Smart Money Podcast – Understand and Avoid Financial Scams: Phishing, Vishing, Smishing and More
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Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions. In this episode:
Learn how to spot and avoid online scams, including imposter scams, investment scams, phishing, vishing and smishing.
How can you protect yourself from financial scams?
What steps should you take if you fall victim to one of these schemes?
Hosts Sean Pyles and Sara Rathner discuss the pressing issue of online frauds and strategies for safeguarding personal finances to help you avoid falling prey to digital tricksters. They begin with a discussion of recognizing and avoiding various scams, with tips and tricks on spotting urgent money demands, identifying false emergencies and being wary of too-good-to-be-true investment opportunities.
Then, Lisa Schifferle from the Consumer Financial Protection Bureau joins Sean to discuss the alarming scale of scamming in America. They discuss the importance of sharing scam experiences, recognizing payment method red flags and the necessity of being vigilant with personal information. They offer insights into the dangers of unsolicited communications, sophisticated scamming operations, and essential steps for recourse if you've been scammed.
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Have a money question? Text or call us at 901-730-6373. Or you can email us at [email protected]. To hear previous episodes, go to the podcast homepage.
Episode transcript
This transcript was generated from podcast audio by an AI tool.
Sean Pyles:
Crypto scams, romance scams, tax scams, phishing, vishing, smishing. Welcome to the word salad of the scam world. If there's money to be made, there's a scam to be played. So today we're going to help you learn to spot the scam. And rule one is if there's a fast deadline on a demand for money, it's time for some serious skepticism.
Lisa Schifferle:
That's what these scammers try to do. They try to rush you into making a decision by telling you something's urgent or an emergency like the family emergency scam, where they'll say, oh, this is your grandchild and I'm overseas and I need you to wire money fast because I'm in jail or in the hospital.
Sean Pyles:
Welcome to NerdWallet's Smart Money Podcasts. I'm Sean Pyles.
Sara Rathner:
And I'm Sara Rathner.
Sean Pyles:
And today we continue our Nerdy deep dive into scams and identity theft and all the different ways that bad actors try to part you from your money.
Sara Rathner:
In previous episodes, we've gone over the dangers and warning signs of ID theft and ID fraud, and both of those involve people pretending to be you. They open credit cards in your name, bank accounts in your name, health insurance coverage in your name, tax refunds in your name. Are you sensing a trend? Today though, we're going to hear about the world of scams and this is a little bit different.
Sean Pyles:
Yeah, scammers try to convince you that they are someone trustworthy. They pretend to be the bank, the credit card company, the insurance company, the IRS, and on and on. And they're usually attempting to get you to click on a link to an account or to give them a password. Sometimes they're even pretending to be a family member and use technologies like voice replication to get you to pay, say, a ransom demand for someone who isn't really missing. We're going to delve deeper into that in the next episode about the role of AI and scams and ID theft.
Sara Rathner:
For today though, we're going to hear about some of the wild and easy to fall for scams that are out there right now, almost all of which are trying to take your money, plus what to watch out for and what to do if it happens to you. The Federal Trade Commission says it received 2.6 million fraud reports in 2023. So this is not a small or isolated problem.
Sean Pyles:
So Sara, you and I are certainly not immune from being scam targets. At the very least, I've gotten texts that seem like they're from Amazon that asked me to click a link to confirm a recent purchase. I already don't trust Amazon, so there's no way I'm going to click a random link in a text that they send me or a random link from any company for that matter. I assume that you've experienced this as well.
Sara Rathner:
Oh, I constantly get random texts from scammers. They start with something like, "Hey Linda, it's Mike from the party last weekend," and if you tell them that they got the wrong number, they try to keep the conversation going. So I do not reply.
Sean Pyles:
Yeah, and we won't explore this a lot in the series, but recent reports from outlets like The New York Times indicate that when you get a text like that, it could very well be coming from a forced labor camp in places like rural Myanmar. Scamming is a huge industry and this is an international issue. All right, well, we want to hear what you think too, listeners. Tell us your stories of identity theft or share how you're working to fight it or recover from it. Leave us a voicemail or text the Nerd hotline at 901-730-6373. That's 901-730-N-E-R-D or email a voice memo to [email protected].
Sara Rathner:
So Sean, where do we start today?
Sean Pyles:
Well, Sara, this isn't something that we normally do on the show, but we're going to begin with my dad, David Pyles.
Sara Rathner:
Keeping it in the fam, I see.
Sean Pyles:
Yeah. Unfortunately he fell victim to a cryptocurrency scam, and not just one, actually, and lost a lot of money. So we're going to hear his cautionary story and I want listeners to know that we asked him for copies of his bank statements to confirm the story, so we're subjecting him to the same fact checking as anyone else. After that, we'll hear from an expert at the Consumer Financial Protection Bureau with some tips for avoiding what happened to my dad. Our goal in this conversation is to answer questions like how do these scammers actually extract money and information from innocent people, what are the warning signs that you're talking to a scammer, and what can you do to protect yourself?
Sara Rathner:
Crypto is one of those money trends I took one look at and said, no thanks, and moved on to stuff I could actually wrap my head around.
Sean Pyles:
Yeah, it's not my thing either. It can be so complex and difficult to understand. One thing my dad talks about is something called cryptocurrency mining, and for those who are not steeped in the crypto speak, mining is how computers generate and release cryptocurrency like Bitcoin. It's also the process by which those computer networks verify transactions. We're not going to get into more specifics than that, but when you hear him mention it, that's what it is.
David Pyles, or should I say, dad, welcome to Smart Money.
David Pyles:
Oh, thanks. Nice to be here.
Sean Pyles:
I'm having flashbacks to when we would do take your kid to work day growing up, but it's like a role reversal where I'm taking my dad to work day.
David Pyles:
Come full circle.
Sean Pyles:
So you're here today to share the story of a Bitcoin scam that you experienced, and we're going to get into how much you lost and how you discovered that this was a scam. But before any of that, let's start at the beginning. How did you first hear about this alleged money making opportunity?
David Pyles:
I happened to log into Facebook, which is unusual, and I saw that there were a bunch of friend requests, and I'm pretty non-discriminating with my friend requests. I just accepted requests from a number of people that I had no idea who they were. But then I got messaged and started chatting up with this one woman. She was very slick on how she went about it. I encountered several different kinds of scams that I think are worth knowing about.
Sean Pyles:
But this woman messaged you and said, "Hey, maybe there's a way to make some money."
David Pyles:
It's just friendly back and forth. I was at brunch one day and she goes, "Oh, well, I just scraped the side of my car on some parking thing and sent a picture of the scraped up car." It's like, "Oh, well that sucks." And then you look a little closer and it's got these Rolls Royce hubcaps on. It's like, oh, that sucks though.
Sean Pyles:
So she's showing you that she has an expensive car, basically.
David Pyles:
Right. It's like, "Oh, nice car." And she goes, "Oh, yeah. Well, I got it from mining Ethereum," which is one of the crypto coins, and it's like, oh, well, there's no risk. And what you do is you put in money, and what they do is they use that money for mining Ethereum.
Sean Pyles:
So she was offering an easy way to get access to the money you can get from a cryptocurrency?
David Pyles:
Well, just from mining. So it's essentially like you put it in there and it's like high interest. It's one of those, if it sounds too good to be true, it probably is kind of deals. But I was thinking, well, if there are crypto scams, it's probably coming in from fake coins. And I knew that Ethereum was a real coin and it didn't occur to me that the scams would come from a different direction.
Sean Pyles:
And I know from what you've told me, that this happened on Coinbase Wallet, which is part of a cryptocurrency exchange platform called Coinbase, and there's an app you download that mines the currency and is supposed to put the funds back into the wallet, but you didn't realize that there was something in the app that said you give them permission to take the funds out of your account. So it was almost a trick of the terms and conditions through which you were using this company's service.
David Pyles:
That was part of it, but it was the mining app itself. What I've since found after doing some research on this is that pretty much almost any mining opportunity that you run into is a scam.
Sean Pyles:
Yeah, that's probably a good way to think about all of these things.
David Pyles:
And it looked like I was making a lot of money and I put a fair amount of money in there and then it's like, okay, well I want to pull some out. And that's where I found out that there were problems. Everything's great until you try to remove money.
Sean Pyles:
So how much did you put in over what amount of time?
David Pyles:
I put in about $150,000.
Sean Pyles:
Okay. So a lot of money.
David Pyles:
Yeah, a lot of money. So it looked like I was making money. It looked like I'd made $6,000 back on that in a relatively short period of time. This has been oh, almost two years now, so I don't remember exactly what the timelines were.
Sean Pyles:
So my inheritance has gone into this company's service. You think you're making some money on it and things are looking up until you decide to pull out the money, and then you get a different picture of this organization.
David Pyles:
Yeah. Then what happened in this particular case is that they accused me of illegal arbitrage, whatever that is. So I talked to the person that had gotten me in this, it's like, "Look, I tried to withdraw some money and I got accused of all this, and they demanded that I pay a $47,000 deposit to free up access back to my funds," but at that point, you're in it and you're trying to get your money out. And they said, "Yes, we detected illegal arbitrage, so we need to make sure you're not doing anything shady. So you need to deposit $47,000. And then if there's no further incidences, then that'll be released and you'll have access to your funds."
Sean Pyles:
And that's a classic scam tactic as well, is accusing you, the person who has been scammed, of actually doing something illicit, and then they try to pressure you to give them more money because someone who doesn't know better might think that they maybe did do something illicit and then they're in the hole even further.
David Pyles:
So I said, "Well, tell me exactly what I did." It's like, "Oh, well, this looks like illegal arbitrage." It's like, there's no arbitrage. I put money into the account, now I'm trying to take it out. It's like, yeah, I'm not sending them another $47,000.
Sean Pyles:
Were you able to recoup any of your losses?
David Pyles:
No.
Sean Pyles:
How are you feeling throughout this process, working with this alleged woman online who you thought you could chat with who showed you a potential money-making opportunity, and then things begin to unravel and you see it's not quite what you thought?
David Pyles:
At first, it seemed really cool, and it's like, I'm making a lot of money on this. At which point you get that dawning realization, oh crap. But apparently I hadn't completely learned my lesson yet because I was talking to somebody else like, oh, you got scammed. Well, here I do this thing called smart contracts, and you can make money. It's basically like, works kind of like options on the stock market. So you put some money in and for short-term investment, you play the changes on all that. And so they had this app that you could download. I was onto my next scam.
Sean Pyles:
Oh, boy. I didn't realize that there were multiple scams consecutively.
David Pyles:
Yeah, there were a couple that went on. I put some money in on one of those smart contract deals, and once again, it looked like I was making $50,000 or $60,000 on a trade. This was almost brilliant. I hate to give them that kind of credit, but.
Sean Pyles:
Yeah. What made it so sophisticated?
David Pyles:
Well, what they did was I was doing it, and it's like we started investing more and doing more trades. It's like, okay, well you need to put this in then you need to cash out like at the point where I tell you to cash out and you follow this a few times. And I didn't buy into it, but if we're going to live our dreams, then we have to make a lot of money so that we can retire and we can go off and it's like, I'm not retiring, man. I like what I'm doing, but.
Sean Pyles:
Yeah, but they're trying to sell you a lifestyle. They're trying to sell you something to aspire to.
David Pyles:
Yeah. So you're investing and you're putting money in there, and you're presumably making a lot of money on specific trades, and it's like, there's a trade coming up, and so you need to have at least oh, four or $500,000 in the account.
Sean Pyles:
Oh, damn.
David Pyles:
It's like, well, I'll tell you what, if you promise to pay me back, I will front $200,000 of that. You match what you can, and then at the point where we make this trade, then you can just pay me back. And so I look in my app and it's had $200,000 deposited in it. It's like, oh, this is nice. So I mean, if they're willing to put their own money in, it looked like I could go ahead. And so I did that and all of a sudden disaster strikes and I lose everything. So I lost $180,000, $200,000 on that.
Sean Pyles:
On that scam specifically alone?
David Pyles:
On that scam specifically.
Sean Pyles:
Okay, got it. Wow. So how much did you lose in total across these scams?
David Pyles:
I lost 481 altogether. $481,000. Yeah, that hurts.
Sean Pyles:
Yeah. Talk me through how you processed all of that.
David Pyles:
It's probably the stages of grief. I mean, first there's denial and you just go, I just lost all this freaking money. It has made my life very difficult not having that money.
Sean Pyles:
I can imagine so. So dad, you mentioned that this was an expensive lesson to learn. What is the one or two main lessons that you're taking from what you went through?
David Pyles:
Well, one is the thing that you knew already going into it, which is if it sounds too good to be true, it probably is. And the other is, don't invest with people that you only know from the internet.
Sean Pyles:
Those are good lessons, and I would maybe add on to that, if you encounter something that seems like a get rich quick scheme, then run, don't trust it.
David Pyles:
Right. And no matter how nice they are, no matter how much they gaslight you, it was a scam site. And so that $200,000 that got deposited into my account was fake money. It didn't exist.
Sean Pyles:
What did you do after you found out that you were dealing with scams in both instances?
David Pyles:
Well, I filed an FBI report online. There was no follow up whatsoever.
Sean Pyles:
And what are you doing differently as you try to make money and navigate being online?
David Pyles:
Well, I have a regular financial broker. I had actually pulled some money out of a brokerage account to pay for some of my mining escapades. She tried talking me out of it. To her credit, I mean, she was like, "This doesn't sound right." There's a Reddit group about crypto scams. It's a huge list of scam sites. And then once I started looking on it's like, oh yeah, there's that one. Oh, there's that one.
Sean Pyles:
Well dad, thank you for coming on and sharing your story with us. I know it must've been really hard to go through. That's a lot of money that you lost, but I know that others will benefit from hearing what you went through.
David Pyles:
Thanks a lot. Good talking to you, Sean.
Sara Rathner:
Sean, wow, that's a whole lot of money to lose. I'm so sorry for your dad.
Sean Pyles:
Yeah, thanks. I mean, it was a hard conversation to have, but I'm really proud of my dad for sharing his story because so many people go through something like this and they feel bogged down by shame, and they hide it from their loved ones, which can have really detrimental mental health effects on top of the financial pain of all of it. But while my dad's story might seem extreme, it is important to reiterate that it's not unique. Even if you aren't exposed to the cryptocurrency world, there are so many other ways that scammers can get to you, and it's vital to do everything that you can to protect yourself. Part of that comes from knowing what's happened to other people.
Sara Rathner:
I agree. And as I've said in earlier episodes, the more people share their stories, the less power the criminals have to invade our lives. And if you share what's happening as it's happening, somebody that knows you might say, "Hey, you need to stop that. That does not sound like that's a legitimate transaction," and they might be able to save you earlier on too. I've definitely done that for other people and said, "Don't click on that link. That is a scam."
Sean Pyles:
So next up, we'll hear from Lisa Schifferle. She's the Senior Policy Analyst for Older Americans at the Consumer Financial Protection Bureau. And she's seen and heard it all, not just from older Americans, but from Americans of all ages, income, and education levels. We'll talk with her about best practices to do what we can to avoid getting scammed out of our money. Stay with us. Lisa Schifferle, thanks so much for being here on Smart Money.
Lisa Schifferle:
Thanks for having me.
Sean Pyles:
So the last two episodes, we've walked listeners through identity theft and identity fraud, and today we want to talk with you about scams. Give us a sense of the scope of this problem. How many people fall victim to scams in this country, and how much financial damage does that do to both individuals and even to the economy?
Lisa Schifferle:
Well, there are 5.2 million reports to Consumer Sentinel in 2022, and about 26% of those reported a loss. So the amount of estimates of scam loss ranges really in the billions. And if you look at the increase in money loss due to scams in 2022, while fraud reports overall were down slightly, the dollar loss continued to rise. So people reported losing nearly $8.8 billion to fraud in 2022, which is the most recent year of data that's out, and that's an increase of nearly 30% over 2021. And as I recall, 2021 was an increase of 70% over 2020. So we've really seen a huge rise in loss due to scams over the course of the pandemic and continuing beyond.
Sean Pyles:
So the financial impact of this seems like it's continuing to grow year over year. And a quick clarifying question, Lisa, what is Consumer Sentinel?
Lisa Schifferle:
Consumer Sentinel is the Federal Trade Commission's repository of complaints, and they get complaints from not only people who report to reportfraud.ftc.gov, but from a variety of other government agencies, Better Business Bureau and variety of other contributors. So it really is the database that's the most comprehensive in terms of complaints related to scams and fraud. So that's the data that I'm referring to, is the Consumer Sentinel data.
Sean Pyles:
Got it. So we're mostly talking about digital or technology scams here, right? I mean, scamming has been around kind of forever, but I feel like this is usually a fairly sophisticated and hard to detect issue because of the technology that's currently available.
Lisa Schifferle:
Definitely. I mean, we're seeing some scam trends right now, including romance scams as well as investment scams, being at an all time high, and scammers are increasingly using cryptocurrency and also social media as tools. So in terms of the technology, social media is one of the main tools for scammers, especially in investment scams and luring people in and increasingly scammers are requesting payment by cryptocurrency. It used to be by gift cards, wire transfer. Wire transfer is still one of the main ways that scammers are requesting payment from people, but cryptocurrency is increasing.
Sean Pyles:
And is that because crypto is harder to trace?
Lisa Schifferle:
That is one of the reasons. I mean, cryptocurrency, gift cards, and wire transfers because scammers know that once you send them money by one of those mechanisms, it's very, very hard for you to get them back and it is hard to trace. So that's why they request all of those. I think another reason why they're requesting cryptocurrency right now is because so very few people really understand what cryptocurrency is and how it works. So for example, the investment scam increases that we're hearing, a lot of those are related to cryptocurrency where scammers are saying, I'll teach you how to invest in cryptocurrency. But what they are really doing is giving you their own cryptocurrency accounts. So you think they're teaching you how to invest, but really they're teaching you how to send money directly to them.
Sean Pyles:
So Lisa, earlier in this episode, we spoke with my dad who fell victim to a combination cryptocurrency, investing and pig butchering scam. My dad likes to think of himself as a pretty savvy person who has a low threshold for BS, but he was duped. And the reality is no one thinks that they're going to fall for a scam, but like you mentioned earlier, everyone is vulnerable to them. I'd like to hear what sort of mindset people should have to best protect themselves from these ever sophisticated scams.
Lisa Schifferle:
Well, for starters you raise a really good point, is that anyone can be affected by a scam. It doesn't matter how educated you are, it doesn't matter your race, your gender, your age. So people should not be ashamed or embarrassed if they do lose money to a scammer. These are sophisticated criminal enterprises. They are often overseas crime rings that are dealing in romance scams or cryptocurrency investments. So some things that people can keep in mind to try to avoid scams of all types. If it's a phone scam, beware of any incoming calls because you really can't tell who they are from. The caller ID can be spoofed, and it is spoofed by these scammers. So it's really important to never give any personal information to anyone who calls you or emails you because you can't tell who they are. You should always hang up and call back at a number you know to be correct before giving any information.
Another general tip is to take your time. Don't let anyone rush you. That's what these scammers try to do. They try to rush you into making a decision by telling you something's urgent or an emergency like the family emergency scam where they'll say, oh, this is your grandchild and I'm overseas and I need you to wire money fast because I'm in jail or in the hospital. So just take your time, verify before sending any money. Another big tip is think about how you're asked to pay. Like we mentioned before, cryptocurrency, wire transfers, gift cards, those are all the favorites of scammers. So if you're being asked to pay in one of those methods, that's a red flag of a scam. And lastly, knowing about specific scams is key because studies show that if you know about a specific type of scam, you're far less likely to lose money to it. So it's important that we all talk about scams and share about scams like your father did, share his experience so other people can learn and not lose money to the same type of scam.
Sean Pyles:
Is there a typical victim profile? A lot of people might think it's really just something that elderly people experience, but that's not accurate, is it?
Lisa Schifferle:
So you highlight a very important misconception, which is that many people think scams mostly affect older adults, but reports to the FTC's Consumer Sentinel actually tell a very different story, which is that anyone can be scammed. In fact, those people in their 20s reported losing money to fraud in 43% of reports while people in their 70s reported losing money in only about 23% of reports. So the older people are losing money less. But the other interesting thing is that when older people did experience a loss, people aged 70 and older report a much higher median loss than any other age group. So they aren't losing money as often, but when they do lose money, it's a larger amount of money.
Sean Pyles:
Let's turn to some definitions because some folks might not be familiar with the various terms in the scam industry, and hopefully those who haven't had to deal with scams may not have heard of some of these things either. So Lisa, I'd like you to walk us through imposter scams, investment scams, phishing, vishing, smishing, and like I mentioned earlier, pig butchering, which yes, those are all real words, so let's take them one by one. What is an imposter scam?
Lisa Schifferle:
An imposter scam can come in a lot of different varieties, and this is where the scammer pretends to be someone who they are not. So it could be that grandparent scam, grandchild scam that I talked about, or family emergency scam where they pretend to be a family member in trouble and ask you to wire money. It can be a government imposter scam where they pretend to be social security or Medicare and try to get your social security or Medicare information or try to get you to pay for goods or services that you don't actually need. It can be also them pretending to be your bank, like you discussed earlier. And it can be the romance scam, it can be a whole variety of different types of imposters. So it's just anytime a scammer is pretending to be someone who they aren't in order to lure you to give them money.
Sean Pyles:
This one might seem kind of obvious to people, but can you please walk us through what an investment scam is?
Lisa Schifferle:
Sure. An investment scam is when someone is trying to get you to invest or put money into something, and often they pressure you to act quickly before it's too late. They'll usually claim that their results are guaranteed or no risk. Sometimes they tell you to leave it all to them and don't worry about it. If they won't explain their payment structure, that can be a red flag. Or if they ask you to put all your money in one investment, that's another red flag. If you think of the old adage, don't put all your eggs in one basket. That's a red flag if someone asks you to do that. And also, like we talked about before, be very careful when dealing with cryptocurrency investments because those are one of the increasing scams right now.
Sean Pyles:
Well, now let's turn to some of the funny words in the scam world. Funny words that have very unfunny consequences. And I think this word is probably part of the zeitgeist at this point, but can you explain what phishing is for us? And this usually happens via email, right?
Lisa Schifferle:
Right. Phishing is just when they send you something by email in order to try to get you to send additional information. So they may pretend to be your bank and then say, I need your account information. They may pretend to be Medicare and say they need your Medicare number. So it's kind of like fishing, although it's spelled PH, not with an F, but it's kind of like fishing because they're basically throwing in the hook and trying to get you to give them a little bait so they can reel in and get more information from you.
Sean Pyles:
And this next one is relatively new, I think. Vishing. It's like phishing, but by phone.
Lisa Schifferle:
Exactly. It's voice messages purporting to be from reputable companies or phone calls purporting to be from reputable companies such as the bank one that you discussed before. But it can be a variety of other types of phone calls. There's the IRS imposter scam too. So vishing is really just short for voice phishing, so it's using the telephone to conduct phishing attacks.
Sean Pyles:
There's also smishing, which is a new word for me, but this is phishing by text. How does this happen?
Lisa Schifferle:
It's similar to phishing and vishing. It's just done by text. So you'll get a text message which is asking for information. The important thing to know about phishing and smishing is don't click on any links in unsolicited texts or emails because those can download malware and they can also lead you to scam sites where they're asking for personal information just to either perpetrate identity theft or to perpetrate a scam.
Sean Pyles:
Are there particular forms of smishing that might be more common than others? I'm wondering if maybe a text from what seems like your bank is more common than another example I've seen where it's someone reaching out and saying, "Oh, hey, it's Angie," and they pretend like they've texted the wrong number and they try to strike up a conversation with you. What are among the most common forms of smishing that you're familiar with?
Lisa Schifferle:
Well, anecdotally, we've heard a lot of increase of that wrong number type of text that you've talked about where somebody pretends to reach out to you and then when you say it's a wrong number, then they start befriending you and then they can lead from there into any host of a variety of different types of scams, including romance scams and other scams. But they use that wrong number as a lure to get you to start talking with them.
Sean Pyles:
And this leads me to my next question. There's another type of scam that has a name that's more gruesome than funny, one I mentioned earlier, pig butchering. Can you describe this and how it works?
Lisa Schifferle:
Yes. And let me start by saying that we really don't like to use the term pig butchering because I think it's very offensive to victims, and as we said, it can happen to anyone, but it is a commonly used term. So it is important for people to understand what it is. I mean, it's basically an investment scam with a cryptocurrency twist. And oftentimes it's related to a romance scam where someone will build up over time, the relationship, and then ask you to invest usually in cryptocurrency and then take your money.
Sean Pyles:
The name comes from the idea that someone is building up a relationship with you, fattening you up in a way before the slaughter, before they take your money.
Lisa Schifferle:
Right.
Sean Pyles:
Well, are there any other common types of scams that I might've missed?
Lisa Schifferle:
Well, the tech support scam is one that we haven't talked about that's very common, and it's one of the most common, especially affecting older adults. And that's where you may get a call or you may get a pop-up on your computer saying that you have a virus, and then they either make you pay for services that you don't need because you don't really have the virus or they remote into your computer and take your personal information. So again, this is where it's important not to click on links or call numbers on pop-ups, and instead, you can turn off your computer and back on and call a number you know to be a reputable tech support company, not a number that pops up on your screen.
Sean Pyles:
And what are some steps to take if you find that you have been duped in a scam?
Lisa Schifferle:
Well, first of all, if you've paid a scammer, it's really important to contact your financial institution or wire transfer company or however you paid. If you paid by gift card, contact a gift card company right away. It's very hard to get your money back, but the sooner you contact the payment method, the more likely you are to get it back. Then it's important to report the scams. You can report them to reportfraud.ftc.gov. These reports can help law enforcement shut down scammers and also stop other people from being scammed. So we really want to encourage people not to be ashamed or embarrassed.
Sean Pyles:
Well, Lisa, what laws are out there that help victims recover their money?
Lisa Schifferle:
Well, that's a really good question. And the CFPB actually did a whole report recently on recovery from elder financial exploitation in particular. And in terms of all the factors that affect whether people get their money back. And we looked at things like whether the cases get investigated, whether they get reported, whether they get prosecuted, and then whether you get the money back. In terms of the laws involved, they can let you get your money back. Those are usually going to be state law and vary from state to state. But for example, if you bring a criminal case, you may get criminal restitution, get your money back that way. If you bring a civil case, you may get payment that way. Also, oftentimes, they'll get their money back just through an agreement with the perpetrator, especially if it is somebody who’s known to them because we've talked a lot about the stranger scams. But there also can be scams by an exploitation by people who are known to the individual.
Sean Pyles:
So Lisa, when we talk about how people can protect themselves from scams, the word vigilant comes up a lot. People need to exercise vigilance to avoid falling victim to a scam. But honestly, how do you think people can continue to keep up this strong front in the face of so many scams?
Lisa Schifferle:
I mean, it's good to just listen to podcasts like this, read the news, and sometimes you'll get notifications from your financial institutions or from your local government about scams in your area. And really talking about scams is really important. Talk to your friends and neighbors. If you hear about a scam in your area, warn other people because you may know about scams. You may have listened to this podcast and your friend hasn't. So pass on that information to other people, and that way we can all learn more about the latest scams and protect each other from them.
Sean Pyles:
So I'm asking this of all the experts that we're talking with for this series. So I'll ask you too. Have you ever fallen victim to a scam or identity theft or fraud?
Lisa Schifferle:
I don't think so. I mean, I've certainly been part of data breaches because who hasn't? But it can certainly happen to anyone. And I know that, for example, FTC commissioners have said they were victims of tax identity theft. Prosecutors who deal with these scams have family members who may lose money to them as well. So really no one is immune. And once your information's out there in a data breach too, you don't know how or when it's going to reemerge.
Sean Pyles:
Well, Lisa Schifferle, thank you so much for helping us out today.
Lisa Schifferle:
Thanks for having me.
Sean Pyles:
So Sara, what I'm thinking about after that conversation is just how many different types of scams there are out there. And at this point, I think the wisest move for people is to be skeptical of any inbound communication. Double and triple check anyone that you're going to send money to and talk with your loved ones about the scams that you’re seeing so they can hopefully avoid falling victim to them.
Sara Rathner:
Yeah, don't pick up the phone if you don't recognize the number. Don't answer a text if you don't recognize the number. Just be kind of antisocial about it. Yeah, you really do have to put up a lot of walls to be safe.
Sean Pyles:
Yeah. Especially through digital communication. You can make friends, but maybe try to do it IRL where you can see someone face-to-face.
Sara Rathner:
All right, Sean, tell us what's coming up in our final episode of this series.
Sean Pyles:
Well, Sara, this is when it gets creepier and creepier as technology advances into artificial intelligence that scammers and thieves can use to get us to part with our money, including voice cloning to make you think that a loved one is in trouble and you'd better pay up to save them.
Jennifer DeStefano:
I had a full conversation with my daughter. It was interactive. There was no pause, there was no break. There was nothing that would lead me to believe that wasn't her. So when the mom that stepped outside called 911, she came back in and she said, "Hey, 911, tipped me off that there's this scam where they use AI and they can replicate anyone's voice." I didn't believe it. It gave me hope, but I didn't believe it.
Sean Pyles:
For now. That's all we have for this episode. Do you have a money question of your own? Turn to the Nerds and call or text us your questions at 901-730-6373. That's 901-730-N-E-R-D. You can also email us at [email protected]. Visit nerdwallet.com/podcast for more info on this episode. And remember to follow, rate, and review us wherever you're getting this podcast.
Sara Rathner:
This episode was produced by Tess Vigeland. Sean helped with editing, Kevin Berry helped with fact checking and Sara Brink mixed our audio.
Sean Pyles:
Here's our brief disclaimer. We are not financial or investment advisors. This Nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.
Sara Rathner:
And with that said, until next time, turn to the Nerds.
