Scams & Consumer Risks

Whenever you are faced with a form of communication that appears suspicious (e.g., promotional contests you have won yet did not enroll in) it is important to consider the following:

Whether it seems too good to be true (e.g., a holiday that’s much cheaper than you’d expect);
Whether the communication came from someone you don’t know;
Whether you are receiving communication from an authentic company (e.g., no postal address, official website, questionable contact details);
Whether you have been asked to transfer money quickly;
Whether you have been asked to pay in an unusual way (e.g., by iTunes vouchers or through a transfer service Western Union) in order to become eligible to receive an award or promotional prize; and
Whether you have been asked to give away personal information (e.g., passwords, social security number, banking details)

It is important to note that paying more for something than it is worth (i.e., above fair market value) is not the same as being scammed. Usually a scam will involve theft or fraud where you will not receive the benefit of what is being sold.

For further guidance on the types of scams commonly faced by consumers, and how to minimize the risks that may be faced if you are exposed to a scam, please see below.

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Every consumer is vulnerable to being exposed to scams; which is why it is important to be able to identify and avoid scams. You should be suspicious of anything that sounds too good to be true as it usually is.

Have you received an offer that seems too good to be true or received a threat to pay money for debts you do not owe? Or have you received suspicious notifications from an unknown source asking for your personal information?

Scammers know how to discreetly get your personal information and are getting smarter as technology advances and commercial businesses continue to offer new products and services. It is important that you must remain skeptical of any suspicious, unsolicited promotional activities and research any free offers, “giveaways” or special promotions.

To assist in your identification of SCAMs, please see below for a list of some of the more popular scams consumers are exposed to:

One of the more common scams currently faced by consumers, an unexpected money scam occurs when a scammer contacts a consumer out of the blue to inform them that if they make an upfront lump sum payment they would be entitled to a prize, money or an inheritance.

Under an unexpected money scam the victim will transfer the upfront lump sum payment and will never receive what was promised. Where if they chase up with the scammer they will be greeted with an excuse as to why they have not received their entitlement and that in order to receive their entitlement additional payments are required. ‍

Unexpected money scams can also involve scammers informing their target that they need their target's help to secure a large fortune which they are trying to transfer out of their country. The scammer may state that the fortune is money and/or assets abandoned by a corrupt government or government official. If you agree to make an upfront lump sum payment to assist transferring the funds out of the country the scammer will provide you with a share of the fortune.

A rebate scam involves a scammer contacting a target informing them that they are owed money (i.e. a tax refund, reversal of bank fees, etc.). However, much like an unexpected money scam a rebate scam requires the target of the scam to pay a small administrative fee.

An inheritance scam often occurs when a scammer poses as a lawyer, banker or foreign official and informs their target that they are entitled to a large inheritance from a long-lost relative. In order to create a sense of authenticity the scammer will use official-looking documents in order to generate trust in their target.

Once trust has been established the scammer will inform their target that in order to receive their inheritance they will need to pay an administrative fee and/or inheritance taxes. The scammer may also ask for personal details in order to complete legal documentation needed to complete the administration of the estate and transfer your inheritance. In this instance you may face losing your money and being subjected to identity fraud.

The above-mentioned scams are typically implemented by a scammer located overseas. If you fall for these scams you will never receive anything from the scammer and will lose any money sent.

In order to minimize your risk of exposure to unexpected money, rebate or inheritance scams, Consumer Affairs advises that you:

Remember to be careful of “get-rich-quick” schemes; if it sounds too good to be true it is because it probably is;
Avoid any arrangement with a stranger that asks for an upfront payment (i.e., money order, wire transfer, international funds transfer, cryptocurrency transfer);
If an e-mail from an unknown contact appears suspicious, delete the e-mail and do not download any attachments;
Remember that Bermuda Government departments, banks and public utility providers will never contact you asking for an upfront payment in order to claim a rebate;
Confirm the identity of the unknown contact and do not use the contact details provided to you;
Conduct a search online using the exact wording of the offer as many scams can be identified this way.

As opposed to your standard consumer scams offering a prize, money or a rebate, threat and penalty scams use threats to instill fear into their targets in an attempt to coerce them into providing their personal details and/or access to their finances.
A scammer of a threat and penalty scam will likely call and/or e-mail their target out of the blue threatening them with the risk of an arrest for an outstanding bill, speeding ticket or outstanding unpaid taxes (i.e. payroll tax, social insurance or land tax, etc.)

During the initial contact (i.e. phone call or e-mail), the scammer will attempt to pressure their target into paying immediately and that failure to do so will result in the police being sent to your house to pursue an arrest.

Scammers using threat and penalty scams typically target vulnerable consumers. Such vulnerable consumers may include, but are not limited to, elderly consumers or foreign workers whose first language is not English and are unfamiliar with the laws of Bermuda.

When dealing with vulnerable consumers, scammers will present themselves as officials for various tax departments (i.e. Department of Social Insurance, Land Tax Office, etc.) where they will threaten their targets with arrest if they do not pay an outstanding tax bill.

When dealing with foreign workers, scammers will present themselves as Immigration Department officials and threaten their targets with deportation unless fees are paid to correct errors in their work visas.

Threat and penalty scammers also pretend to be employees of trusted companies (i.e. your bank, BELCO, OneComm, Digicel, etc.) where they will threaten to cancel your service or charge penalties if you do not pay an outstanding bill immediately.
In either circumstance a threat and penalty scammer attempts to instill fear in their target and coerce them to act to their own detriment without first thinking about whether the scammer’s story is true.

If you receive a threat and penalty scam through your e-mail, the e-mail will likely include an attachment or link to a fake website where you will be asked to download “proof” of the outstanding bill or fine the scammer is threatening you to pay. Consumer Affairs advises that you do not download any attachments as this may expose your computer to being infected by a computer virus and/or malware.
In order to minimize your risk of exposure to threat and penalty scams, Consumer Affairs advises that you:

Stop, think and consider whether the scammer’s story is true;
Do not feel pressured by a threatening call or e-mail;
Remain mindful that a Bermuda Government department or trusted company will never ask you to pay by unusual methods (i.e. gift card, wire transfers or cryptocurrency); and
Verify the identity of the person who contacted you by calling the relevant organization directly;
You should be able to find the relevant organization’s contact details through the Bermuda Yellow Pages, a past bill or checking their official website;
DO NOT use the contact details provided in any suspicious e-mail you receive or are given during a phone call with a suspected scammer.

As technology advances scammers become more and more intrusive into their targets lives. It has been observed that scammers will contact their targets (i.e. phone call and/or e-mail) and inform them that their data security has been compromised and assistance is required to resolve their issue.

The scammer will communicate that by granting remote access to your personal computer (i.e. laptop and/or desktop) and following their instructions they will help fix your data security issue. Instead of helping, the scammers will either steal their target’s personal data and/or install malware into their computer.

For clarity “malware” is dangerous software that is commonly delivered by e-mail and can appear from legitimate sources and installed on your computer (or other devices). If malware is introduced on your computer or mobile device it may introduce:

Viruses;
Spyware;
Ransomware
Trojan horses; and
Keystroke loggers.

Ransomware allows scammers to encrypt your device (i.e. lock and or restrict access) to prevent their target from using the device until a payment is made to unlock it. However, Consumer Affairs notes that payment to the scammer does not guarantee that your device will be unlocked/unrestricted or free from hidden viruses.

Keystroke loggers and spyware allow scammers to record exactly what their targets type into their computer keyboard to find out their target’s personal details, including: login details, passwords, banking details or personal information. When this happens the scammer may either use this personal information against their target or sell their target's personal information to someone else who may do further harm.

Once installed, keystroke loggers and spyware allow the scammer the ability to control the contents of your computer (i.e. e-mail and social media accounts, banking, etc.). The scammer may then access their target's contact list and attempt to replicate their scam with their target's friends and family.

To avoid having your computer or mobile device being exposed to malware, Consumer Affairs advises that you do not open e-mails from unknown sources as they may contain links or attachments that contain malware.

In order to minimize your risk of exposure to computer and mobile device scams Consumer Affairs advises that you:

Exercise caution when encountering free downloadable content (i.e. music, games, movies, access to adult sites);
Keep your office networks, computers and mobile devices secure (i.e. regularly update security software, change passwords and periodic data backups);
Keep your data backups stored offsite and offline; and
Do not open attachments or click links in suspicious e-mails or social media messages you have received from unknown sources.

Identity theft and phishing scams occurs when scammers attempt to obtain the personal information of their targets in order to commit fraudulent activities such as:

Making unauthorized purchases through credit cards or online banking;
Opening fake bank accounts or public utility accounts (i.e., electricity or electronic communications);
Taking out personal loans under the name of their target;
Carrying out illegal business under the name of their target;
Selling their target’s personal information to other scammers for further illegal use.

The theft of identity and personal information can be both financially and emotionally impactful for the victims of identity theft and phishing scams. It can take months for the victims to reclaim their identity and years to fix any damages caused.

Phishing occurs when a scammer contacts their target out of the blue (i.e. e-mail, phone, social media, etc.) pretending to be from a legitimate business (e.g. bank, social utility provider, etc.). Often the scammer will direct their target to a fake version of the legitimate business’s website.

Alternatively, a scammer may call their target, portraying themselves as their target's bank or a luxury goods provider claiming that someone is trying to use their credit or debit card. The scammer will advise their target to contact their personal lender or banker to resolve the “issue”. However, the scammer will not hang up the phone and keep their line open in order to obtain your personal banking details.

When you try to call your personal lender or bank the scammer will simulate a real call by pretending to be your bank and ask that you provide your bank account and security details. Once the scammer has obtained your personal details the scammer will then have the ability to use your personal information at your detriment.

Under no circumstances will your bank or financial service provider send you an e-mail asking you for any personal information, including but not limited to: (i) debit/credit card numbers; (ii) account numbers; (iii) personal access numbers; or (iv) Internet Banking log-on information.

Consumer Affairs advises that you remain mindful of when you receive communication from an unknown commercial entity as phishing scams are getting smarter and more complex in order to appear authentic.

Phishing e-mails can look genuine by using a legitimate company’s logo and formatting and a link which leads to a website that seems genuine but isn’t.

Remain mindful that genuine e-mails from financial service providers and utility service provider don’t include suspicious links. If you get one of these e-mails do not respond and do not click on any of the suspicious links. Close the e-mail message immediately. If you receive suspicious e-mails forward them to your financial service provider.

In addition to stealing personal and financial information and your money, phishers can infect computers with viruses and convince people to participate unsuspectingly in money laundering.

‍Fake surveys are another way in which scammers may obtain your personal information and steal your identity. Through fake surveys scammers will offer their targets prizes or rewards (i.e. gift cards to well-known retailers) in return for completing an online survey.

The survey will likely include a range of questions specifically designed to have the scammers target disclose their personal information.

It is important to remember that the crux of any identity theft scam is that the scammer will ask their target for personal information. Consumer Affairs advises that as a consumer you remember to keep your personal details to yourself and keep them secure. Giving away your personal information can be just as bad as giving away money.

In order to minimize your risk of being exposed to the risks associated with identity theft scams, Consumer Affairs advises that you:

Think twice about what you say and do online (i.e. social media, blogs, online forums);
Stop and think twice before you complete surveys, or participate in online competitions, that have been sent to you out of the blue;
Stop and think twice before you click on links or attachments included in e-mails from unknown and/or suspicious contacts;
Stop and think twice before “befriending”, “following”, “liking” or “sharing” something online;
Remain mindful of the necessity to exercise caution when faced with requests to provide your personal details
Use the phone book or conduct an online search to confirm the validity of a suspicious e-mail received from what appears to be a legitimate business and do not use the contact details provided in the suspicious e-mail.

Scammers are heartless and are likely to identify their targets during desperate times of need. Recognizing the generous nature of people trying to help those that are facing difficult times, scammers will attempt to take advantage of people seeking to donate to a good cause.

Charity scams involve scammers collecting money from people making donations to charitable efforts. In order to develop a false sense of authenticity, scammers will portray themselves as employees or officials for a legitimate cause or charity. Alternatively, scammers may create a fake charity. Often scammers will use charity scams following the onset of a natural disaster or crisis.

Charity scams have the duel effect of stealing money from people seeking to donate towards a good cause and diverts much needed financial support away from legitimate charities. Consumer Affairs cannot overstate the importance of verifying the authenticity of a charity prior to making any donations (i.e., verify the registration of an unfamiliar charity with the Registrar of Companies).

Alternatively, scammers may also seek to take advantage of vulnerable consumers seeking medical help. Miracle cure scams are designed to take advantage of desperate consumers suffering from serious medical conditions by offering a range of medical products and services which are often sold as being “holistic” and “alternative” medical treatments which promise quick and effective results. Such medical products are often promoted using false testimonies from people who have been “cured”.

Weight loss scams promise dramatic weight loss with little or no effort. These types of scams often involve the target being required to adopt an unusual or restrictive diet, practice “revolutionary” exercise, use “fat-burning” devices, weight loss pills, patches or creams. As part of a weight loss scams, scammers will often require their target to make a large lump sum payment up front or enter into a long-term contract to receive goods or services.

Fake online pharmacies offer consumers counterfeit drugs and medicine at very cheap or discounted prices and do not require a doctor’s prescription. The drugs made available through fake online pharmacies often have limited or no active ingredients which can have adverse or lethal consequences for the user.

In order to minimize your risk of being exposed to the risks associated with charity and medical scams, Consumer Affairs advises that you:

Ask to see proof of registration if you are approached by a representative of a charity or relief aid fund;
Consult your healthcare profession if you are considering a “miracle” or “instant fix” medicine, supplement or other treatments;
Ask yourself if this is really a miracle cure and why hasn’t your healthcare provider not told you about this before?

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Having discussed some of the many different types of scams that consumers of goods and services may be exposed t, the purpose of this section is to discuss the stages a scam will go through in order to be effective.By understanding the fundamental stages of an effective scam, as a consumer you will be able to better identify a scam and avoid being exposed to harm.

When a scammer approaches their target it will always come with a story specifically designed to make the target believe in what they're saying. In support of their story, the scammer will pretend to be something they are not (i.e. a government official, an investment advisor, a business representative, etc.). To deliver these lies a scammer will use a number of different forms of communication.

Online Communication

Email: E-mail is a commonly used method of delivering a scam as it is a cheap method of communication which can reach a large number of people;
Social Media: Social networking platforms, dating sites and online forums allow scammers to obtain personal details and create an artificial sense of trust with potential targets of a scam;
Online shopping: Online shopping, classifieds and auction sites are used by scammers to target buyers and sellers. Initial communication with their targets is often made through authentic appearing, fake websites. If you suspect you are exposed to an online shopping scam, Consumer Affairs advises that you confirm the availability of secure payment options and beware of unusual payment methods (i.e. wire transfer, international wire payments, cryptocurrency transfer).

Over the Phone

Phone Calls: Scammers will often call their target’s mobile phone or home as part of their scam method of delivery. With the availability of cheap Voice Over Internet Protocol (VOIP) calling, this means that call centers can operate overseas while using telephone numbers that look like they are Bermuda Numbers. Additionally, caller identification can easily be manipulated or disguised to make the scammer’s phone call appear authentic.
SMS Text Messages / Chat Applications: Scammers will often send their targets text messages as part of competition or prize scams. If their target responds to the text message they will be subjected to premium rate charges and/or find themselves signed up to a subscription service that is difficult to exit. Text messages can also contain attachments or links to malicious software (i.e. photos, songs, games or apps). Consumer Affairs advises that you do not respond to or click on links in text messages unless you can confirm the source of the text message.

Home Communication

Door-to-Door: In some instances scammers will visit your home in an attempt to promote the sale of goods or services that they have no intention of delivering or are of poor quality (i.e. misrepresentation).
Bulk Mail: Scammers will often use bulk mail to send lottery and sweepstake scams, communicate “investment” opportunities and unexpected money scams and send fake inheritance letters to the homes of their targets.

Regardless of the method of communication that is used by a scammer, the story communicated is always the bait. If you are found nibbling on the bait the scammer will then seek to move you to the next stage of their scam.

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Having identified the types of scams consumers are often subjected to, and the stages of a scam, the following section outlines the “golden rules” to protecting yourself from being involved in and harmed from a scam.

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If you’ve given away money or personal information because of a scam, Consumer Affairs advises that you consider the following steps:

Protect yourself from further risks
Check if you can get your money back
Report the scam to Consumer Affairs

If you’ve been scammed there are steps you can take to protect yourself from things getting worse. What you need to do depends on what has happened.

If the scammer visited your residential address, called you, or sent you a message, Consumer Affairs advises that you ignore them but keep a record of what has happened so you can report it.

If you suspect that you have transferred money to a scammer, that your bank account reflects suspicious activity (i.e. ‘unauthorized transaction’) or you have mistakenly provided personal details to a suspected scammer (i.e. account details, PIN number, etc.) Consumer Affairs advises that you contact the Financial Crime Unit with the Bermuda Police Service and your personal bank immediately.

After you’ve told your bank about the scam keep an eye on your bank statements and look out for any unusual transactions. If you think your password has been stolen Consumer Affairs advises that you change your password as soon as possible. If you’ve used the same password on any other accounts you should change it there too.

‍You might be able to get your money back after you’ve been scammed. What you should do, and whether you will get a refund, depends on what happened. When contacting your bank Consumer Affairs advises that you clearly explain what has happened and ask if you can get the transaction reversed and receive a refund.

If you have used a debit or credit card or PayPal to pay for something and you haven't received the goods or service you purchased, you might be able to get your money back. Upon filing a scam report your bank can ask the seller's bank to refund the money. This is known as a 'chargeback scheme'.

If you have to pay for something using a bank transfer or direct debit, and haven’t received the goods or service you purchased, Consumer Affairs advises that you contact your bank immediately to let them know what has happened and ask if you can get a refund. Most banks should reimburse you if you’ve transferred money to someone because of a scam. This type of scam is known as an ‘authorized push payment’.

If you are not happy with how your bank deals with your scam report, Consumer Affairs advises that you submit a formal complaint. If you are unsatisfied with your bank’s response to your complaint, it is advised that you submit a complaint with the Bermuda Monetary Authority. If the Bermuda Monetary Authority decides that you have been treated unfairly, the Bermuda Monetary Authority has legal authority to comply your bank to operate fairly.

If you have used a money transfer service (i.e. Western Union) it is unlikely you will be able to get your money back. There Are things you can do to protect yourself if you ever need to use a money transfer service again.

You should:

Only send money to someone you know
Choose a password that’s hard to guess and don’t share it with others

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There are things you can do to protect yourself from being scammed online. If you are buying something on a site you have not used before, Consumer Affairs advises that you spend a few minutes checking the website; starting with the company’s contract terms and conditions. The company’s address should have a street name, not just a post office box.

Following a review of the company’s website, Consumer Affairs advises that you check to see what people have said about the company. It is worth looking for reviews on different websites and do not rely on reviews the company has put on its own website. Also, do not rely on seeing a padlock in the address bar of your internet browser. The existence of a padlock in the address bar does not guarantee you are buying from a real company.

Do not click on or download anything you don’t trust (e.g. if you get an email from a company with a strange email address). Downloading suspicious content could infect your computer with a virus. Additionally, Consumer Affairs advises that you make sure your antivirus software is up to date to give you more protection.

Some online scams try to get you to provide your personal information (e.g. the name of your primary school or your social security number). Scammers can use this information to hack your bank accounts. If you come across sites that ask for this type of information, without an obvious reason, first check that the company is legitimate.

Make sure you have a strong password for your email accounts that you don't use anywhere else. Some websites let you add a second step when you log in to your account (i.e. “two-factor authentication”). Two-factor authentication makes it harder for scammers to access your accounts.

Additionally, Consumer Affairs advises that you familiarize yourself with how your service providers will contact you (i.e. your bank, electricity and electronic communications service providers). Check your service provider’s website to see how they will and won’t communicate with you (e.g. find out what type of security questions they’ll ask if they phone you).

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Scams ANd COnsumer risks

overview

Types of Scams

How Scams Work

The Golden Rules for Protecting Yourself

If You Think You have Been Scammed

How to Protect Yourself Online