They get money for nothing and your cheques for free

PERSONAL FINANCE:If you think ATM scams and internet hoaxes are a thing of the past, think again. The next generation of fraudsters have arrived, ready to fleece the unwary via everything from e-mail to stocks and shares

YOU’RE SKIMMING through your inbox, deleting spam and unwanted Facebook “friend” requests, when a mail that appears to be from the Revenue Commissioners jumps out at you. You break out in a cold sweat.

Did you forget to file a tax return? Are you being audited? Do they want to claw back all that tax relief you got on your Section 22 property portfolio? Relax. According to the e-mail, they owe you money: “Following an upgrade of our computer systems we have investigated your payments and tax returns over the last seven years, and our calculations show that you have made overpayments of €175.25.” You click on the link, which opens a form bearing the Revenue logo. Simply enter your credit card number or bank account details and your refund will be processed, it says.

Tempting as it is to tap in your details, resist the urge. Although it is possible you could be due an unexpected tax refund, the Revenue never sends e-mails that require people to provide information by e-mail or on a pop-up window. Unfortunately you’ve been the target of the latest hoax doing the rounds – the tax rebate scam.

Individuals and businesses have also been receiving bogus phone calls from people purporting to be Revenue officials requesting personal information, such as PPS numbers, addresses and details of earnings, and in some cases demanding payments of tax.

The Revenue advises anyone who receives suspicious calls or e-mails to contact their local tax office and, if they fall victim to this type of scam, to contact the Garda immediately. So far, the tax authorities haven’t received any reports of people being taken in by the hoax. These tax rebate ‘phishing’ attacks appear to have been copied from similar scams being operated in the UK. Indeed, many financial fraud techniques start out in the UK or elsewhere in Europe and after a few months make their way to Ireland.

According to the Irish Payment Services Organisation (IPSO), the problem of ATM card skimming has been resurrected in recent weeks. Thanks to the installation of anti-skimming technology, such as pin-pad shields, at many ATMs around the country, and the introduction of the chip and pin system, the problem had been virtually eradicated in Ireland. However Una Dillon of IPSO says that in the last four to six weeks there has been a “sudden spurt” of criminal activity in this area.

Gangs have been targeting the minority of ATMs that have not yet been upgraded with anti-skimming technology. As before, skimming devices are fitted at the ‘mouth’ of the machine to copy the person’s card details. A micro-camera is used to capture the pin number as the person keys it in. The gang then transfers the skimmed data to a counterfeit card, which is used at ATMs abroad, in countries where the chip and pin system has not yet been introduced.

In the last six weeks, about 25 skimming attacks have been reported to IPSO, nine of which were successful. The Garda Bureau of Fraud Investigation has made a significant number of arrests related to this particular crime. However, individual banks have had to absorb losses of up to €60,000 as a result of the attacks, as Irish banks reimburse customers who have fallen victim to skimming.

Even though individuals can rest assured they will be refunded by their bank in the event of genuine fraud, IPSO’s Dillon asks bank customers to consider the “social aspect” of these attacks and to take greater care in protecting their pin number. A lot of the money raised through this type of financial fraud is used to fund more serious forms of crime.

One of the simplest and most effective preventative measures is to shield the pin pad with your free hand when using an ATM. Many Irish people are deterred from doing so for fear of insulting the person standing behind them in the queue, but remember that without your pin, your card details will be useless to criminals.

Individuals also need to take care in shops when using debit or credit cards by covering the pin console as they use it. At the start of the year, a gang began targeting people in supermarkets, watching over their shoulder as they keyed in their pin number. Another member of the gang would then distract them when they left the shop, and their wallet or bag would be stolen.

This approach can prove very lucrative for criminals, Dillon says, citing the case of one woman who lost €25,000 in a matter of days as a result of such an attack. In the UK, banks do not always reimburse customers who have been targeted in this way, as failing to conceal their pin number is considered negligent on their part. To date, Irish banks have refunded customers, but such a move highlights the need for individuals to take greater personal responsibility for the security of their own accounts.

Finally, if you are thinking of taking a punt on a few stocks, keep your wits about you. Although the infamous US fraudster Bernie Madoff is now firmly behind bars, there’s sure to be a whole new generation of white-collar criminals cropping up in his place. So beware of any Bud Fox types cold-calling and giving you the hard sell on the latest “sure thing” stock. It’s possible they could be phoning from a “boiler room” – a bogus stock broker that uses high-pressure sales tactics to coerce people into buying worthless or high-risk shares.

At the end of June the Financial Regulator published a warning notice about two firms: Borsa Financial (Italy) and New Century Capital (Austria and the UK). The firms were offering investment services to Irish individuals even though they were not authorised as investment firms here. While there is no suggestion that these two firms are boiler room operations, it is a criminal offence for an investment firm to operate in Ireland unless it has authorisation to do so from the Regulator.

The upshot of this is that any Irish person who invested with Borsa Financial or New Century Capital would not be eligible for any compensation from the Investor Compensation Scheme.

So before signing up with any investment firm, call the Regulator at 1890-200469 to make sure they’re legitimate.