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The Anatomy of Money-Mule Scams
Brian Krebs of the Washington Post's Security Fix blog has up an article on work-at-home money mule scams (backgrounder blog post here). These operations offer victims hundreds or thousands of dollars per week for moving money through their own accounts — a critical piece of the infrastructure for profiting from identity theft and phishing. The article links to the site of a UK fraud fighter named Bob Harrison, who lists hundreds of fradulent money-mule operations.
Last year I had someone send me a Money Gram money order to cash for something I was selling on craigslist. I was kinda suspicious when he asked to cash a check for more than I was selling the item for....
Now I have sold stuff online for years and can usually spot a fake immediatly...This one I had to take to a bank to confirm!
Someone had stolen a roll of blank money gram money orders and entered a valid serial number and everything. The only thing wrong was the micker ink. The numbers at the bottom of that check were standard ink, not magnetic...
I still have that check on my fridge.
My blog
I have been trying this myself for a long time. I have responded to every email I have ever gotten. None have ever contacted me back. I would love to see what I can torture them with. If no one has seen this you have to go hear. www.419eater.com Some of the things they make them do is hilarious.
MISSING - Sig file. 2 years old black and white and very funny. If found please email me.
....since you agreed to their Terms of Service.
I'm too lazy to look up a citation at 7:30 in the morning, but the last time I looked over the PayPal TOS it pretty much said "we reserve the right to take money out of your account whenever we want to, and your only recourse is to ask us nicely to have it back. Say 'please' and we might consider it."
Don't ever leave more money in your PayPal account than you can afford to lose.
For what it's worth, I think a court of law would have agreed in this case that the woman was responsible. It's impossible to really say without details of the eBay auction in question, but she took the customer's money. What she did with it after that is not the customer's problem. If she took his money in exchange for a service/product that she could not provide, she owes the customer his money back.
I know, replying to my own post is bad form - but I failed to mention that eBay now owns PayPal, so they are effectively one and the same.
Absolutly I accept other forms than cash. Craigslist is only really effective because it is all over the US for free...I have only done one local deal and it WAS cash. Requiering cash for non-local deals is a good way to not sell anything.
My Experience
I have found Paypal to be very good so long as you send to a confirmed address and get tracking. I have had several people try and argue it but once I send Paypal the tracking number the dispute goes away in my favor.
Personal checks are riskier but I still haven't had that much of a problem. I always deposit them first and only ship once it has cleared. In over 1,000 check/money order transactions I have only had one bad check. And the check was bad for lack of funds. The person paid me immediatly with a money order plus my bank fee.
Legit money orders are usually so easy to identify that I would ship "at risk" before depositing them. I have run across 4 people trying to pass off fake money orders and never lost anything to them.
The grandparent is note worthy only because it was actually convincing in all but one detail.
I have had well over 20,000 online transactions and by following the rules above I have had about 30 problems and never lost money on any of them.
The moral of the story is:
Online business is safe and effective for everyone involved so long as you don't do anything stupid like ship before confirming payment and always get tracking numbers.
Give him the number to the US embassy. If he has really been robbed and lost his passport they'll help him out.
In addition to money mules, there are also "goods" mules who help transfer fraudulently obtained goods overseas. The typical situation is: ID thief uses stolen card information to buy electronics from a "cardable" website (one which doesn't do a lot of checks on whether the person using the card is the real cardholder). The thief is based overseas, but knows that having goods shipped there might (at best) raise red flags and (at worst) lead the police right to them. So they convince some poor, greedy saps that they are helping out a small overseas company. The goods mules gets paid small sums to receive goods and then reship them.
The particulars might differ based on situation, of course. I've heard of the scammers using images taken from Google Images to convince the mules that they (the scammers) are really a highly attractive woman who just so happened to have fallen in love with them and needs their help with her struggling business. Yes, people fall for this. Partly because the scammers are good at what they do and partly because some people are just greedy idiots. They mentally block out any red flags because of the promise of money.
On one hand, the mules are really sad and pathetic. On the other hand, they get me mad because without them much of the identity theft/eBay fraud/stolen credit card purchases, wouldn't be possible (or at least would be much easier to track).
My sci-fi novel, Ghost Thief, is now available from Amazon.com.
They don't. But, as someone else mentioned the paypal TOS say they can basically take whatever money out of your PP account at will to cover whatever, whenever, at their discretion with no limits and your only recourse is binding arbitration. PP sucks. I hate them. They act like a bank with no limits, no rules, no recourse.
... but they're not going to get any money from your credit card. 'Blanket authorizations' are specifically prohibited by Visa/MC. You can not agree via PP TOS to allow them to hold your credit card as arbitrary security.
That said, the solution to dealing with PP is simple. Never *ever* leave money in your PP account. Either don't link it to a bank account or use one with little to no money in it. Preferably link to your credit card - one with very friendly rules about reversing charges. PP will wipe out your account and push you negative
I'm not advocating knowingly using the mule scams to actually make money - that's fraud and illegal.
You can get rich if you own a politician, but you have to be rich to buy one in the first place.
Be sure to check out the approach used in the "My Butterfly Guy" rouse used by some very convincing scambaiters... Read through the whole story, it really is incredible how it all played out...
God look at me, I'm just a man, but you tell me I'm not just a man, so hard to understand, after all, I'm just a man.
"Pyramid schemes now come in so many forms that they may be difficult to recognize immediately. However, they all share one overriding characteristic. They promise consumers or investors large profits based primarily on recruiting others to join their program, not based on profits from any real investment or real sale of goods to the public. Some schemes may purport to sell a product, but they often simply use the product to hide their pyramid structure."
WTB [sig], PST!!!