Posts Tagged "scam"

People Can Spot a Scam After Seeing Fakes

The old and the young are most susceptible to scammers using fake identities to extract money from their victims. People in their 50s who went to college are in the sweet spot and are much better at resisting them.

The question is how to prevent the vulnerable from falling prey to imposter scams, which account for a third of the dollars Americans report to the FTC they’ve lost in frauds every year. A new study finds that exposing people to a watered-down version of a scam they might see in the real world teaches them to recognize an actual scam that comes across the transom.

In the imposter scams that are the focus of this study, someone pretends to represent a trusted organization like the Social Security Administration, the Red Cross, or online retailer Amazon. The goal is to coax either money out of the victim or personal information that can be used to make money. Imposters arrive in many forms – phone calls, emails, or texts.

To educate the 1,000-plus people recruited to this study, the researchers assigned them to one of four different online training programs. The only training that worked was designed to effectively inoculate the participants against fraud by exposing them to simulated scams on an email platform.

After reading each email, they were asked to decide whether it was a fraudulent appeal under the guise of a trusted organization or a copy of a legitimate communication from the organization. To figure this out, they could inspect the source of the email or click on links.

One example of a legitimate Social Security email was “Need a replacement card?” One of the frauds that came from socialsecurity.org – the agency’s actual website is ssa.gov – asked the email’s recipient to “review your Social Security statement.” …Learn More

Lonely Seniors are More Vulnerable to Fraud

COVID has created perils that go beyond just the threats to our health. Reports to the FTC of financial fraud and identity theft shot up 68 percent in the first two years of the pandemic – double the pace during the previous five years combined.

Older adults with fading memories and declining cognition have always been especially susceptible to fraud. But the pandemic, by forcing them into isolation, may have worsened their vulnerabilities.

That’s one takeaway from a new study showing that older Americans who report feeling lonely or suffering a loss of well-being are more susceptible to fraud. The study, based on pre-pandemic surveys of people over 65, is also highly relevant post-pandemic and indicates that interventions to reduce social isolation might be effective in blunting their vulnerability.

For retirees with “high life satisfaction and fulfilled social needs,” the researchers said, “fraudulent opportunities promising wealth, status or social connection may be less appealing.”

The analysis relied on the Rush Memory and Aging Project, which monitors retired Chicago-area residents for signs of cognitive decline and its aftereffects. The periodic surveys include questions such as “If a telemarketer calls me, I usually listen to what they have to say” and “If something sounds too good to be true, it usually is.”

The surveys also measure loneliness, asking participants to agree or disagree with statements like “I miss having a really close friend” or “I often feel abandoned.” Well-being was determined by whether the individuals had a sense of self-acceptance and purpose, autonomy, mastery of their surroundings, and personal growth. …Learn More

Romance Frauds are Hiding in Plain Sight

Romance scammers follow a predictable script.

Find a willing person on social media or a dating website. Use the information she’s posted online to befriend her and then win her affection. Ask her for a loan for an urgent matter and promise to pay it back. After the money is wired, ply the victim for more money while promising to meet in person – a plan that never seems to pan out.

Despite the flashing red lights that say “fraud,” romance scams are becoming increasingly profitable. Last year, its victims were cheated out of more than $200 million. This is a 40 percent increase over 2018 and exceeds the losses for any other type of scam, according to the Federal Trade Commission. Middle-aged Americans, who are very active online, are the most common victims – and they’re often women. But the typical loss for someone over 70 is $10,000 – the most for any age group. Some people lose much more.

The number of romance lossesOne victim, a 76-year-old widow from Rhode Island, met her alleged perpetrator while playing Words with Friends, an online word puzzle. Over a two-year period, she gave him $660,000, which required her to refinance her home, sell property in Massachusetts, and withdraw money from her bank account.

A Texan in her 50s met a man on Facebook who claimed to be a friend of a friend. He persuaded her to turn over $2 million, which she doled out slowly over time as he promised to pay her back, told her he loved her, and arranged for them to meet. They never did.

“He was saying all the right things,” she told the FBI. “I felt there was a real connection there.” …Learn More

Avoid scams

Scam Alert: Student Debt ‘Relief’

Despite numerous state efforts to crack down on fly-by-night firms falsely claiming to reduce or eliminate young adults’ student loans, new firms keep popping up.

Their social media pitches and websites promise borrowers things the companies can’t possibly deliver on. They appeal to potential customers struggling to pay student loans with slogans like “Get Rid of Your Student Loans Today!” or “$17,500 in Up Front Forgiveness” – “100 percent guaranteed!”

In a high-stakes game of Whac-a-Mole, attorneys general in numerous states have repeatedly brought legal actions against these so-called “debt relief” companies in cases going back at least four years. Massachusetts resolved one case this past summer, and Pennsylvania filed a lawsuit last fall.  Florida has aggressively pursued several debt relief companies recently. The Federal Trade Commission and the Consumer Financial Protection Bureau have also gotten involved.

Student loan borrowers “are desperate for help, which is how these companies are able to grab them,” said Betsy Mayotte, founder of the Institute of Student Loan Advisors, a Boston-area non-profit she founded to provide free help to people wrestling with college loan payments.

Mayotte described egregious fraud against a client who came to her organization and had been paying her student loans for years, whittling down the amount she owed to $5,000 – but it ballooned to $12,000 after she got involved with a debt-relief firm that took over her loan payments. The company put the loan into the federal government’s forbearance program, where it went unpaid while accruing interest for two years. After the forbearance period expired, the debt relief company neglected to resume the loan payments, despite continuing to collect its monthly fee. The customer defaulted on her debt unwittingly – but never got a notice because her contact information on the loans had been changed. … Learn More