Scams are on the rise. Pick a reason why – the holiday season, the economy, FTX’s collapse, the pandemic, or any other reason. Either way the effect is the same. We all have to get better a spotting scams, so what do you need to do and be aware of:
Real situations never require payment by gift cards. A common scam is to send an unsuspecting customer a check for deposit and get numerous gift cards to send to the scammer. By the time the check gets returned back through the banking system, the scammer has the gift card, and the customer is left holding a bad check that the bank needs funds for. Think about the last time you bought numerous gift cards for a single individual … I would wager that most people cannot think of a single instance where sending hundreds of dollars split up among numerous gift cards to a single person by the mail was necessary.
Legitimate individuals don’t tell you to keep this a secret or provide you a script to tell your bank. Common phrases I have heard - “Well, they told me not to tell anyone,” “they told me to tell the bank this,” “they told me to tell my family that.” If a person you know on the digital world is telling you not to talk to the people you know and trust in the physical world, that’s a red flag for me. Who do you trust more?
Some of these cons are built up over years. A scam known as a "sweetheart scam" starts innocently enough. Two individuals start an online relationship. The individuals instant message (IM), text, send pictures, some even video chat. Eventually the scammer presents a challenge (I need help with traveling to or from a foreign country, a medical bill, an estate settlement). The scammer offers to send a check to the other individual of “their funds,” and ask the innocent person to send them a portion of it. The innocent party sends the funds, the check later gets returned, and the innocent party is left with an overdrawn account and a broken heart. Meanwhile, the scammer may be working numerous of these all over the world with various “relationships” at various stages of payoff. I don’t mean to dampen anyone’s hopes of finding true love in the digital age, but I would strongly advise slowing down when money gets involved, which brings me to my next point.
Wait two weeks. This not a perfect rule. Checks can take up to two weeks to clear the banking system and be returned back to the bank of first deposit. It usually happens faster than that, but it can take up to two weeks. If you didn’t expect the funds in the first place or if you are being asked to send it to someone else (ACH, wire, money order, gift card), deposit the check for a couple of weeks and wait to see if the check gets returned back. You can also tell the bank when you deposit it; the bank can place a hold to protect the funds (and protect you from yourself from using those funds accidentally).
Get in the habit of questioning things and slow down on reacting. Text and email scams bombard us every day. Some are really good: “Your parcel has been re-routed to the post office for delivery. Click the link for additional information.” It took me a second to realize that I hadn’t ordered anything. Luckily, I didn’t click. In today’s social world, we are prepared for the next advertisement, text message, social media post, or email notification constantly. We hear the notification ding, and we are poised to click. Slow down and read carefully.
Businesses should create a questioning culture. Business owners should create an environment where employees buying things, making transfers, handling banking matters, or paying bills feel enabled to ask questions about whether the transaction was authorized. Invoice payment instructions should be questioned if they are different from a previous time or for a new vendor. Yes, email is convenient, but it is not guaranteed to be secured without encryption. This is where in person or phone is your ally. If you think something you got by email or text is too good to be true or a little fishy, get the other person on the phone or find another way to verify the information.
Trust your gut and talk to someone. If something feels off about a situation, that is a good indication that it may be too good to be true. Bankers see and hear about fraud situations every day. We know how sophisticated some of these schemes can be. Even perfectly legitimate business operations may warrant a second opinion, and your banker can provide you with a fresh perspective. It can also be hard when you think something is fraud. It may feel embarrassing to talk to your bank. That’s what the scammer is counting on. Talk to your banker, they are here to help.
We all have to get better at slowing down and questioning the scams circling us like sharks each and every day. That check in the mail that you weren’t expecting probably IS too good to be true. You DID NOT win the lottery that you never remember playing. Finally, I don’t know anyone who discovered they were long-lost royalty and now extremely wealthy (outside of a holiday movie) so odds are you probably won’t either. Slow down and remain vigilant.