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Protect Yourself Against Scammers: Prevent Fraud

Protect Yourself Against Scammers: Prevent Fraud

March 26, 2024

     As a sad sign of our times, the Federal Trade Commission (FTC) announced last month that we Americans had passed an inauspicious milestone. We have lost a collective $10 billion dollars to financial fraud. In a March 6 post to social media, Fairfax County Police warned about crypto-related scams and provided tips to avoid falling victim. Sadly, among the list of incidents reported in this post was one involving a client of EBW. Thankfully, the quick thinking of one of our associates and her knowledge of our client prevented the situation from being much worse.

     Our client was contacted by a woman claiming to be with Amazon’s fraud department. The woman asked if the client had made a $1500 purchase and asked if she had opened new accounts at three local banks. The client confirmed that she had not done this to which the woman on the line said she was the victim of identity theft and transferred her to someone supposedly in her bank’s fraud department. After speaking with this person, the fraudsters had our client hold while they connected her with Alvaro Bedoya, a Commissioner with the Federal Trade Commission. Mr. Bedoya is an actual FTC Commissioner but was unwittingly used as a prop in this elaborate fraud. The fake Mr. Bedoya enlisted our client to assist him in catching this notorious crime ring. To do so, our client would have to close out her bank accounts and open new ones. This tactic was likely to break any relationship our client had with an institution that was familiar with her habits. Over the course of three weeks, our client carefully followed the instructions provided, including withdrawing small amounts of cash, to avoid any bank reporting requirements. The money was taken to a Bitcoin ATM and deposited into the scammer’s account. Altogether, our client converted $19,000 into Bitcoin which is unfortunately untraceable.

    As the scam continued, the fake Mr. Bedoya claimed they were close but needed more money to catch these scoundrels. All the money would be returned, he assured her once the sting operation had concluded, and the bad guys were in jail. On a Monday in February, the client called our office asking for a withdrawal of $119,000. When Becky Krashin, one of our Associate Planners asked questions about the plans for this money, because a withdrawal of this nature was out of the ordinary for this client, she was provided with vague and elusory responses. Fortunately, Becky sensed something was not right and contacted our client’s advisor Howard Pressman. Howard reached out to the client, who fortunately trusted Howard enough to divulge the details of what the fraudsters had manipulated her into believing was a highly secretive, undercover sting operation. After multiple phone conversations, Howard was able to convince the client of the scam. Becky, waiting to hear back from Howard, didn’t process the withdrawal and our client’s money was safe and secure in her account.

    Sadly, our client lost $19,000 to these cheats, who specifically target elderly people, and will need to undergo a lengthy process of changing her personal identifiable information and freezing her credit. On the bright side, our team was able to prevent the situation from becoming much worse.

    Lest you think this could never happen to you, in a now viral story written in February by Charlotte Cowles a NY Times business journalist and personal finance writer, she recounts every painful detail of how she was manipulated and lost $50,000 to this same scam. Her essay is well worth the read.

Steps to Prevent Financial Exploitation

Financial exploitation is on the rise and the criminals are getting much more sophisticated, but following these steps can help protect you from becoming a victim:

  1. Never provide personal information to anyone in response to an unsolicited request.
  2. Never reply to unsolicited emails or text messages from unknown senders or open their attachments.
  3. Never click on a link in an email or text message from an unknown sender.
  4. Deny then verify: If you are contacted by a bank, company you do business with or the government regarding potential fraud, tell the person you will call them back and hang up. Do not trust the caller ID on your phones. Phone numbers can be spoofed. Find a number for the company yourself, using the internet and call to verify.
  5. No one from the government or police will ever ask you to send money over the phone, via text or email.
  6. Talk with a friend, relative or us before providing any information or money to someone you do not know.
  7. If you think you may have been a victim of fraud, please do not feel ashamed or embarrassed. These people are very good at what they do and have conned many smart people. Reach out to us as soon as possible so we can help you to minimize the damage and get you on the road to securing your finances.

As always, please reach out to your advisor with any comments, questions or concerns and be sure to check out our website for more financial wellness tips. We will be sharing details on financial scams in our newsletters, so be sure to look each month and share with your friends and relatives. Together, we can raise awareness.