Beware Internet Scams!

Have you read about those scams where someone tries to get you wire money or use your Paypal account to steal thousands of dollars? Maybe you know someone who has been hit by one of these scams, or maybe you yourself have suffered. I had the chance to intervene on one of these this morning. Here's the scoop:

I started my morning off early, planning to attend my local Rotary club meeting and settling back into some normalcy after the holidays. I sat down with a bagel and orange juice to check my mail, and I quickly got a comment from someone I know in the Phillipines. (I've been working some with folks in that area for outsourcable tasks. Kay (not her real name), has been helping me as a Virtual Assistant.)

This was around Midnight there, so I had a feeling something was wrong.

This is the message I got:

I dont know what to do with my other employer i have been crying for an hour now. [Their client] have emailed me and they says that I should call paypal but its international

I spent some time chatting with her, and found out that she had been tricked into a very dangerous scam. As a virtual assistant, she offers her time to help business people be more efficient. This particular person, had given her an email address, and phone number here in the United States. He claimed to be a financial advisor to a company call Cold Code Co. Cold Code Co, however turns out to be in Russia.

At this point, I could tell she needed help, and I decided to fore go my meeting in the hopes that I might be able to help her.

Here is what I learned about the scam:

• They hired Kay as a virtual assistant, and had her do a handful of small tasks to establish a relationship with her.
• They told her that as a Russian company they could not get a Paypal account, and that they would like her to accept payments for products they sold on her account.
• They placed a product (In this case, a high value, minted coin) on ebay, and set the payment to go to her Paypal account.
• When the payment was received, they told her to withdraw the funds from Paypal and send it to them via Western Union

Fortunately for the buyer, and for Kay, the buyer requested a shipment tracking number. When Kay could not provide it, the buyer opened a Paypal dispute, which froze the funds at Paypal before Kay withdrew them. They had also frozen Kay's Paypal account from any other transactions.

The amount was several thousand dollars. This is a lot of money here in the USA, but in the Phillipines, it's huge. And the buyer was threating all kinds of terrible things to get their money back.

If Kay had followed her employers instructions quickly, the buyer would have been out her money, and the only person she could have lashed out at was Kay.

At this point, Kay was scared, and confused about what had happened. She had never needed to use any of Paypal's dispute features, and she was completely intimidated by the website and their phone system. In fact, she had no way of calling paypal without incurring high long distance fees that she could not afford.

I decided to help her out. I worked with Kay to get all the details we would need to discuss it with Paypal. I then opened a three-way Skype to Paypal, and I acted as her advocate. After working through a couple layers of Paypal phone support, we managed to fully refund the Buyers money, and Paypal waived all related transaction fees so that Kay was not paying for them. They released the lock on her account, and explained that this is a twist on a common internet scam that they have seen before.

Kudos to Paypal

Paypal was great with all of this. They did the right thing freezing the funds. I believe they need to facilitate the resolution a little better. Kay tells me that she would not have been able to work through the process with help, and I believe her. The website was a bit confusing about the lockout, and we had to work through several layers of phone support to resolve the issue.

However, if they had not intervened, the scammer would have gotten away with a terrible crime, and an innocent person would have likely been blamed for the theft.

I'm glad I took a couple hours out of my day today to make a difference. I only wish there was some way to point the authorities to the scammer. I'm sure he's doing the same thing to many other people.

Watch out for these type of scams. Never, ever, handle funds for someone else's transactions online.