Don’t Fall for these Financial Scams!
Financial scams—via phone or email—are rampant, and are costing unwitting recipients a lot of money.
Unfortunately, the days of the Nigerian prince email scam are not quite over (it persists in other guises) and hackers and con artists are phishing in new ways. Do you know a senior who’s gotten the distress call or an email from a far-off locale, presumably from a grandchild who needed big bucks for bail money or other false pretenses? Last year, well-meaning American seniors paid out $36.5 billion to con artists.
All Americans—investors, consumers, business owners, employees—should be aware of these financial scams to avoid fund or identity theft.
Phishing emails and Smishing Texts
These malicious emails often look like the real thing and usually come from a company with which you already do business. The messages are often marked as urgent (“We’ve been trying to contact you!”) and seem official. Before you click anywhere, look closely at the sender email address – or phone number of sender, read the contents for grammatical, spelling and punctuation errors, and check the footer for odd notations. Chances are, this is not a real email or text from your bank or other establishment. One click can open up your identity to hackers who will access your accounts. Always take a minute or two to check these, or contact the vendor or institution to find out if they really sent the email or text. Spending a few minutes to do so will save you countless dollars and hours.
Computer tech support calls
No, Microsoft or other tech companies don’t call customers at random to check on your computer. And the problems they claim to have discovered with your computer likely don’t exist. If your business has an IT support contract with a services provider, your team should know who it is and be able to easily identify its reps on the phone; most consumers don’t have this level of tech support (or should know if the real deal is calling).
Don’t take those phone calls and do not give anyone on the phone your credit card or bank information. Also, do not allow these scammers to sync up online with your computer; they will likely install malware that will enable them to access your files and confidential information.
The IRS does not call taxpayers, it only corresponds by postal service. If someone calls you claiming to be an IRS representative collecting back taxes that are due immediately, hang up the phone.
Stolen debit cards
Many of us have gotten email or text alerts from our banks, asking if an unusual transaction was really ours. We even get the occasional phone call from a credit card company that suspects foul play. This is a good thing!
However, scammers are now calling consumers about large withdrawals at bank branches with their debit card; the callers express concern about the withdrawal being suspicious and inform the person that the police are at the bank holding the “culprit.” The caller asks if the debit card is in your possession (not an unusual question in real situations) but here’s the kicker—the caller will then ask you to verify the card number and PIN. Your actual financial institution will not ask this. The police aren’t holding anyone against their will, and you are not rescuing anyone by giving away your confidential information.
An email with the subject of eFax pretending to come from eFax could Result in Malware Infection – Virus! This arrives as a very convincing email that appears to look like an official fax sent from eFax Corporate. The email notifications are being sent by cyber criminals to trick the recipients into clicking on the link in them that downloads a malicious file or virus onto their computers. Any attempts to open the malicious file will result in the recipients’ computers getting infected with a virus, ransomware, spyware or other malware.
Words of caution:
- Don’t ever give out any sensitive information—account numbers, Social Security numbers, PIN numbers—to anyone on the phone who you do not know.
- If you have caller ID and do not recognize the phone number, don’t answer. If you do answer and you are asked for the name of your financial institution or for account numbers, hang up.
- There are no foreign princes or banks that want to send you millions of dollars. Mark those emails as spam and delete them.
- Read any email that looks official very carefully to make sure it’s real before clicking through or providing private information. Better yet, contact the financial institution, retailer, or other business to find out if they really sent it.
Don’t hesitate to contact us!
Beware of Investment Fraud in Your Self-Directed IRA
Beware of Investment Fraud in Your Self-Directed IRA – and Being Defrauded of your Retirement Savings
Ponzi schemes, identity fraud and other related problems can ruin investors
A story broke in early April about two Texas men who targeted elderly retirees in a $2.4 million Ponzi scheme and a related $1.4 million scam involving an oil and gas company they controlled. Unfortunately, it’s the type of fraud that can also happen to owners of self-directed IRAs if they’re not careful.
According to the SEC, the owner of a retirement planning firm cheated at least 30 investors, who were lured to invest their retirement savings into his Texas planning firm; he then used a portion of the funds to support a lavish lifestyle. Ponzi payments kept his scheme afloat after he’d squandered the money; investors believed their promissory notes were legit and they were enticed to increase their investments (in some cases, nearly all of their pensions and savings). The other man joined him in 2015 during the alleged fraud, which ran from 2010 to 2017. The SEC is on the case.
As the director of the SEC’s Fort Worth regional office stated, “Fraudulent conduct targeting the most vulnerable among us is reprehensible. As the US population ages, financial exploitation of seniors is an increasing and serious problem.” In December 2017, another alleged scheme out of Florida bilked investors—many of them seniors—out of $1.2 billion through a group of unregistered funds, the regulator says.
Since individuals who self-direct their retirement plans make all their own investment decisions, and must conduct their own due diligence regarding any investment they include in their plans, these fraudulent schemes (and many others) are a cautionary tale.
Self-directed IRAs and fraudulent investments
We cannot stress enough how important it is for investors to conduct thorough research before making a self-directed (or any) investment. A prior post about the importance of researching your investments is here.
Investors are wise to go with what they already know and understand in terms of any alternative assets (or investment funds for that matter) that they plan to include in a self-directed IRA.
Fraud shows up in many ways, including:
- Fraudulent emails
- Ponzi schemes/pyramid schemes
- Elder abuse (as noted above, robbing seniors of their life savings)
- Nigerian 419 scams
- Identity fraud
- Advanced fee schemes
The SEC cites several red flags about potential fraud: look out for promises of high returns with little or no risk, unlicensed and unregistered sellers and overly consistent returns.