Don't be fooled by security scams
Now if you get a call from a bloke saying that he's Bill Gates, you might reasonably suspect that the man on the phone has never been to Seattle and may not be the billionaire he says he is.
But when a man cold-calls consumers and says he's from Microsoft and they have a problem with their home computer, people's natural defences drop and all disbelief disappears.
There's something about technical geeks that leaves those of us without much computer know-how feeling vulnerable and needy when it comes to technical support - even when we haven't sought it out.
How the scam works
Longtime Moneywise reader Traudl Winkler contacted me with a warning about a recent scam that was tried on her. She received a call at the beginning of August from someone claiming to be from Microsoft, saying they were aware of problems on her computer that their technicians could fix.
As she was having problems with the computer (who doesn't?), she listened to his instructions. Lo and behold, an error and default message appeared on her computer and soon she was sucked into a 'maintenance contract' that she didn't need.
It was only after the payment had gone through that she realised the company had nothing to do with Microsoft. She tried to contact the firm but couldn't get hold of it, and was forced to cancel her credit card to stop the payment from going through.
"I was worried that I had been inadvertently persuaded into a contract I had not requested or wanted," she says.
Get Safe OnLine, an organisation dedicated to protecting internet commerce and supported by government, the police and many businesses, has issued an urgent warning against this so-called 'Microsoft' scam.
While the cold-callers phone you under the pretence of being from IT support, with the aim of helping you improve your computer security, their real aim, in fact, is to get financial information for identity fraud and to gain access to your computer to launch phishing attacks.
It's a familiar story, according to Frank Shepherd, spokesperson for the government's consumer watchdog, Consumer Direct (consumerdirect.gov.uk). "We've had similar reports, with variations. It's something we are definitely keeping an eye on," he says.
The Serious Fraud Office says the scam resembles the old-style boiler room fraud, when literally thousands of people were contacted under false pretences to either extract financial information or try and get unsuspecting victims to sign up to punitive, useless and unwanted support contracts.
"This area of law is complex but we have become more skilful at dealing with these issues. We would advise great caution when entering into a financial relationship or sharing any sensitive information after a cold call," says a spokesperson for the Serious Fraud Office.
I tried to contact the company that had approached Traudl, but the Indian mobile phone number supplied was no longer available. Needless to say, Microsoft told me directly that it never cold-called.
One thing worth bearing in mind is that as soon as one scam is created it mutates, Darwinian-style, into multiple variants - and the Microsoft scam is no exception. Take Helen Taylor, another Moneywise reader. She contacted me to say that her 71-year-old mother had received a phone call from a man with a foreign accent saying he was from Windows. Yeah, right.
Helen says: "The man phoned several times despite my mother telling him she thought he was trying to scam her."
It's a remarkable turnabout that criminals are using our growing awareness of the need for internet security to sell and install bogus software that is, in fact, dedicated to stealing from us. But this is the enemy we now face. Darwin never said it, but Randy Newman sang it: "It's a jungle out there."
Phishing scams are typically fraudulent email messages from seemingly legitimate sources (your internet service provider, mobile phone provider, bank etc). These messages usually direct you to a counterfeit website or ask you to divulge private information (password, PIN, credit card numbers, or other account updates), which is then used to commit identity theft.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.
This is an umbrella term for an organisation, usually unlicensed by the financial authorities, which uses forceful, persistent and highly aggressive telephone sales techniques to sell unlisted or non-existent securities to private investors. In the majority of cases, the shares being sold are worthless and the boiler room vanishes, leaving the investor out of pocket. Although they boast impressive UK addresses, the firms operate from boiler room “hotspots”, such as Spain, Switzerland, Dubai, Japan, Bermuda or the US, so they are outside the remit of the Financial Services Authority.