“Wealth isn’t primarily determined by investment performance, but by investor behavior.” — Nick Murray, Simple Wealth Inevitable Wealth
A year ago, Eden and Mark (last name withheld), lost their life savings to a scammer. “We lost all the money we made in our business. All the money we saved together for the 38 years we’ve been married, and it was all taken from us,” Eden told California news broadcasters.
It’s heartbreaking and frightening, but what happened? Eden received a pop-up notice on her PC about a virus and was told to call “Microsoft.” When she called the number, she was told that there was a “terrible problem” on her computer. The man on the phone, who was not associated with Microsoft, told her the problem was connected to identity theft, and she needed to transfer her money to safe government accounts in Hong Kong. With the assistance of other scammers, she complied, making five wire transfers to the criminals to the tune of $564,000.
Scammers have a talent for appearing genuine, trustworthy, and convincing. They may make you feel like they genuinely care about your well-being.
Be On Guard
There is no shortage of tricks scammers will use to deceive you. Some will use deceitful emails and texts that encourage you to redirect to their fraudulent websites. Others may impersonate loved ones, requesting financial assistance. These fraudulent activities are becoming increasingly sophisticated and diverse.
According to the latest data, total losses reported to the FBI’s Internet Crime Complaint Center (IC3) increased a whopping 84% in 2022 to $3.1 billion. This may be just the tip of the iceberg. Some may be unaware of the scam, and others may be too ashamed to report the theft.
Understand Their Methods
The following are some of the primary scams being used now. Beware!
- Investment scams promise quick riches and pressure the elderly into accessing their retirement accounts, the equity in their home or convince them to go into debt.
- The lottery/sweepstakes/inheritance scamfalsely notifies individuals that they have won a cash prize or will receive an unexpected inheritance from a distant and previously unknown relative.
- There has been an increase in romance scams, which can be particularly challenging to identify, as the perpetrator creates a false online persona to gain the trust and affection of the victim.
- Scammers call unsuspecting older adults and pretend to be from the IRS, Social Security or Medicare. These organizations never make unsolicited phone calls. Hang up the phone.
- Be aware of the grandparent scam. You may get a call that goes like this. “Hi, Grandma. Do you know who this is?” When the unaware grandparent guesses the name of the grandchild the scammer most sounds like, the scammer secures their trust. The fake grandchild then asks for money to solve some urgent financial problems (such as overdue rent, car repairs or jail bonds).
It’s important to stay vigilant, as scams can come from various sources. Stay alert and on guard. If the request looks out of the ordinary, that should be a red flag. It may turn out to be legitimate. But if not, caution and an ounce of prevention are worth their weight in gold.
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