Impulsive response could cost you dearly in pump and dump and blue screen scams: Internet Scambusters #684
Most investors know what pump and dump scams are but the opportunity to make a quick buck sometimes overrides common sense in detecting some of these clever tricks.
Crooks hope we'll act without thinking things through with these schemes, as they do with other scams like computer alerts and bogus utility notices.
We'll cover all these issues and explain how to avoid these con tricks in this week's Snippets issue.
Let's get started...
Latest Pump and Dump, Tech Support and Utility Scams
Investing in stocks has always been a gamble, but if you're the kind of person who likes to speculate on stock prices that are affected by current events, you have to be extra vigilant for pump and dump schemes.
Pump-and-dump scammers buy the stock cheap, spread the rumors, and then reap the rewards when prices rocket.
As we've previously reported in Are “Hot” Stock Tips Really Hot?, they come up with all kinds of tricks for manipulating stock prices.
So it's hardly surprising that their current tactics include floating bogus stories on social media networks to spread their gossip.
Or they trick bona-fide distributors of press releases to circulate fake announcements that cause stock prices to move up or down, while the crooks make their killing.
Scammers also create fake Internet pages that mimic well-known and respected financial websites.
For instance, in the past few months, crooks created a bogus Bloomberg News page suggesting that potential bidders were lining up for another well-known social media company, Twitter.
The story prompted a huge surge in Twitter's stock price, from which, presumably, the scammers made a small fortune.
Action: You can't ever be sure of the reliability of rumors and reports that might affect stock prices. But you can limit the risk of being scammed by:
- Checking reports on multiple reputable websites -- though even these can be caught out when rumors spread like wildfire.
- Carefully checking the Internet address of any information site you're visiting. For instance, Bloomberg is on bloomberg.com, whereas the phony story was on a different but similarly named site.
- Looking for errors or poor grammar in supposed news stories. The Bloomberg fake misspelled the CEO's name.
- Resisting taking action on the basis of a story on social media. Well-founded rumors are unlikely to surface there first.
Above all, don't behave impulsively. Think twice -- or more -- before making your move.
Bogus System Failure Warning
Avoiding impulsive behavior is also key to sidestepping a scam based on one of the most loathed and feared Windows computer malfunctions.
It's the so-called "Blue Screen of Death" (BSOD), signaling a system failure.
You'll know it if you see it. You're in the middle of doing something on your PC, when whatever you're viewing disappears, the screen turns blue with white text warning of a system malfunction -- plus all sorts of code numbers and confusing terms.
If you get a BSOD, you're supposed to switch off your computer and restart it. Then, if it happens a couple more times, you'll know you're in trouble and it's time to call in an expert.
But while you're in panic mode, you may be tricked by a fake BSOD with a different message.
It tells you to call "Microsoft technicians" on a toll-free number. But if you call it, you'll be asked to allow the tech access to your PC and then charged a hefty fee for the supposed repair.
In reality, the tech simply removes the code that threw up the fake BSOD, which you may have originally installed by clicking on an ad or installing some dubious free software.
Action: If you get a BSOD with a tech support phone number, it's a fake. Don't make the call.
You may be able to remove the offending code by shutting down your PC and then restarting.
Or you may be able to remove it using security software.
If all else fails, get professional help -- but from a true expert, not a scammer.
No Such Leak
No PC required, however, for another costly notification that could turn up at your home -- a warning that a leak has been detected in the water supply to your home or the sewer pipes that run from it.
In most state and local building codes, homeowners are responsible for the mains and sewer piping that runs through their property.
In other words, while it's on your property, anything that goes wrong with the piping is your responsibility. After it reaches the street, responsibility usually reverts to the water authority or local government.
In the past, you might have received junk mail, which may look like a bill, warning you of this responsibility and offering special insurance to cover the cost or any repairs on your property.
(You should speak to your insurance broker about this coverage, not respond to junk mail).
In the new scam, victims find an official-looking "leak detection" notice posted on their front door, apparently from the water/sewer company, perhaps with a copy of the company's logo.
In some cases, the scammers may also spray paint a line from the water meter to the building structure, to make it seem even more real.
They've even been known to actually damage the water line inside the meter enclosure.
The notice has a phone number. Victims who call it are told they must pay a hefty repair bill -- often around $1,000 -- upfront.
Action: If you get one of these notices, call the relevant utility company. They'll usually confirm it's a scam and come out to inspect your water or sewer lines.
Unfortunately, if the piping has been damaged, you could be saddled with a repair bill anyway but at least you'll get the job done properly.
Alert of the Week
If you own a Dell PC (and it is one of the biggest selling brands), your computer could be vulnerable to a hack attack because of a legitimate but insecure identifying "certificate" installed on the machine.
Only certain models are affected and the company has posted a fix that will check for and remove the vulnerability.
There are also instructions for manual removal.
Better to be safe than sorry. Check it now.
That's all for today -- we'll see you next week.