Keep your clients aware of latest scammers

According to a recent report, the government's economic-stimulus plan presents an unintended gold mine for scam artists out to steal a person's money, identity or both.

According to a recent report, the government’s economic-stimulus plan presents an unintended gold mine for scam artists out to steal a person’s money, identity or both. One word springs to mind when I think about those scammers — “chutzpah.”

For those who didn’t grow up in multicultural New York, “chutzpah” is the Yiddish word for sheer, unadulterated gall. That certainly describes scammers who will do anything to steal a buck, including preying on cash-strapped, desperate consumers, many of whom have lost their jobs and are running out of options.

The new scams have surfaced almost overnight. And the people behind them are devoting serious effort and money to their rip-off schemes.

They are running ads all over the Internet, both on live streaming sites, through search engines and on social-networking sites, according to the Federal Trade Commission.

What makes this environment ideal for scammers is the confusion surrounding the government’s programs. Everyone knows that the feds are pumping tons of money into the economy, but most people are in the dark about exactly where the money is coming from and how to get their hands on it.

That is where the scammers find opportunity.

The FTC reported that two of the most prevalent scams are websites advertising that they can help people get their share of the stimulus package. The scammers send e-mails that ask for bank account information so stimulus funds can be deposited directly into the soon-to-be victim’s account.

Of course, the rip-off artists use the information to drain the bank accounts.

Even more disturbing, the fraudulent e-mails often contain a “worm” that mines a recipient’s computer hard drive and extracts personal information, which can be used for further wrongdoing.

These bogus e-mails appear to be from government agencies and ask for information to “verify” that you qualify for a stimulus payment. The scammers use that information to commit identity theft.

The FTC said that some e-mail scams don’t ask for information but provide links to find out how to qualify for funds. By clicking on the links, consumers actually download malicious software or spyware that can be used to make them a victim of identity theft.

Other fraudulent sites exploiting the stimulus package offer a list of economic-stimulus grants for a small fee, sometimes as low as $1.99.

However, in these variations of the attack, the scammer either steals credit card numbers provided by the user for theft and identity schemes, or uses the small fee as a “negative-option-billing” down payment, which could cost victims hundreds or thousands of dollars if they don’t actively cancel the payment.

“Websites may advertise that they can help you get money from the stimulus fund, and many use images of President Obama and Vice President Biden to suggest they are legitimate; they’re not,” Eileen Harrington, acting director of the FTC’s Bureau of Consumer Protection, said in published reports.

A few weeks ago, I used this column to urge advisers and planners to speak with their clients about medical identity theft. Now it is your opportunity to let them know about the lowlifes who are using the stimulus package as live bait.

Even if your clients are unlikely to fall for these traps, they can pass along the word to friends, colleagues and co-workers.

In these tough times, we all know someone who is hurting. Here is a chance to help, even if in a small way.

Jim Pavia is the editor of InvestmentNews.