Hacker News Reader

Comment by myself248 | Hacker News Reader

I would love a better understanding of modern scams and crime in general.

Like what does "money laundering" look like on the ground, how would I know if someone around me was trying to do that?

I've had some random Amazon items show up addressed to me, but I didn't order them, and I think that was part of a scam, but I never fully got my head around how it works.

I hear about various "work from home" jobs actually being scams, but what's going on there? Not just scamming the workers out of their personal money, I mean, like using the workers as the arms and legs of a larger criminal enterprise. What's that all about?

I would watch a show on this, if it had better-than-mythbusters quality of explanations, think more like Connections or Newton's apple.

View on HN

Every time that I or a friend has ended up in an even mildly not-everyday financial situation there was IMMEDIATELY a scam waiting there.

Trading in a car? Last-minute they discount the trade-in value due to damage and hope you won't realize that's already counted in the KBB value.

Car's making a weird noise? The mechanic wants to replace your struts for 1800$ even though the sound is just from the brakes being worn down.

Inherited money in a trust? The trust manager calls you to "discuss your plans" and get you to let them manage the money without your ever seeing it.

Miss paying taxes in a state because you thought you didn't owe them anything because you didn't actually live there? I'm still getting fake letters that try to scare me into calling them even though the bill was cleared up. years ago.

That's just off the top of my head. I swear sometimes it seems like this whole country is build on scams. It's fucking depressing.

It feels like everything here is predatory by some law of thermodynamics. Anything that moves must be powered by the exploitation of someone, and no change may happen without the simultaneous ratcheting up of some mechanism of extraction.

Profit has an inexorable tendency to decline, and thus the squeeze.

The hidden extra cost of sales tax and tip when you go to pay in America feels very much like a scam. I don't understand why the cost is not just exactly as advertised like everywhere else.

Because the entire nation has been brainwashed into believing that it's your responsibility as a customer to make sure someone else's employees are well compensated. It's literally the biggest scam going on currently in US, and you will get people(including here on HN) passionately defending it.

What's missing are transparency laws. Every business should give a breakdown on where cost for a service went. If that breakdown does not cover compensation to the employees then it should be illegal.

I was even more surprised to find out that delivery services don't pay tip to drivers on top of the agreed upon rate for their service. Instead the rate they're are paid is adjusted as per the tip provided so that the total amount of money they make remains the same per delivery.

It can only be considered a scam for the tourists, because everyone in America knows that prices in the menu are 30% less than the real prices, and mentally adjusts for it.

You go in for a medical procedure. There are multiple entities that send you a bill, directly to you and also to your insurance. Normal practice seems like it is to wait and see what the insurance will cover, and after a reasonable amount of time (and getting a statement of benefits from the insurance), you pay the difference. Meanwhile you've been reported to the credit bureaus, so basically anyone can see that you had a recent medical procedure with potentially to-be-settled balances.

A couple years later you start getting calls from collection agents saying you owe money, often times only double-digit values. They hound you till you give in an pay it (after all, how can you verify something that was several years old?). All because when you went to the hospital billing clerk, they can't tell you how much you owe the third-party pharmacy, or the radiologist, or the independent anesthesiologist that bills you at some random time anywhere from 1 month to 3 years later.

You probably know this already, but for the general audience: you don't actually owe a debt to a collector if they can't prove to you that you owe it, and they're typically very bad at that. (See https://www.bitsaboutmoney.com/archive/the-waste-stream-of-c...)

> I hear about various "work from home" jobs actually being scams, but what's going on there?

There's a lot of variants, but a couple of the most common ones are:

1) "Welcome to ScamCo! Here's a check for $X to help you pay for these work supplies, send us back the extra after you're done." (The check bounces; the repayment of the remainder doesn't.)

2) "Welcome to ScamCo! You'll be my personal assistant, please buy me some gift cards / cryptocurrency / whatever." (The payment to cover the cost of the cards bounces; the gift cards / cryptocurrency / whatever are unrecoverable.)

3) "Welcome to ScamCo! You'll help me move money between my bank accounts." (The bank accounts are stolen; the mark is working as a money mule.)

4) "Welcome to ScamCo! You'll help us reship packages." (The packages are stolen goods.)

Looks like 50% of those scams could be eliminated simply by the general public not accepting cheques.

I don't think I've seen one here for at least a decade and a half, same for signatures with credit cards.

Similar scams are done in Europe, where checks are almost-extinct. Sorry, scammers will always find a way

How though? A direct bank transfer in Europe is nearly completely impossible to reverse, once you have money in your account it's staying there.

The "money agent" acts as a cut-out and delay tactic.

Usually it's combined with a parcel re-shipping scam.

It works like this: "Sell" high-priced items on eBay, use the local bank account of the mule to collect the money. The victims will trust this process because a local bank account is involved. The mule now transfers that money through irrevocable money orders into a non-extraditory country.

The victims will go after the mule, but the police will take some time, so you get 2-4 months out of a mile until he is arrested.

At the same time, you order high-priced items using stolen credit cards and have them delivered to the mule. The mule repackages them and sends them to the scammers. The shops will go after the mule.

Ah. That makes sense - thanks for explaining.

Until bank-to-bank 0% fee services like Zelle become more popular, checks are still the best way to pay someone a significant amount without a chunk getting taken out as debit/credit fees.

Thankfully people these days know that checks that aren't cashier's checks are nearly worthless. I wish more people verified the check over the phone before accepting it but it's a start.

Absolutely - or if the check clearing process made it more obvious to customers that a check hasn't cleared yet, possibly even by not making funds available for checks drawn on dubious banks until the check has fully cleared.

Here's a rule of thumb on scams: know what the risk-free rate is (in the American case, the benchmark would be 10-year U.S. Treasury note rates), and know deep in your heart that any[0] return above that bears risk.

The 10-year note currently yields a fraction above 4%, as of the last auction[1]. That means that anything that has the potential to return above that also has the potential to lose money; and generally, the more potential for higher returns, the more risk. Anybody claiming to give you a "quick, safe return" on your money is lying about at least one of the quick, safe, or return; i.e., a scam.

[0]: Very rarely, there are true arbitrage opportunities or some other situation where someone's cleverness leads to outsized risk-adjusted returns. "You" are probably not that someone.

[1]: https://treasurydirect.gov/instit/annceresult/press/preanre/...

You can currently get a 5%-interest savings account with some quite reputable firms (Morgan Stanley, Robinhood, Wealthfront). Those are effectively risk-free ways to earn more than 4%.

I think the 10-year treasury note rate underestimates things a bit. Maybe it's because there is an assumption priced in that interest rates will go down again?

But the point stands: right now, anything offering you more than 5% return must have some risk involved.

5.4% from a Goldman Sachs CD promotional rate. That is as risk free as anything else.

> Maybe it's because there is an assumption priced in that interest rates will go down again?

Yes, exactly this. The 1-year treasury pays 5%, so it's appropriate to look at that instead.

Normally the 10-year pays more than the 1-year, so it's safe to look at that; we're currently in an unusual state (an "inverted yield curve") where it doesn't, and people tell you this is a surefire sign of a coming recession.

Yeah and really for most people that risk with those FDIC insured banks is effectively zero so backstopped by the fed anyway.

Off topic, but as a finance nerd I want to point out that if you know you won't touch your money for 10 years and put it in a savings account paying 5% you are bearing "duration" risk. It's possible that interest rates will fall a lot and by failing to lock in a 4% return you end up with less money at the end of 10 years. (Just a technical note! You probably shouldn't buy 10 year treasuries!)

This but S&P 500 for me. I am at a point I won't believe any investment would get me more than a few % over S&P for significant length of time like 5-10 yrs.

I don't know, a 5% CD with FDIC insurance may actually be lower risk, as US debt credit rating has been downgraded to AA+ from AAA recently.

> Like what does "money laundering" look like on the ground, how would I know if someone around me was trying to do that?

You won't. Money laundering is giving plausible reasons for the government to think illicitly gained money is actually legitimately gained.

It usually takes the form of a business. Generally speaking the more service oriented the better (You wouldn't want to explain how a restaurant can serve 1000 people with 1 grocery store run. But a laptop repair business? Pretty easy to fake a few "I uninstalled a virus from mister smith's computer".)

> I've had some random Amazon items show up addressed to me, but I didn't order them, and I think that was part of a scam, but I never fully got my head around how it works.

That one is a fun one. You generally aren't the one being scammed, someone else is. It's (probably) triangulation fraud. [1] [2] Though it could also just be a scammer checking to see if a stolen credit card will buy things.

> I hear about various "work from home" jobs actually being scams, but what's going on there?

Generally, these are MLMs. It's usually targeted at stay at home moms. It's usually "be your own boss". And usually the business model is you try to recruit people to sell the products you are ostensibly supposed to be selling. Basically a pyramid scheme but legal because there's a product in the mix (really dumb that it's legal).

[1] https://www.npr.org/transcripts/1119606931

[2] https://chargebacks911.com/triangulation-fraud/

Restaurants work as part of a larger money-laundering operation, though. Cash washes through the till in the restaurant, and you sign the receipts for all the non-existent food your buddy's supplier sends you. There are probably some other dodges I'm not aware of.

Source: worked for a mob-adjacent restaurant in London. (Excellent food, though, and in a nice location; it had celebrity guests in on the regular.) I got curious watching the owner ringing in ticket after ticket and stuffing the register with £50 notes, then once I saw a couple of inflated invoices it all made sense. A while later the Met took down the owner's cousin, and the restaurant closed shortly thereafter. It was an awful place to work (top tip: don't work for, or with, coke fiends; functional heroin addicts are fine), but goodness was that an education. I was an illegal immigrant at the time, so I didn't have many options.

Earlier this week I was thinking similar..

How do I teach a young person about to travel the world alone as a new adult the scams like bump-and-rob.. the pick pockets in new orleans and the ones that 'tell you where your shoes are from'..

the ball and cups people in NY, the purse snatchers watching from the alleys..

There are so many scams and criminal things I've seen over the years (and I am sure many more I do not know) - how to prepare people for predators that are waiting for the noobs in the cities..

the dating app free dinner people and the dating app drug and rob common in Columbia these days..

/random quick thoughts.

We need a compendium and video to show some things they should be aware of and looking for instead of staring up at the pretty new lights or what not.

> and the ones that 'tell you where your shoes are from'.

Isn't it "where you got your shoes"/"what street your got your shoes on" ("you got 'em on your feet!"/"you got 'em on [current street name]")? Do they actually get violent or is the implication enough for people who fall for that?

The time I saw it go down I appreciated the honesty and candor at the end.. it was made clear that 'they preferred to provide value by being entertaining for a time and wanted money for doing a 'fun thing'.. yet they had many times before.. and during the current interaction, had many opportunities to take advantage of the distracting situation to take everything, and would be happy taking less if it was offered..

while nodding to others who were nearby that they could stand down since it appeared a charity/entertainment tax was going to be paid instead of needing to be taken..

That's the vibe I ran into there.. I'm sure it varies depending on who is involved..

Several lessons.. one of which is I carry a 20, a 10, and a couple of 5's in one pocket so I can hand over cash in any situation without pulling out a wallet - which is easy to snatch / grab..

Also be aware of anyone who wants to take your attention to a small place, like staring at your shoes and their hands near that spot, so you don't know what's going on around you..

So I didn't mind handing over a few bucks for the candor, but I can see how it gets worse, and likely also changes upon time of day / night.

> the dating app free dinner people

This is a lesson that people can learn for themselves relatively cheaply.

> the dating app drug and rob common in Colombia

This on the other hand sounds quite scary, glad it hasn't caught on where I live.

I learned the dating app Herbalife scam. Ended up with $20 nutritional powder can in hand.

dating app -> drugged -> robbed..

I recall at least 3 stories around Nashville with this M.O. the past couple years or so.. I remember at least 2 stories from around Miami that I've seen in the news.

I'm sure there have been many more, just seen a few actual stories when not looking for them..

I've seen an interesting revenge video made with one of the Columbia situations - and it's apparently gotten to be such a common thing that the state department has recently warned people (https://www.cnn.com/2024/01/21/world/colombia-dating-app-war... ) not to use dating apps when going there.

> new orleans ... the ones that 'tell you where your shoes are from'

I didn't realize how localized these scams are. NOLA is exactly where someone tried to pull that on me. I don't know if it was a scam really, he was in no position to collect if I didn't enjoy his joke.

I told him it wouldn't be fair of me to take the challenge, because there was no way he could possibly be correct. He kept trying with some rewordings, but I stuck to my position and he moved on.

At the time, I wondered idly where the conversation would have gone if I had been more receptive, but I have to admit I never considered the obvious elementary school-level joke!

On the ground, money laundering looks a lot like embezzlement, because it's basically the opposite: instead of trying to divert money away from a business and into somewhere it shouldn't be (their bank account), they're trying to take money from somewhere it shouldn't be (say, a shipping container full of cash) and putting it into a legitimate business.

This works best with a variably high volume, cash-based, low-variable cost business. Variably high volume, because the more legitimate cash flow you have, the harder it is to notice some level of illegitimate cash flow, and the variability makes it much harder for someone (law enforcement) to notice that you're consistently making more money than you have business for. Cash based is obvious, you have cash you need to legitimize. Low variable costs eliminate another way law enforcement could notice you, if your variable costs don't match your revenue (a restaurant that only buys a couple lbs of butter a month shouldn't be making thousands of meals).

> On the ground, money laundering looks a lot like embezzlement

Thank you, this is exactly the sort of mental rubric that made a lot of things click!

And it makes me even more suspicious of that car wash that offers a very expensive "premium" wash package whose differences from the mid-grade package are stuff like vacuuming and hand-rubbed wax that probably consume little to no additional inputs. Hmmm. Hmmmmmmm.

> I hear about various "work from home" jobs actually being scams, but what's going on there? Not just scamming the workers out of their personal money

Often the scam here is that the workers have to pay for their own training, pay the company for supplies, whatever... And then just the work never materializes.

"Once you've done the training we'll set you up with clients" and then ooops, there's just no clients available anymore sorry.

The random Amazon items are probably the "brushing" scam[0] which I guess is about using stolen payment to generate "verified purchases" for fake reviews.

[0]: https://www.uspis.gov/news/scam-article/brushing-scam

I've had some random Amazon items show up addressed to me, but I didn't order them, and I think that was part of a scam, but I never fully got my head around how it works.

These are Amazon shops in China that don't want to say they're in China so they send returns to other US customers. I got sandals this way with a print out saying "return them to this address".

I got some expensive item in the mail once, that I didn't order, and as I took it out of the mail box, a young man approached and said it was actually his and took the parcel.

The podcast Darknet Diaries in general is a little like that. It explains a lot of these, often by inviting the criminals themselves. It's fascinating.

A lot of scams work on greed (like the betting tipster scam) or desperation (like the bail scam) to get people to lower their guards. Offering somebody $100,000 most people will immediately realise it's a scam, but a $50,000 job sounds more reasonable. The job "interview" builds the relationship and trust, then the actual scam comes out.

Bail scam: https://www.countrymeadows.com/news/story-bank/frantic-call-...

Like what does "money laundering" look like on the ground, how would I know if someone around me was trying to do that?

Restaurants in high rent areas offering suspiciously cheap food with relatively few customers.

They are all over NZ. People are so naiive about what they are.

> I hear about various "work from home" jobs actually being scams, but what's going on there?

Many merchants won't ship overseas due to fraud, costs, etc. In this scam, the fraudsters purchase something with stolen payment, ship to you, and then have you re-ship to them or whoever they've resold it to. Often at your expense which they promise to reimburse.

If the merchant realizes they're fraudulent orders, they may block you as a fraudulent customer blocking your address in back office fulfillment services. Now you have trouble buying your own things.

If investigators look into it, they come to you. Since shipments are going over state lines, it could turn into Federal trouble.

And you never get reimbursed for shipping.

TBH Many legit services funded from taxes, contributions, and insurances feel like scam. Many jobs fell like scam. Scammers focused on profit extraction exploit the decreased level of alertness. Unfortunately, random "friendly stranger" is almost always scammer especially if pulling out anyone's wallet is involved.

Yeah. A friend of mine just shared this:

https://i.imgur.com/KDUOq2j.png

Great. They will look indistinguishable from scammers, and I have low hopes that anyone will actually check ID now that this notice has told them they're legit. Some scammers are gonna have a field day impersonating them.

While I don't support abuse of 911 for things like this, they really need something like it, a known-trusted authority that people can verify with.

Otherwise, you're using information in the notice to verify the notice! That's pointless!

Hell, Troy Hunt just wrote about this: https://www.troyhunt.com/thanks-fedex-this-is-why-we-keep-ge...

Reply on news.ycombinator.com