Scams and Frauds Are on the Rise

Two years ago, the Council on Successful Aging offered a forum on how to avoid being taken in by scams and frauds. Pine Knoll Shores Police Chief Ryan Thompson and Financial Advisor Cheryl Mansfield from Edward Jones shared examples of scams and offered tips on how to avoid becoming a victim. Unfortunately, even in this short time span, the array and sophistication of these activities has increased.

Very often intended victims are older people who may be more trusting or less familiar with technology. Scammers may contact you via email, text, phone (landlines and cell phones), U.S. mail and can even show up at your door. Scammers not only credibly misrepresent themselves and their business, they may also add the threat of loss or use fear tactics to induce compliance.

Types of Scams

Scams and frauds take a variety of forms (e.g., investment and imposter scams, online shopping issues) facilitated by digital tools that make it easier than ever to target victims. Recently released Federal Trade Commission (FTC) data show that consumers reported losing more than $10 billion to fraud in 2023.

These numbers suggest that a lot of the fraud prevention advice being publicized may not be working. Michelle Singletary, an award-winning, long-time Washington Post personal finance columnist and author, has interviewed scores of victims and Doug Shadel, a fraud prevention expert who has spent much of his career studying scammers, summarized their insights and concluded that the current advice may be outdated. They shared their thinking in a December 2024 article appearing in the Carteret News Times newspaper.

Scammers Are Credible Actors

We easily believe in them; they can make the implausible seem plausible. They appear transparent, polite, respectful and have a lot of charisma. They may pretend to work for a respected agency—e.g., the IRS or Social Security. They may present themselves as authority figures—e.g., a sheriff or a known company executive. Their promises of strong financial benefits are difficult to dismiss.

Alternatively, when threats of arrest or demands of payment in cash, gift cards, wire transfer or cryptocurrency raise anxieties or fears, we often quickly comply. Scammers who require you to transfer funds out of your bank/accounts “for your protection” can be alarming. If you find yourself in such a situation, it can be very difficult to think clearly and respond objectively.

Most often we are told to resist the promises made by scammers by remembering: If it’s too good to be true, it probably is. While this is still a true statement, it’s effective only if one remembers it when they are approached. Build your resistance by considering the ideas listed below and adding them to your response set.

What Can You Do?

Stay alert…and be suspicious.

• Scammers may try to rush you into a situation. Hang up.
• Focus on an action that can be taken rather than try to remember a statement, e.g., ask for a return phone number of the company/person being represented. Reduce anxieties by reminding yourself to breathe.
• Don’t believe anyone who urges you to move your money to “protect it.” Apply the same advice if someone tells you to buy gold, gift cards or cryptocurrency to protect your assets. Again, hang up or focus on an action.
• Be aware that some scammers take time to build a relationship over several low-key, non-confrontational conversations to gain your trust. No matter how honorable someone may sound, resist sharing any personal financial information.
• Educate yourself. Becoming familiar with different, often-used approaches by scammers and fraudsters will help reduce your anxieties should you actually be contacted. Rather than try to remember that you shouldn’t believe promises of extraordinary returns, build a base of understanding of how legitimate financial advisors operate. Review news stories, videos, and scam buster on YouTube to help build a knowledge base.
• Receive consumer alerts about scams from the Federal Trade Commission and AARP Watchdog Alerts. Talk about these issues with friends and family. Help them be prepared. The FTC will send you alerts and updates to start these conversations in your preferred language and without charge.
• The FTC wants to hear about scams in any language, even if you didn’t lose money: ReportFraud.ftc.gov (English speakers); ReporteFraude.ftc.gov (Spanish speakers); all other languages call 877-382-4357, press 3 and ask for an interpreter in your preferred language.

The best protection against being scammed is to be prepared.

Further Reading

As Nationwide Fraud Losses Top $10 Billion in 2023, FTC Steps Up Efforts to Protect the Public | Federal Trade Commission, February 9, 2024.