‘Tis the Season … for Phone Fraud

By Laura Chiesman 

In this world of social media, email and 24/7 connectivity we hear more and more about cybersecurity. This has been especially true recently, and rightly so, since the Equifax breach that affected so many. There is however another threat that we may mistakenly put in the outdated category and it is good, old-fashioned telephone fraud.

As the holiday season approaches, followed closely by tax season, the opportunities are ripe for scammers to prey on well-meaning citizens. These scams are perpetrated by individuals or even organized groups and call centers using a variety of approaches. They may claim to be a charity, a long lost relative, a bill collector or even a representative of the IRS.

These types of scams are categorized as Imposter Fraud. The goal of many of these scammers is to get the victim to provide personal information and eventually to send money. At 58 percent, the most widely reported method of payment for those who reported losing money to fraud was a wire transfer. Of those who noted in their fraud complaint how they were first contacted, 77 percent said it was by phone.1

Attached here is a link to a great resource from the FTC: “Imposter Scams…Pass it on.”  This is very important information in an easily sharable format.

It’s hard to imagine how we could be persuaded to give financial information, including social security and bank account numbers, to a complete stranger over the phone, but according to reports by the FTC and many other sources this is happening at an increasing rate.2

Fraudulent telemarketers use five basic techniques:

  • Scarcity: The senior has been identified as the grand prizewinner, but if they don’t accept the prize immediately (and pay that “handling charge”) the runner-up will get the prize instead.
  • Hype: The telemarketer screams and hollers about how excited they are that the senior has won.
  • Authority: The telemarketer passes the phone to his “boss,” so his target will know the offer is “legitimate.”
  • Phantom Fixation: The prize is too good to pass up, and the targeted senior becomes fixated on it.
  • Reciprocity: The telemarketer explains that they won’t receive their commission unless the senior accepts the prize and pays the handling fee. When the senior protests that they don’t have enough money to pay the fee, the scammer asks how much they can afford, and says they’ll accept that smaller amount, just because they’re so happy the senior has won the prize.

Jim Wright, managing director of programs at the National Crime Prevention Council (NCPC), explains that fraudsters will change from one persuasion tactic to another, if necessary. “The theory is the longer we’re on the phone, we’re going to do business, legitimate or otherwise,” he says.  One clear option is to hang up on people we don’t know and don’t want to talk to, but many of us, particularly seniors, are reluctant to abruptly cut off a call and that’s exactly what the bad guys are counting on! The NCPC has put together a short guide on senior fraud prevention. The guide features five ways to make unwanted telemarketers go away.

  • Tip #1: Never give personal information, such as bank account or social security numbers, to anyone over the phone, unless you initiated the call and know you’ve reached the right agency.
    Comeback: “I don’t give out personal information over the phone. I’ll contact the company directly.”
  • Tip #2: Don’t believe it if the caller tells you to send money to cover the “handling charge” or to pay taxes.
    Comeback: “I shouldn’t have to pay for something that’s free.”
  • Tip #3: “Limited time offers” shouldn’t require you to make a decision on the spot.
    Comeback: “I’ll think about it and call you back. What’s your number?”
  • Tip #4: Be suspicious of anyone who tells you not to discuss the offer with someone else.
    Comeback: “I’ll discuss it with my family and friends and get back to you.”
  • Tip #5: If you don’t understand all the verbal details, ask for it in writing.
    Comeback: “I can’t make a decision until I receive written information.”

Being aware and assertive goes a long way. Please share and discuss these resources with friends and relatives for a happier and more secure holiday, tax season, and year ahead!

Find out what it might be like to have a personal WealthCoach by your side, helping you make smart decisions about your money in the context of your own personal situation, and creating the future you dream of. Call our wealth services firm in Satellite Beach, FL – Melbourne/Brevard area at (321) 773-7773 to schedule your complimentary initial consultation.

You should not assume that any discussion or information contained in this publication serves as the receipt of, or as a substitute for, personalized investment advice from FirstWave Financial. A copy of the FirstWave’s current written disclosure statement discussing our advisory services and fees is available upon request.