Watch out for Facebook Game Scams

Facebook games — Mafia Wars, FarmVille, Restaurant City — have become surprisingly effective at diverting time wasters among the social-networking crowd. More than 63 million people alone play FarmVille. But now accusations have surfaced that the games can lead some more gullible players, including children, into Internet scams, especially if they have a cell phone.




Here's how it works. You join FarmVille, a game on Facebook in which you can create a virtual farm by growing crops and livestock and tilling the earth. Through your toil, you earn virtual money, but to farm more efficiently or quickly, you can also invest real cash (through PayPal or a credit card) to buy virtual goods, such as seed or a tractor. Should you not have any real cash to spare on things that after all do not actually exist, you can instead accept an offer from one of the advertisers on the game site and get virtual cash in return.

These offers, generally known in the business as lead-gen (lead generators), will give you some seed/tractor money in return for signing up for, say, a subscription to Netflix or a credit card. But less scrupulous advertisers lure players in with an offer to take a bogus survey or IQ test. Once it's completed they require a cell-phone number to send you the results. When you enter your cell number and create a password, you have unwittingly subscribed to a service you never wanted but will be billed for. If you're a kid, the mysterious charge then appears on the phone bill of the parents, who often find that phone companies will not cancel services from a third-party provider — even if the parent cannot find out who that provider is.

Will O'Brien, general manager of social and casual games at TrialPay, a company that matches advertisers with potential online clients, told the San Francisco Chronicle that offers to swap personal information for virtual cash are designed to reach the young because they're less likely to have a credit card. But they often have cell phones, usually on their parents' plans. Indeed, while Facebook rules state that users must be at least 13, FarmVille seems to be aimed at a youthful crowd, at least by its marketing pitch: "Howdy Ya'll! Come on down to the Farm today and play with your friends ..."

The issue came to a head on Nov. 1 when the blogger Michael Arrington of Tech Crunch confronted some of the advertising providers at a virtual goods summit with accusations of scammy behavior. He blogged about it and also managed to find a former social-networking ad executive who admitted that the industry knew that not all the ads were on the up-and-up.

Mark Pincus of Zynga, the largest and most profitable of the social-networking game companies, (it created FarmVille, Mafia Wars and Cafe World) was quick to respond. "I agree with [Arrington] and others that some of these offers misrepresent and hurt our industry," he wrote on his blog. "We have worked hard to remove bad offers ... Nevertheless we need to be more aggressive and have revised our service-level agreements." He also took down all offers that involve sending a mobile-phone number. Offerpal, the biggest provider of offer advertising, also apparently responded quickly, replacing CEO Anu Shukla, shortly after a video of her confrontation with Arrington surfaced. Other game developers said the accusations amount to nothing more than the rants of an attention-hungry blogger.

According to the Better Business Bureau of Greater San Francisco, 222 complaints have been lodged against Zynga in the last 12 months. But most of these have not been about advertising scams, and Zynga has raised its BBB rating to a B+ from an F. Offerpal has a B rating. Industry figures suggest that roughly 90% of social-networking game players neither spend any real money nor click on any ads. And Facebook and MySpace say they monitor all applications closely and have suspended companies that violate its advertising protocols. In the last several days, both companies have revised their guidelines to be more stringent.

But clearly there's reason for caution. Other Internet entrepreneurs have piped up about the issue. James Hong, who co-founded Hotornot.com, said that even back in 2005 he'd stopped taking the kind of offers that ask for cell-phone numbers or a subscription. "The offers that monetize the best are the ones that scam/trick users," he wrote on his blog. "Sure we had [legitimate] Netflix ads show up ... but I'm pretty sure most of the money ended up getting our users hooked into auto-recurring SMS subscriptions for horoscopes and stuff."

All in all, might be just as well to earn virtual cash the old-fashioned way: by playing for it.

Malaysian banks on alert for credit-card fraud

In the wake of reports on card merchants who double up as Ah Longs, banks are on the alert for any signs of credit-card fraud and misuse.




“It is compulsory for all merchant acquirers to update the merchant watchlist database on any negative or adverse information of their respective merchants that have been terminated due to any illegal and fraudulent activities,’’ said Lim Hong Tat, senior executive vice-president and head of consumer banking at Malayan Banking Bhd (Maybank).

“This information is available to all acquirers and can be used as a reference prior to recruiting merchants. Proper due diligence is also conducted,’’ Lim said.

In fact, there have been discussions on how to blacklist certain card merchants but problems arise when they switch banks and get signed up again.

“Rules governing the relationship between the merchants and acquiring banks can be found in the card associations’ operating regulations,’’ said Association of Banks in Malaysia executive director Chuah Mei Lin.

“Any breach of the terms and conditions by a merchant may result in the termination of services offered by the merchant’s bank, which is the bank that accepts payments for the products or services on behalf of a merchant,’’ she said.

However, Chuah said “the termination of services by a particular bank would still enable the merchant to apply to another bank for facilities.’’

“The only option in such instances would be for the complainant to lodge a complaint directly with Visa or MasterCard. and in the event of a serious breach, Visa or MasterCard may inform all banks of the breach and the merchant will be unable to establish new facilities with any other banks,’’ Chuah told StarBiz.

According to Renzo Viegas, head of retail banking at RHB Bank, new merchants are appraised with the same level of diligence used on prospective borrowers.

“Risks reviewed by banks include high chargebacks (relating to the rate and amount of disputed transactions ocurring at a merchant) on any prior records or existing relationships with banks, business failure or potential fraud,’’ Viegas said.

This appraisal involves a combination of any of the following: documentation on business registration, corporate resolution and other key business documents, assessment of any existing business relationship with the bank, review of the line of business and products offered by the merchant, analysis of projected sales volume, checking against risk databases of brands/card companies, and on-site inspection.

Merchant activities are regularly reviewed and those on possible high risk activities include analysis of chargeback trends, sales volume, ticket size relating to transaction amounts submitted by merchants for settlement, frequency and merchant settlements.

Rules laid down by brands and card companies such as Visa and MasterCard on data security standards, which provide a framework for safeguarding of credit-card data by merchants, must be adhered to.

“There are processes in place which audit the compliance of these standards by the affected merchants,’’ Viegas said.

EON Bank aimed to work with industry colleagues, Bank Negara, card associations and customers to stay ahead with the latest developments in the credit-card sector and strengthen measures to combat all such fraudulent activities, said Aaron Tan, head of cards and unsecured lending.

Besides monitoring all daily card transactions, from card acceptance to payments for both cardholders and merchants, EON Bank conducts rigorous screening of prospective merchants by scrutinising their background and track record as well as employing extensive risk scoring tools.

“EON Bank group also continuously fortifies its detection system, risk management and data security with the latest technology and best practices to safeguard the customers, merchants and the industry,’’ Tan said.

Poor Palestinians Victim of Tunnel Scam

Smuggling tunnels provide economic lifeline along the Palestine/Israel borders because of Israeli border blockade. And to some scammer, it is an opportunity for them to scam the poor Palestinians. Some Palestinians funded tunnels only to see their money disappear. Read the story below.




Poverty-stricken Gaza where even the most basic goods are in short supply has spawned its very own financial scandal --- centered around the tunnels that run under the border with Egypt to circumvent the Israeli blockade.

There is big money to be made from operating a tunnel -- they are the main economic lifeline for Gaza -- but some of those who collected money for construction disappeared without building any tunnels. Estimates of how much was lost vary widely from $100 to $500 million.

It's not just investors who are losing out on the tunnels. One worker, who declined to give his name, said: "I did not get paid -- almost $1,000 for three months' work. Where am I supposed to get compensation from?"

Hundreds of tunnels snake under the Gaza-Egypt border and thousands of Palestinians find work smuggling in motorcycles, fridges, food, cigarettes, livestock -- whatever Gazans want and can't get because of the blockade. Israel says some of these tunnels are used to smuggle in weapons.

In Rafah market, there's a plethora of electrical goods smuggled through an underground world where the work is dirty, back-breaking, and fraught with danger.

The landscape near the Egyptian border changes on an almost daily basis. As soon as Israel bombs a tunnel, or a tunnel collapses -- often burying workers alive -- work on another tunnel begins.

With Gaza's unemployment estimated at up to 80 percent the financial lure of the tunnels is hard to resist. Children run away from home to work there, and there is big money to be made for tunnel operators.

The initial cost of up to $100,000 to build the tunnel is soon recouped as operators charge merchants an average of $5,000 a tonne for the goods they smuggle.

French court convicts Church of Scientology of fraud

A French court on Tuesday convicted the Church of Scientology and six of its members of organized fraud, but stopped short of banning the church. The court also fined the members as much as 400,000 euros ($595,000) each.




The decision follows a three-week trial in May and June, during which two plaintiffs said they were defrauded by the organization, which is classified as a sect in France.

The Church of Scientology has about 45,000 followers in France, and some of them were in court Tuesday.

The church had said before the verdict that it would appeal any judgment against it.

The judge at the Correctional Court in Paris said the church may continue its activities in France, but he said those activities must remain "on the correct side of the law."

As part of the penalties, the church was ordered to publish the results of the verdict in several national and international magazines to warn people, the judge said, about what Scientology offers and what was discovered at trial.

The plaintiffs focused their complaints on the use of a device that Scientologists say measures spiritual well-being. Members used the electropsychometer, or E-Meter, to "locate areas of spiritual duress or travail so they can be addressed and handled," according to Scientology's Web site.

The plaintiffs said that, after using the device, they were encouraged to pay for vitamins and books. They said that amounted to fraud.

Prosecutors had asked for the dissolution of the church and its Paris bookstore.

Fraudulent 2010 World Cup Tickets

FIFA is warning soccer fans to beware of fraudulent online ticket sales for the 2010 World Cup as it works with international agencies to address the problem.




"Many unauthorized operators are exploiting ... unsuspecting fans across the world into purchasing illegitimate or unauthorized tickets and/or ticket-inclusive travel packages," soccer's global governing agency said in a statement.

Official tickets will be printed only a few weeks before the tournament kicks off, the statement said.

The agency applauded efforts by British authorities to shut down Web sites selling fraudulent tickets. Efforts are under way to implement more crackdowns worldwide.

"We simply cannot accept that true fans are being cheated in this way," said Jerome Valcke, FIFA secretary general.

One way of ensuring legitimate sales is buying tickets from FIFA's Web site or through its partner, MATCH, the agency said.

The World Cup will be held next summer in South Africa.

Related links
* Fans warned of fake World Cup tickets

Woman falls for Facebook scam

A Missouri woman was tricked into wiring about US$4,000 (RM14,400) to someone in England after receiving faked messages from a friend on Facebook asking for help, police said.




Jayne Scherrman of Cape Girardeau wired the money through Western Union after receiving what she believed were several requests for help from her friend.

Police were notified about the scam on Aug 26. They believe someone took over the Facebook account of a Cape Girardeau County resident, Grace Parry, changed the password so she couldn’t access it and sent out messages saying she and her husband had been detained in London and needed money.

Scherrman said she received a message last Tuesday from Parry saying she needed help. Scherrman, a pediatric dentist, said Parry and her minister husband go on mission trips, so she didn’t think it unusual that they might be in England.

She figured they really needed assistance if they could only reach her electronically, and expected they’d pay her back quickly. She originally was told electronically they needed US$600 (RM2,160) for a hotel and taxis. Then she was told it wasn’t enough with the exchange rate.

Finally, she was told by a caller that the couple had been detained and more money was needed to help them fly home.

Scherrman asked to speak with her friend but was told she wasn’t available. She also got a name from the caller and tried to get an address when she realised she might have been scammed. By then, she had wired nearly US$4,000 through three Western Union transfers, she said.

Parry said another friend from Mississippi also sent US$600.

Shameful act

Parry, who hadn’t travelled to England in years, tried to access her account to warn other friends but couldn’t. She asked Facebook to suspend her account and her husband posted warnings about the scam, including one Scherrman received after she’d sent the money.

She said she feels violated by what happened. “It’s just sad because they work on people’s compassion and Jayne’s a very compassionate person,” she said. She said she had never posted a lot of information about herself online.

Selzer said people should remember to change their passwords often and to be careful about posting personal information.

Palo Alto, California-based Facebook said Internet schemes like this one aren’t uncommon. Facebook has systems to detect suspicious behaviour tied to compromised accounts and blocks it when it possible, company spokesman Simon Axten wrote in an e-mail.

“We’re also working with law enforcement and with Western Union (a wire transfer company commonly used by the scammers) to investigate specific cases and improve education,” he wrote

Hazem al-Braikan Charged With Fraud Kills Himself

A Kuwaiti businessman linked to Citigroup and charged in the United States with fraud committed suicide Sunday, a security official said.

Hazem al-Braikan was found dead in his bed with a gunshot wound to the head and a handgun at his side, said the official, speaking on condition of anonymity because he did not have the full details.




The U.S. Securities and Exchange Commission charged al-Braikan last week with scheming to make millions by manipulating the stock of certain U.S. companies. The SEC said it was freezing more than $5 million in profits believed to have been made off the questionable deals by al-Braikan and three companies with whom he is associated.

Al-Braikan was CEO of Al-Raya Investment Co. which is 10-percent owned by the New York-based Citigroup Inc.

The SEC says al-Braikan's company as well as two other companies – the United Gulf Bank and KIPCO Asset Management Co. – traded shares based on two phony announcements. One announcement faxed to media outlets July 19 and subsequently reported on the Internet the following day stated that a Middle Eastern investment group made an offer to acquire Stamford, Connecticut-based electronic systems maker Harman International Industries Inc.

Harman was forced to issue a statement last Monday denying it had been approached by a mysterious Gulf investor known as the Arabian Peninsula Group following a number of media reports. The company's shares tumbled sharply once the hoax was revealed.

In April, rumors and a report in a Kuwaiti newspaper that a consortium of Middle East companies was offering to buy Textron Inc. sent shares of the Providence, Rhode Island company soaring more than 50 percent in a single day. No deal for the manufacturer of Bell helicopters, Cessna jets and turf-maintenance equipment emerged, and shares plunged a few days later.

The SEC said al-Braikan and the others "amassed positions in the one or both of the securities of the companies shortly before the bogus offers were publicized." They then sold their securities at "prices inflated by the false information to reap their illicit profits."

In an statement published in Kuwait's Alrai daily Sunday, Al-Raya Investment Co. denied the fraud allegations and said it had full confidence in al-Braikan.

KIPCO Asset Management attempted to distance itself from the SEC probe over the weekend, saying in a statement that the deals under investigation were carried out on behalf of a client in the "normal course of business."

The Kuwait-based company said it "had or has no proprietary investment or any interest in the related shares and thus has not benefited and has not gained from the reported trades."

United Gulf Bank, a Bahrain-based investment bank also named in the complaint, issued a similar statement linking the transactions to "specific instructions of their client." Like KIPCO Asset Management, in which it holds a controlling stake, the company said it did not benefit from the trades.

"Everybody is shocked," said Shiny Rajan, a secretary at Al-Raya who worked closely with al-Braikan. Speaking of his suicide, she told The Associated Press: "We can't accept it. We celebrated his 36th birthday last week."