Cooperation heads off scams

0 Comments | Gazette, The (Colorado Springs), Jan 25, 2005 | by JIM BAINBRIDGE THE GAZETTE

Just as crooks have learned that there is money to be made on the Internet, they are finding it can come back to byte them, too.

A cooperative effort between the Colorado Springs Police Department and the Better Business Bureau of Southern Colorado is helping residents avoid getting scammed while creating a sort of online database useful to consumers nationwide.

Go on Google with a query about, say, American Consumer Benefits, and you will find an alert written by Katie Mitzner, communications director of the local BBB, that will resonate in Spokane, Wash., Minneapolis or Richwood, Ohio, where people also have been fleeced.

An alert posted on the local BBB site last summer about con artists who operated under the name C Direct and nine other aliases has helped put them out of business in this region. An Oct. 21 posting on the Hawaiian Vacation Scam contributed to the arrest and indictment of the two perpetrators in California a month later.

"It's really a great partnership," said Sgt. Bobby Ryan of the Colorado Springs Police Department computer crimes unit. "The problem with Internet fraud is that a lot of it takes place outside the coun- try. We've found the best way to deal with it is to educate the public, to find ways to publicize what scams are out there.

"We submit information to (the BBB, and they put out an alert that we can circulate here, and it also goes onto their Web site where it is seen by everyone. We get calls from all over the country that help with our investigations."

Sometimes the flow of information goes the other way. Somebody at the BBB will get a call about a particularly egregious scam or spot a trend in the online filings and call Ryan.

And it isn't all passive reporting at the BBB.

When it became clear that the Hawaiian Vacation Scam was affecting a lot of Coloradans, the BBB became more proactive after issuing its alert, to see if it could help stem the flow of Colorado money out of consumers' pockets.

"From one of the people who had sent in a trip deposit we found out the name of the bank (World Savings in Sacramento, Calif.) and called them, hoping they would help," Mitzner said. "They were fantastic. They got their fraud department involved and contacted the area police. There was videotape taken of people coming and going from the bank.

"The banks are usually quite cooperative because they don't want their names smeared or to be involved in these scams."

By the time Sheryl Denise Davis, 50, and Daniel Wallace Smith, 43, were picked up for investigation of mail fraud Nov. 21 at the Silver Legacy Hotel and Casino in Reno, Nev., they allegedly had taken more than a quarter-million dollars with various travel scams. The scams included $59,000 from 30 Colorado families, eight in Colorado Springs.

The local swindle had begun in late summer when Davis and Smith allegedly placed ads in The Gazette and the Denver Post (with bad checks) promoting heavily discounted vacations to Hawaii including one to -- and this was a giveaway -- the "Island of Waikiki."

The BBB alert from Mitzner's office was picked up by the AARP Elder Watch, widening the circle of information online, and the reports from three or four victims went from the BBB to the Colorado Springs police and on to Sacramento to assist the investigation.

A similar team effort led to shutting down the C Direct scam here, which lured people in with the promise of jobs paying $14 to $17 an hour.

The jobseeker would answer an ad in the local newspaper by faxing a resume to a number or e-mail address given in the ad. Within hours, someone from the company would call and tell the victim to fill out a job application online. The online application form looked official and, as might be expected in an employment application, asked for social security number and checking account information for use with direct deposit of the paycheck.

"It was particularly frustrating," Ryan said, "because the money was wired out of the country to Mexico. It was $300 here, $600 there, not very big until you add it all up. We passed on what information we had to the Feds, but there wasn't much we could do except to warn the community. Katie wrote the alert and posted it; we faxed it to every employment agency in the area. But because we got the word out, we have had no C Direct complaints here in several months."

The value is in how wide a net the BBB online presence casts. During December there were 7,364 visitors to the local BBB site, averaging about 12 page views. About 92 percent of the 22,549 reports read during the month were viewed online.

"Our first priority is the people of southern Colorado," Mitzner said, "to make sure they have the alerts, access to reports and the means to file complaints. With the Web site, people can launch a search any time of the day or night, not just during office hours."

PROTECTION FROM ONLINE SCAMS

Use common sense. If it seems too good to be true, it probably is. Trust your gut feelings -- especially when you have a bad feeling about an offer or a company.