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- ☕ Have A Cup of Coffee And Catch Up On The Latest Fraud Stories
☕ Have A Cup of Coffee And Catch Up On The Latest Fraud Stories
Frank McKenna
June 13, 2023
Hello from FrankonFraud,
I hope you’re having a great week and pumped for the start of summer 2023.
I am back in San Diego after a week filled with travel, conferences, presentations, and more fraud.
Some of the more interesting events of the week:
Tencent Sells DeepFakes for $145
A guy gets arrested for using a CPN
Drivers license fraud kicks into overdrive
New UK rule is great news for scam victims
Fraud analysts are now the #1 most impersonated
A big internal fraud case at Southwest Airlines
California is seeing a flood of ghost student fraud
So grab a cup of coffee, and let’s get to the top stories of the week!
Fraud Arrest - They Told Me I Could Use A CPN To Buy A Car!
One of the reasons synthetic identity keeps rising is because so many consumers and fraudsters think CPNs are a legitimate way to fake your identity.
Check out the footage and dramatic arrest of a man being arrested for using a fake identity tied to a CPN number.
As he was arrested, he exclaimed, “But someone told me I could use a CPN to buy a car!”
Fake Fraud Alerts Are Now The Most Common Impersonation Scam
Ugh. Fraud Analysts and fake fraud alerts are now the common impersonation scam.
At least, that is what the FTC says. The fake fraud analyst alerts are up 20X in the last 2 years.
This is bad news for fraud analysts that count on those customers’ calls to validate activity on their accounts.
Police Alert 🚩 Check Fraud Is Spiking At Auto Lenders and Dealers
The spike in check fraud hitting banks is also infiltrating auto lenders and dealers now.
Sgt Schlosser of the Houston Police Vehicle Fraud Unit spoke at the Point Predictive Auto Lending Fraud Roundtable in Plano last week and alerted lenders to a new, growing scheme.
How it works
Borrower payoffs their auto loan by sending a bad checks to the lenders.
Before the check bounces, they take the car to a dealership to trade it in for another vehicle of lesser value.
The dealer cuts a check back to the customer and gives them the keys to the new car.
When the check bounces, the dealers are not only out the car they gave the customer but all the cash.
Beware of this new fraud scheme. It appears to be hitting dealerships all over the country now!
Tencent Cloud Is Offering DeepFakes for $145, Delivered in 24 Hours
Is it live? Or is it Memorex? Remember those ads?
Well, Tencent Cloud, the Chinese Cloud Service platform, is offering an incredibly scary service - deepfake cloning.
The announcement, which first appeared in Chinese Media in April, touts that the company can create a high-quality deepfake video using only three minutes of live-action video and 100 spoken sentences.
The deepfake video cost about $145 USD and can be created in less than 24 hours.
The deepfake can be either a half-body or a full body of the subject and can speak in English or Chinese. The buyer can also customize the background of the video as well as the tone of the speaker.
While Tencent originally markets this as a way for people to make infomercials for their e-commerce businesses, many believe scammers and fraudsters will use this technology.
Experts Warn Drivers License Fraud Is Kicking Into High Gear
First, it was your checks; now, it’s your Driver’s License. Mail thieves and hackers are actively targeting consumers drivers licenses to perpetrate identity theft schemes.
According to James Lee, COO of the ID Theft Resource Center in San Diego, the problem is escalating since the pandemic began. According to Lee, “What's new is starting with the pandemic, we started to use driver's licenses to prove we are who we say we are."
One more reason to keep your eye on the mail!
Ghost College Applicants Flood California Colleges to Steal Financial Aid
Ghosts are haunting California’s community colleges. No, their intent isn’t to scare people but to steal financial aid.
About 20% of California’s community college applications are scams today: more than 460,000 of the 2.3 million requests to the state’s online application systems. Most of those applications are being submitted by bots.
The states aging fraud systems don’t help the matter either. About 50% of the fraudulent sham applications are slipping through, meaning that there are about 200,000 ghost students collecting financial aid.
Major New Rule Will Compel UK Banks To Reimburse Scam Victims in Five Days
Good news for scam victims in the UK - a new rule will make it mandatory for banks and payment firms to reimburse victims of online bank fraud within five days when the victim has sent money to a bank account controlled by fraudsters.
But it doesn’t stop there. The sending and receiving banks will need to share the reimbursement cost. The rule is expected to go into effect next year.
In the next several years, we may see a similar trend of scam reimbursement here in the US.
Internal Fraud - Employee Used Fake Names To Create Thousands of Travel Vouchers
A Southwest Airlines employee is in hot water for allegedly faking over $1.8 million in travel vouchers and selling them for a profit.
Dajuan Martin worked as a customer service representative with Southwest Airlines. Part of his job was giving out those travel vouchers to customers when they got bumped from flights or when the airline screwed up.
Evidently, he started creating fake names and selling the vouchers to his friends and associates when they texted him.
I did the math, and apparently, he must have created up to 9,000 of these travel vouchers between 2018 and 2022.
Phone Filters Make DeepFake Scam and Fraud Videos A Snap
David Maimon had an interesting Linkedin Post and discovered a video demo of a fraudster at work using a deepfake video technique. The scammers may be using some face swap application to conduct a romance scam.
As he explains in his post, “the video below, the criminal holds two phones while discussing with his victim; the first phone uses a filter which disguises the criminal face with a different one, and the second phone is focused on the first phone which shows the criminal revised face.
The female victim is unaware and does not suspect she is discussing with a fraudster (for obvious reasons, I covered the victim’s face). You can have a glimpse at the criminal’s face at the top right side of the first phone (the one displaying the male image)”
Got Fraud Mules? Experian’s Got A Score For That
Experian says about 42% of first-party current account fraud is due to money mules accepting fraudulent funds as deposits into their accounts.
So Experian created a Mule Score that analyzes 4 dimensions of the account:
The account opening history
The account turnover
Experian bureau data
Patterns form over 200,000 mule cases
The model appears to work. Experian say’s in a recent test, it was able to detect 50% of the highest-risk mules for banks.
Thanks for reading the weekly FrankonFraud newsletter.
Please let me know if you have any tips, stories, or trends you think are worthy of broadcasting to the fraud-fighting community!
Have a wonderful week,