As Special Agent Jack Bauer in the hit TV show “24,” Hollywood actor Kiefer Sutherland is the epitome of the cynical and deadly counter terrorism agent who always gets his man. In real life, Sutherland is a more mundane individual who actually happened to get bilked out of $869,000 by a scammer who promised to make him rich by buying cows in Mexico. As absurd as that sounds, no one is above getting scanned, and these celebrities found out the hard way.
Lots of Bacon, No Eggs
A few years ago, actor Kevin Bacon and his wife Kyra Sedgwick became Hollywood’s poster children for people conned by Bernie Madoff. Neither Bacon nor Sedgwick have disclosed how much money they trusted with Madoff, but they indicated that the loss from the Ponzi scheme represented several years of hard work on both their parts.
Tennis great John McEnroe lost $2 million in 2007 after buying a painting from someone he trusted, only to discover later that it had several liens attached to it. More recently, Hollywood legend Robert DeNiro found himself the victim of a theft of 80 of his father’s paintings by the same art dealer that fraudulently sold the painting to McEnroe. Like the Grand Slam title holder, DeNiro had implicitly trusted the dealer with handling his late father’s painting.
Tip of the Iceberg
Such incidents get a lot of attention, but they’re only the tip of a massive iceberg. Statistics compiled by the Financial Fraud Research Center (FFRC) show that a staggering 30 million people are defrauded monetarily each year. The direct, measurable losses from such fraud are estimated to be between $40 billion to $50 billion annually, with median losses per individual at $2,267. The actual losses may actually be more, as victims of fraud often tend to hide or downplay the fraud out of embarrassment.
Common Scams and Fraud
The FBI lists several of the most common types of scams and frauds that are targeted at individuals. Among them are telemarketing fraud, “Nigerian Letter” or “419” fraud, advance fee schemes and Letter of Credit fraud. With telemarketing schemes, victims are typically asked to part with their money or personal information in exchange for a fictitious vacation package or free gift. Nigerian Letter scams involve emailed letters in which a scammer impersonating a Nigerian government official tries to get victims to send money on the premise that they will get millions of dollars in return. With advance fee scams, victims are asked to pay money in advance of a product or service that they never get.
How Not to Become a Victim
The FBI has some down to earth suggestions to avoid falling for scams, including the following:
Only buy products and services from a familiar company or one that you can confirm is a legitimate business
Do not ever pay for a “free” prize.
Before sending money to someone, verify the guarantee that you will actually get the product or service you are paying for.
Never give away your ATM number, credit card number, Social Security Number or personal data over the phone unless you initiated the call.
Monitor your credit score through services like LifeLock to keep an eye on fraudulent activity.
Always be wary of any business that operates out of a post office box or a mail drop.
If something appears to be too good to be true, it probably is too good to be true.
There are numerous other types of scams as well. Security firm BitDefender recently complied a list of scams on Facebook, including one in which victims are lured into clicking on links to malicious websites by promising them lewd celebrity pictures. Other hooks to get people to click on malicious links include messages about free tickets to a concert or theme park, or those that offer some new application or functionality.
Everyone is Vulnerable
According to the FFRC, no one is immune from fraud, though some tend to fall for them more easily than others. There are several reasons this happens, reports CBS News’ MoneyTalks. People aren’t always rational and tend to make decisions without thinking through the consequences. This is especially true if the scammer manages to make them think they are smarter than others around them. Many of us are also attracted to financial gain and have a tendency to trust people, especially those in authority. Scare tactics also tend to work very well.
-by William Diaz; Image from Flikr by user Jramspott
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