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Some Common Scams and How to Spot Them

Updated: Jun 23, 2023

By Curtis Dawson


There are numerous, legitimate activities in cyberspace that give people the opportunity to network, build relationships, find employment, and handle their financial goals. Unfortunately, scammers prey upon these needs by using cyberspace to carry out their criminal activities. While the Internet provides the most common scams, there are still schemes that thrive outside cyberspace.


These numbers are staggering. According to one study, cyberspace victims lost over $3.5 billion to criminal activities in the first half of 2022. This an increase of 53% from the previous year. Internet criminals are always looking for new ways to steal your money. The total losses in 2022 exceeded $10.3 billion.


The Pig Butcher


One scam focuses on people’s needs for developing personal relationships. This scheme is called the “pig butchering” scam. This isn’t necessarily a get rich quick scam perpetrated by criminals. These scam artists could build long-term relationships with their financial target before they carry out their true objectives. Generally speaking, these relationships originate on the Internet.


Scammers communicate with their targets via texts, social media, or dating websites in order to create friendships or romantic interests that seem authentic. These relationships seem legitimate, and the scammer will cultivate a relationship with the prospect over a certain amount of time. This is called the fattening of the pig.


What Happened to Gidya Gadasalli?


People should look for indicators that focus on money-making opportunities proposed by the scammer. A romantic relationship for 25-year-old Gidya Gadasalli turned criminal when her romantic interest began talking to her about financial options that are a sure thing for financial success. Gadasalli had recently come into money through an inheritance from the death of her father.


The criminal convinced Gadasalli to give $10,000 to his business partner who would invest the funds in cryptocurrency trading. The scammer told Gadasalli that the initial investment had been successful, and he encouraged her to invest an additional $86,000. These investment opportunities eventually included six-figure transfers. Gadasalli eventually learned that she had become the victim of a pig butchering scam, and she had lost $8 million of her inheritance.


Gadasalli was misled by the scammers who gave her dividends of around $30,000 per month during the initial phase of the scam. These profits were placed in her legitimate Chase banking account. This was real money that offered further proof to her that the investments were in fact legitimate.


According to one investment specialist, a fake crypto trading platform is a common characteristic of this scam. Their website looks legitimate. The criminals have total control over the data that appears on their website, and the information they publish mimics information that can be found on legitimate and popular websites such as Bitcoin.


At one point, Gadasalli put $3 million into a digital fund linked to the scammer. A short time later, she put an additional $6 million into the fund. Towards the final phase of the scheme, she was still able to withdraw $60,000 to $70,000 in cash per month. Things took a turn for the worse when fund managers started talking about taxes and miscellaneous charges.


She would not be able to make withdrawals until she paid hundreds of thousands of dollars in taxes and charges. These taxes and charges are what pushed her exposure to $8 million. When she interacted with “customer service,” they gave her implausible reasons regarding why she could no longer withdraw money from her account. This is the process that scammers use to fatten the pig that is lead to the metaphorical slaughter. Gadasalli has attempted to sue the scammer, but he is nowhere to be found.


Dating websites provide an effective environment for the origination of this type of scam. People on dating websites can be easily identified as targets because of their desires for inclusion in personal and intimate relationships. Roughly 12% of Americans who used dating applications have been the targets of the pig butchering scam. This percentage continues to grow.


How do you determine the legitimacy of a crypto trading platform? Research the organization. Most legitimate companies are registered with the government. You can find this data at fincen.gov/msb- registrant-search. It can be very difficult to know if an organization is scrupulous. You can also check with the Better Business Bureau that offers reports on organizations. You should contact regulatory agencies if you question the legitimacy of a company.


Car Sales Scams


Scams that focus on the purchasing of a used car from an automotive dealership have become more prevalent over the last several years. The goal of the scammer is to sell an unsafe or damaged vehicle to an unsuspecting consumer. Some people are misled by deceitful safety reports that portray the vehicle in a positive light. The average used car price in California can cost about $35,759.


The best way to determine the worth of a vehicle is to obtain a valuation guide such as the Kelley Blue Book (KBB). You should compare this evaluation with current online prices and dealership evaluations for similar vehicles. Consumers are strongly advised to obtain an independent vehicle inspection as well.


To avoid fraud, consumers should obtain a vehicle history report that includes title, insurance loss, and salvage information. This vehicle history can be found on the National Motor Vehicle Title Information System (NMVTIS) website.


To further determine the true value of the vehicle, consumers should use a checklist that includes vehicle maintenance records and frequency of repair reports and maintenance costs. NMVTIS also offers accurate information about odometer data and flood damage history. These documents cost about $4.


It is important to remember that the dealership has to purchase the used vehicle from someone else before they can put the vehicle up for sale on their lot or advertise the vehicle in cyberspace. The unscrupulous dealership will inspect the vehicle themselves to ensure that they are getting a good price for their money.


This creates opportunities for the scammer to make significant profits on damaged products. Damaged vehicles give dealers leverage when negotiating the sales price. This is where the fraudulent dealership makes its money. The dealer pays the true value; consumers pay the inflated, deceitful value.


How much money can an unscrupulous auto dealer earn through this scam? Millions. These scammers can claim that they did not know that a vehicle had been damaged. This seems unlikely. One observer said the dealer is using the stick my head in the sand defense. Do consumers have legal recourse if they find out that they purchased a damaged or unsafe vehicle? Yes.


In California, a licensed dealer cannot make any untrue or misleading statements regarding the quality of the vehicle. If the consumer takes the dealership to court, he or she would need to prove the following: (1) the defendant represented information as fact; (2) the representation was actually false; (3) the defendant knew the representation was false or was careless when evaluating the vehicle.


The effectiveness of the butchering scam and the flawed vehicle scam depends upon processes that mislead unsuspecting people who want nothing more than to establish personal relationships and to purchase products that are accurately represented in the marketplace. Awareness is the key to avoid becoming a victim of these scams.



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