Fraud in the News

Facebook's news feed change could backfire

According to a Jan. 17 Digiday article, How Facebook’s feed purge could expose publishers to fraud, by Ross Benes, a new configuration to Facebook’s news feed could breed more fraud than prevent it.

Facebook recently announced a new algorithm in its news feed that will favor user content over publisher content. The purpose is to promote more organic posts that are read and actively shared by users. According to the article, publishers might turn to traffic resellers to make up for lost exposure.

Some publishers pay for each click of their Facebook advertising content. But with fewer publisher ads, the price per click might increase. The article asserts this increase will cause publishers to look at fraudulent ways to post material, causing a backlash in Facebook’s attempt to reduce fake news posts.

According to the article, obtaining accurate data from Facebook’s new rule will be difficult because publishers don’t typically release traffic purchasing practices.

Tax season means fraud season

If you process your company’s payroll, beware. According to a Jan. 17 IRS news release, IRS, States and Tax Industry Warn Employers to Beware of Form W-2 Scam; Tax Season Could Bring New Surge in Phishing Scheme, the 2018 tax season might be the most daunting in fighting fraud.

According to the release, the IRS anticipates a surge in W-2 phishing schemes. Cybercriminals pose as company executives and send emails to employees asking for personally identifiable information that would appear on a Form W-2. This technique is known as business email compromise, or business email spoofing, and employees willingly provide their information to the senders. Scammers sell this information on the dark web or use it to file fraudulent returns.

The IRS urges employers to educate their human resources departments of the phishing scheme and establish internal policies on handling W-2 requests.

Musician fools potential home buyers

Former bassist Michael Davenport, 49, of the punk band The Ataris is accused of participating in an online real estate scam, according to the Jan. 17 NPR article, Pop-punk bassist accused of $27 million fraud scheme, by Andrew Flanagan.

The indictment alleges the musician defrauded nearly 100,000 people by posting false Craigslist home ads. According to the article, Davenport’s company, American Standard, would advertise housing for sale online at far below market value. American Standard would then sell a listing of houses for $199 to those interested in purchasing a property. However, many of the homes on the list were never for sale, nor did the homeowners give permission to list the ads.

According to the article, Davenport defrauded people out of $27 million in seven years. Davenport and his co-worker were indicted on federal charges and face up to 30 years in prison.