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- Buckle Up We've Now Entered Fraud At Full Throttle. 🚄💨🏁⚡
Buckle Up We've Now Entered Fraud At Full Throttle. 🚄💨🏁⚡
Frank McKenna
January 03, 2024
Happy New Year from FrankonFraud!
I hope you had an amazing holiday season and are ready for what promises to be an interesting year.
Here’s the fraud snippets of the week.
We released our Fraud Predictions for 2024
Remotely created checks are creating big issues
Founder fraud is the aftermath of drunken sailor days
This Cyber Kidnapping scam trend is disturbing
Fraudsters timed attack when executives were on holiday
A celebrity falls victim to a new bank call-forwarding scam
This SBA EIDL scam is catching fire
The reason Regions check fraud skyrocketed
Now, let’s get to the top stories of the week!
It’s Fraud At Full Throttle – Our Predictions for 2024
My fraud-fighting friends, Mary Ann Miller and Karrisse Hendrik, and I mind-meld each year to imagine the year ahead.
A flurry of text and Zoom calls goes on for weeks. Out of that process, we create ten predictions we think will come true in the next 12 months (or perhaps beyond).
This year we are calling “The Year of “Fraud At Full Throttle“ ⚡🚀💨
So buckle up and focus; it could be a wild ride.
This Little Known Fraud Type “Remotely Created Checks” Is Causing Big Losses
Check fraud losses are sky-high for banks this year as emboldened thieves have raided mailboxes pilfering checks and then selling them online.
But, there is another method that is driving up check fraud too, and not many people know about it. It’s called- remotely created check fraud.
It’s not something that is highly publicized. That is until now anyway.
Last week the Justice Department sued Altitude Processing, saying that he ran a massive Remote Check Fraud scheme, and then attempted to bury the extent of the scheme through sham microtransactions.
The Drunken Sailor Aftermath - Founder Fraud!
Manish Lachwani started a company called HeadSpin Inc. The company provides software to test apps across multiple devices (desktop, mobile devices, iPads) before the app is released.
And Lachwani did well. HeadSpin raised more than $100 million from investors over multiple fundraising rounds, leading to a valuation of approximately $1.1 billion in 2020. 🔥
But Lachwani raised that $100 million by painting a far rosier picture on spreadsheets than actual reality at Headspin – inflating the company’s recurring revenues to fool investors.
Cyber Kidnapping - A Dangerous New Variant Of Ransom Scams
A dangerous new trend in scamming - Cyber Kidnapping.
This week, a Chinese foreign exchange student in Utah was found alone, “very cold and scared” in a tent in the mountains in frigid temperatures after his parents abroad were extorted and threatened with his safety in one of the first publicized cases of the scam.
His parents reportedly sent $80,000 to bank accounts in China after receiving the pictures of their son, who they believe was kidnapped.
The victims are ordered to isolate themselves and are monitored via FaceTime or Skype, forced to take photos of themselves that make it appear that they are being held captive, and the photos are sent to their frightened parents.
Fraudsters Time Fraud Attack On Credit Union Over Christmas Break
Valley Strong Credit Union got hit with an ill-timed fraud attack over Christmas Break.
Executive Vice President Steve Matejka, Valley Strong's chief operating officer, said the credit union normally sees a couple of hundred cases of fraud per day, but that this week's surge numbered about 2,000.
Matejka called it a merchant attack and said that may have been timed by criminals to hit when they thought the credit union's executives weren't paying attention.
This Celeb’s Bank Was Drained. Victim Assisted Scams Are Getting More Crafty
Andy Cohen fell victim to a scam that had him inadvertently forwarding calls from his bank to the scammer’s phone numbers.
On his podcast, he revealed the scam.
"I had gotten an email on Sunday because I did lose a card, and I put in for it, and I got an email being like, 'There might be fraud on your account. And I was like, 'Oh, this is attached to the card I lost,'" he said.
He clicked on the link in the email and logged into his bank account. After it prompted him for his Apple ID and password, he realized he had been phished, so he quickly shut off the browser.
Moments later, a phone call came from his bank (it was the scammers spoofing the phone number), and the scammers convinced him to put call and messaging forwarding on his phone.
Victim-assisted scams are going into overdrive!
How Regions Unwittingly Invited A Torrent Of Check Fraud
According to the ABA - In September 2022, the Birmingham, Alabama-based bank announced the launch of Early Pay, a new service that offers access to paycheck direct deposits up to two days ahead of normal payroll disbursement.
In connection with the rollout of Early Pay, Regions updated its policies to specify that electronic direct deposits would be made available to the bank’s customers “no later than” the day they were received, according to a statement from the bank about a September 2022 update to its customer deposit agreement.
That change to the bank’s funds availability policy appears to have contributed to a surge in fraud losses last year. Between April and September, Regions reported $135 million in losses due to check fraud.
This EIDL SBA Forgiveness Scam Is Going To Fool People
This new EIDL scam has people filling out government forms for EIDL loan forgiveness. The problem? The government form does not exist, it’s just an elaborate con!
Catch The Fraud Compadres Live Discussing Predictions for 2024
Mary Ann Miller, Karisse Hendrik, and I will be going live next week, January 11th, for this About Fraud Webinar talking about everything you can expect in 2024!
So what do you think of our predictions? Did we miss any important ones or flat-out get any completely wrong?
I greatly appreciate you reading this, and if you want to share the Newsletter with your friends, send them here!
It will be a great year fighting fraud with all of you!
FrankonFraud