Sequence Inc. Fraud Files Blog

Do you get as annoyed as I do with spam emails? Spam and scam emails, for that matter. You can report them, although I suspect it doesn’t really do any good. I am so sick of the emails that claim your data has been compromised and you need to respond immediately with every snippet of personal information you’ve ever had, or your account will be closed.

Did you know that email tax scams happen in Canada too?

Growing in popularity is the eBay “second chance” scam. A seller of an expensive item that you bid on (but did not win) sends you an email saying that the winning bidder never paid for the item. Would you be interested in purchasing it at that bid price? You agree, and the seller directs you to use a service called MoneyGram, rather than the usual PayPal. Apparently MoneyGram doesn’t have many controls in place to prevent fraud, and the transaction goes south from there.

If you travel a lot, you might be interested to know that new U.S. Passports contain RFID (Radio Frequency Identification) chips that may one day be used to store information about travelers, such as fingerprints, face recognition, or retina scans. But how secure is this? It sounds like hackers are already having their way with the passports.

The investment world is rife with scams and swindles too. Sam Antar, a convicted felon and former CFO of Crazy Eddie, Inc. is questioning the Public Company Accounting Oversight Board and their examination of public accounting firms that audit public companies. Mr. Antar has an interesting story in general, as he masterminded a huge securities fraud while CFO of Crazy Eddie.

Companies have spent a lot of time and effort creating “loyalty” programs that are supposed to encourage their customers to shop with them instead of competitors. These programs have included things like frequent flier miles, cash back programs, members-only discounts, and special rebates. Believe it or not, these programs may have actually resulted in lower customer loyalty.

Insurance companies get a bad rap, don’t they? They provide a service, which is essentially paying big bills if we’re in the hospital, or a car accident, or if our house burns down. For that service, you pay insurance premiums. What’s wrong with that? It’s a business, plain and simple.

Life insurance gets criticized too. The bottom line is that you are paying money, the insurance company takes that money and invests its while you’re alive, and when you die, they pay out money to whomever you designate. The insurance company is hoping you don’t die before you’ve paid in enough to cover what they have to pay out. However, the unfortunate reality is that there are different kinds of life insurance, and whole life pays insurance agents some of the highest commissions, while whole life insurance is very expensive for the purchaser and provides little benefit for the increased cost.

Speaking of insurance, Hurricane Katrina lawsuits are finally starting to go to trial. State Farm recently lost a case in Mississippi. The results of these cases will be interesting because the insurance companies were denying claims largely based upon uninsured water damage, while the policyholders are claiming that their houses were damaged by other means.

Thanks for playing. Get your submissions in for next week’s Carnival of Fraud.

Tags: tax, hackers, securities fraud, Insurance, Fraud