an-atm.html

There are two things to worry about.

1. A camera that records the PIN you type in. At the snopes link above the camera is hidden inside a pamphlet holder next to the ATM (pictured above). At the consumerist site the camera is in a strip attached to the ceiling.

2. A card scanner attached to the ATM. At both sites the extra scanner is part of a panel affixed to the ATM and look absolutely authentic!  At this site, http://gizmodo.com/5453857/atm-card-skimmers-are-getting-frighteningly-sophisticated, the skimmer is quite thin and covers the card reader.

Bottom Line

What can you do to protect yourself. Not much I'm afraid. Try to cover your fingers as you type the PIN from prying eyes or camera. Use the same ATM and remember what it looks like. If anything changes on the outside of the machine, ask the bank before using the machine.

Any card scanner could be stealing information - at restaurants, gas pumps, grocery stores, etc. If money is stolen report it to the bank and file a police report.

Stolen Checks

"I don't have a bank account, because I don't know my mother's maiden name". - Paula Poundstone 

My wife has discovered the joy of online payments and online banking but a story from the Consumerist make me nervous. Some banking sites scan your checks and allow you to view the images online. These images may be stored on a 3rd party server by an independent image storage company whose security rules are not quite as strict as your bank's.

Russian crooks have broken into three sites that store archival check images, stolen the account information, and written over $9 million in phony checks against over 1,200 accounts. The security company that discovered this attack has notified the affected sites but it is not making their names public.

To avoid getting caught, the Russian crooks used "money mules".  Here's the story of an unwitting money mule:

A man found her "work wanted" ad online and contracted her to become a virtual assistant. He said that he was associated with the reputable international fashion marketing firm Mandi Lennard. The jobs started simple: buy this exact kind of ink and paper and perform various tasks. Soon he had her sending money for him to help one of the "photographers" purchase some alcohol. When she asked why he needed her to send the funds, he said "because i am very busy and you are my assistant."

Then she was instructed to print out a check for $1,300, deposit it in her account, and write a check off her account and mail it to her handler.

But when she did, the bank said it would be held for seven days while they investigated it for fraud. She soon received a call from a woman in Atlanta. It was her account the $1,300 check was drawn from, and the caller she was pissed and ready to press felony charges against her!

Bottom Line

Never, never agree to cash a check to your account and then offer some or all of the funds from your account (by check, cash, or wire service) to the person supplying the check. This is a very common scan and you're the one breaking the law by cashing a check that will bounce or one that is using stolen account information.

Common Scams

“I sincerely believe that banking establishments are more dangerous than standing armies, and that the principles of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale” - Thomas Jefferson

Here are the top 10 International Scams according to the FTC (Federal Trade Commission).

1. Asking for money to be wired
This is a scam red flag! Wiring money is like sending cash: there is NO protections against fraud and no way to know who received the money.

2. Money requests from "friends", persons in need, businesses you did not order from.
Don't send money to strangers or unsolicited businesses.

3. Asking for info by phone, text, or email.
Never give personal information to someone contacting you. They could be lying about who they represent. Never use links supplied by email.

4. You won a foreign lottery!
Playing in foreign lotteries is illegal.

5. Please deposit this check and wire me some money back immediately.
Famous scam. The check may take many days to clear before bouncing and you will be fined for the bad check. Meanwhile the money wired is gone forever. (see #1)

6. Unauthorized charges
Always check your credit card statements and bills for "Extras" that may have been added without your permission.

7. Donating to a "fake" charity
After a natural disaster, stick to established charities like the Red Cross. Don't trust just anyone offering to collect your money.

8. Miracle Health Product!
Buy drugs only from licensed U.S. pharmacies. Otherwise, you could end up with products that are fake, expired, mislabeled, or dangerous.

9. There is no such thing as a sure thing
Stay away from anyone promising a low-risk, high-return investment opportunity. This is a contradiction of the financial market. The only true "low-risk" is FDIC insured bank accounts with terrible rates. Higher returns ALWAYS require higher risk and a chance of losing money.

10. Dealing with a fake business.
With VoIP and P.O. Boxes it is easy to create fake companies that disappear with your money with no way to find out who has it. Only deal with reputable companies with real addresses.

Bottom Line

If a deal sounds too good to be true, it is!

The Psychology of Fraud

“The natural assumption was that old people and kids get taken advantage of by scam artists. But it's really the people who like to shop online a great deal. They should proceed with more caution.”-Rob Janes

GeekPress.com sites an article by “Schneier on Security” which summarizes a paper about the Psychology of Being Scammed by the University of Cambridge Computer Laboratory.

The distraction principle. While you are distracted by what retains your interest, hustlers can do anything to you and you won't notice.

- Scammers often work in pairs. One may "accidentally" bump you while another picks your pocket or spill something on you and apologizing while your pocket is picked.

The social compliance principle. Society trains people not to question authority. Hustlers exploit this "suspension of suspiciousness" to make you do what they want.

- One trait of a good con artist is confidence; they radiate trustfulness. I had a brother-in-law who was a pro at this and gained the sympathy of people and organizations. Do not trust anyone who knocks on your door without an ID badge. If in doubt call the police or company they represent to verify the employee.

The herd principle. Even suspicious marks will let their guard down when everyone next to them appears to share the same risks. Safety in numbers? Not if they're all conspiring against you.

- This is a common trick with shell game operators and crooked poker games. You see someone else winning and they share their secret – watch for the tick in his eye when he bluffs. But it’s all a lie and the winner is part of the scam too.
- This is also a common problem on chat rooms and online comments. The person spinning a tale of good or bad may be working for the product’s company or against it. Many Amazon reviews are tainted this way.

The dishonesty principle. Anything illegal you do will be used against you by the fraudster, making it harder for you to seek help once you realize you've been had.

- A favorite trick of the KGB. They catch a US diplomat or serviceman in an affair (the woman is working for the KGB too) or drugs or discover his “Gay” secret, etc and then use this information as blackmail. Or you accept a small “innocent” bribe but they then leverage it to bigger things under the threat of exposure.

The deception principle. Things and people are not what they seem. Hustlers know how to manipulate you to make you believe that they are.

- Watch the classic movie “The Sting” for how elaborate this can get with fake businesses and fake police. Most of the Nigerian email scams rely on making you think there is a large sum of money that you can help someone acquire for a modest reward. People of all ages have been fooled and some continue to insist that the scammer really is an innocent person in need even after they've been defrauded.

The need and greed principle. Your needs and desires make you vulnerable. Once hustlers know what you really want, they can easily manipulate you.

- Drug dealers and websites exploit this – especially pornography. They offer multiple teasers and then require money (or more money) to go beyond to the next level. There are online games which are free to play but the “best” armor, potions, faster experience gaining, fastest movement or teleporting are only available for modest fees.

Bottom Line
The paper also discusses a dozen con scenarios, which are both informative (and entertaining).