Protecting Your Family From Financial Scams – Jan. 2022

Full Episode Transcript

Naj Srinivas:

Hello and welcome to the Fisher Investments’ Market Insights podcast, where we discuss our firm’s latest thinking on global capital markets and current events.

I’m Naj Srinivas, Senior Vice President of Corporate Communications here at the firm.

And welcome to the very first Market Insights episode of 2022. Today, we’ll be looking at a topic that, unfortunately, is affecting more and more people every single year: financial and investment scams and fraud. While scammers trying to get your money is certainly nothing new, technology has given fraudsters a more secretive, more persuasive edge that is ultimately more dangerous to all of us. 

The good news is that being prepared and knowing what to watch out for can really help you recognize scams and begin protecting yourself and your loved ones from scams. To help us unpack this important topic, I talked with Nicole Haseltine. Nicole works in our US Private Client Group, helping our clients understand more about financial scams and fraud, and educating them about the tools that they can use to protect themselves against fraudulent activity.

Before we dive in to our interview, I have a favor to ask of you. Pleas rate and recommend this podcast wherever you listen. By rating and reviewing this podcast, and following us if you don’t already, you can be informed when new episodes are published and, of course, you’ll also help us get this valuable information out to more people. Thank you so much in advance. 

With that, let’s dig in to our interview with Nicole about protecting yourself from financial scams and fraud. Please enjoy!

[TRANSITION MUSIC]

Naj Srinivas:

Well, Nicole, thanks so much for joining us today.

Nicole Haseltine:

Thanks. Thanks, Naj. Very happy to be here.

Naj:

So Nicole, for our listeners, why don't you describe a little bit about what your role is and, and maybe why we're sitting here talking today.

Nicole:

Happy to. Well, I've been with three, your investments for a little over five years now had a number of different roles, both client facing and support roles over the years. Currently have quite a few responsibilities as a group manager here at the firm, but one of the main things that I do and that I really focusing on is helping our clients learn about all the different types of scams and fraud situations that are out there, and give them tools to protect themselves against the wide array of fraudulent activity that we see on a day-to-day basis here.

Naj:

Well, that's great. And I know this topic is of interest to a lot of our listeners just given the prevalence of new scams and fraud over the last couple of years, and of some of the major headline stories related to different companies being victims of scams and fraud.

So let's dive in. First of all, who is it largely that's actually being affected by scams and fraud. If we think about in this country today, is there a specific demographic that scammers and fraudsters focus on?

Nicole:

There really is. You know, generally speaking fraud can impact anyone from any age group, any demographic; however, typically seniors really at or near retirement tend to be targeted most often. Kind of break things down really in the 60 to 69 age group. Uh, looking at the last couple of years, that age group has filed the most fraud reports with the federal trade commission, uh, and tend to report the most dollars lost on an annual basis.

Naj:

And why is that?

Nicole:

When you come to that age, you typically have accumulated assets. So you've worked hard for your entire life. Your pretty regular income stream, whether that's your last paychecks here or coming out of your IRA. Um, there does tend to be also a reluctance to report fraud with that age group. There's a big psychological aspect that plays into this, and scammers are aware that they might be a little bit less likely to be reported when targeting that age group. And there is a small subset of that age group and above that do tend to run into some cognitive issues, uh, diminished capacity and whatnot that make them a little bit more vulnerable and easy targets.

Naj:

Who are some other common targets of scammers?

Nicole:

It could really be, uh, as I mentioned, anyone. Kind of different types of scam impact, different age demographics and demographics across the, the country. Uh, for example, looking at earlier ages tend to be impacted by online shopping scams, whereas, and that would be kind of in the twenties to 30 age groups. Getting into middle age, tend to be impacted by more business imposters or government imposters and whatnot. Uh, but across the board scammers do also tend to target vulnerability. So anyone who has isolated, living alone, potentially, unfortunately, someone who has just gone through some sort of tragedy or, or life changing event, and again, tend to be more vulnerable and susceptible to fall prey to one of these various types of scams.

Naj:

Nicole, what about small businesses?

Nicole:

Absolutely! Small businesses can definitely be targeted and are often targeted more often than larger corporations, uh, for a number of reasons. They’re…they often has less personnel and less resources just to fight these types of fraud. The training tends to be a little bit limited. Uh, sometimes individuals are stretched pretty thin across a number of different responsibilities, working at a small business. Scammers know these things. They know about the lack of training, the lack of resources. So they'll target those as they tend to be a little bit more susceptible to, to falling prey.

Naj:

Nicole. I'm sure that there are people listening right now who are probably saying to themselves, well, I've heard of all of these scams. I'm just too smart. Or maybe I've heard about them. And therefore there's no way that I would fall prey to one. What would you say to that?

Nicole:

I think that's a pretty common misconception. And the fact of the matter is that no matter how educated, how smart, how successful you are, anyone can really fall prey to one of these scams.

Scammers and frauds are extremely sophisticated. They know how to play on vulnerabilities. They know how to trick even the most intelligent and educated of people. And when you think about past games, you've heard maybe someone mentions I've, I've read about all these scams. There's no way I'd fall for one. When you're hearing about a scam or reading about a scam, it's already been identified that what's happening is fraudulent activity. So when you're going through, it's easy to pick out the red flags. It's easy to say obviously that, you know, something was fishy there at that point in time. I would never fall to that.

But these scammers very, very elaborate. They target somebody and they can work with them for months, if not years at a time. Slowly, drip dribbling on them over time. So it just is much, much more difficult to, to fall prey than one might think.

And people do tend to be a little bit over confident in their ability not to fall for a scam. I think there's that one statistic came out a couple of years ago – a little bit unrelated, but 80% of American drivers think that they're above average. Kind of goes the, the same school of thought here is that really no matter how, uh, confident you are, you can still fall prey.

Naj:

There's probably also a little bit of a hindsight bias going on when it comes to scams. People have heard about certain scams before. And so they say to themselves, well, I already to know about that one. There's no way that I could fall prey to it. Sort of like people look at a hot stock and they say, well, everyone knew that that stock was going to do what it did. Um, scams, when they're emerging are really hard to actually identify and pinpoint.

Nicole:

Exactly. And the successful scams, they always, uh, when they're targeting their, their victims here. There's always some sort of familiarity that catches their attention. So I think we've all probably had voicemails on our cell phone about some extended warranty or some cell provider reaching out, uh, to gather some information about you. Those are widely known as scams.

When you think about them, there's always some element of familiarity, as I mentioned. A cell phone provider talking about your existing contract, and if you happen to be with that cell phone provider that might engage you and encourage you to reach out and think it is more legitimate.

Naj:

Do you have some tips for our listeners on how to protect themselves from financial scams and fraud?

Nicole:

I do. And I'd say there are a number of tips we can definitely go into in more detail, but there are three things that I'd like to mention up front. Really the three most important things to remember when dealing with financial scams and that is, uh, we like to refer to them as the three Us. And the three Us stand for unexpected, unsolicited and urgent. So when someone reaches out to you –  a potential scammer – they're always going to follow that three-U pattern.

The initial contact is going to be unexpected. Their targets are not going to have initiated a contact. They're not going to be waiting around for this particular phone call.

It's going to be unsolicited, meaning that they likely the target had not, you know, filled out a form, requesting more information on that. It's really going to come out of the blue.

And there's always going to be an aspect of urgency. The target is going to be urgently asked to do something. When you put that time, pass on it and stress that urgency, it tends to give individuals less time to think. So they tend to act more quickly and without thoroughly vetting the process.

Naj:

So Nicole, would you be so kind to actually walk us through what are some popular or emerging scams that you're monitoring today?

Nicole:

So there are a number of different types of scam. Fraud can really take on all shapes and sizes, but there are three categories of scams that are coming up more prevalently right now, and those would be advanced pay schemes or scams, romance scams, and scams by trusted individuals.

Naj:

So let's, let's walk through each of those. And maybe you could give us an example of how they work. Let's start with advanced pay scams.

Nicole:

Sure. So advanced pay scams is a pretty broad category. They can come in all different forms, they follow the same general pattern. And that pattern is that a individual who is targeted pays money in anticipation of receiving something back of greater value and then never receive anything back. So they’re out whatever sort of upfront payment that they made. As I mentioned, these can look quite different. Uh, often they involved some sort of fraudulent investment. They might involve a lottery or a sweepstakes, uh, scam. Uh, one that we see quite common is an inheritance scam.

So an individual might receive either an email or a letter out of the blue informing them that they're the next of kin to some long lost relative have passed away and they're owed millions of dollars for an inheritance. But in order to claim that inheritance, they have to pay some sort of tax, inheritance fee, whatever it might be in order to get that inheritance paid out

So they make the tax payment, it's relatively small value anticipating, you know, four-folds of money, millions of dollars in return are out the upfront payment and never receive anything.

Naj:

What about romance scams?

Nicole:

Romance scams have been around for quite some time. They are increasingly popular today. Uh, there's been a pretty significant uptick in both reports of romance, scams, or reports of dollars lost out the door to romance scams. In a typical romance scam, an individual will meet a scammer online through a dating website, social media, a number of different forms. They form a relationship with the scammer, that relationship develops very quickly and eventually they are tricked into sending money to the scammer for various expenses. Be it medical expenses, travel expenses, a number, a number of different items there.

But there's an emotional connection there. There's a willingness and a desire to believe that this is a real person to believe that there's truly a relationship formed. So it's very difficult for those individuals who are targeted and are a scammed to stop giving money. So these scams who actually go on for quite some time, I've read about cases that have gone on for, for years and years of an individual giving money to the same scammer.

Naj:

And of course, because of the pandemic, the incidents of these sorts of things have probably only gone up with people trapped in their homes and looking for connections online.

Nicole:

Absolutely. There's uh, the Federal Trade Commission actually reported a 50% increase in dollars lost to romance scams between 2019 and 2020 for exactly the reasons you said: more time at home, more time alone, more time online trying to form connections.

Naj:

So the last one that you mentioned was trusted individual scams. What are those?

Nicole:

Trusted individual scams. So the topics we talked about before – advanced pay scams romance scams – those deal with individuals that the target doesn't know. There is a subset of scams that deal with individuals is the target does know. Unfortunately, the most common victims of these are tend to be seniors and elder individuals. They may be targeted by a caregiver, uh, their power of attorney, even a relative or someone who lives with them. And these are cases where an individual will come into, uh, a target’s life and really convince them to either write checks directly to them, convince them to change their beneficiaries, take advantage of them in a number of different situations to gain access to their assets.

Naj:

So with these trusted individual scams, it would seem like it's really hard to protect yourself from them, given that you're dealing with people you trust. So, do you have any advice for our listeners on how they can protect themselves from this sort of scam?

Nicole:

So one thing that you can do when you're looking at ways to protect yourself from trusting in, from a trusted individual of taking advantage of you is to really set everything up in a way that has more checks and balances. So instead of naming one trusted individual, perhaps you name multiple, and you allow those multiple individuals to have oversight over finances, over financial activity. That way, if something looks a little fishy, if something's off, one of those people will likely, uh, notice that. And it also holds the others accountable.

Always a good idea to also provide your financial institutions, whether that be your bank, your investment manager, whoever that might be with the names of those trusted individuals and whoever else you want to have access so they could reach out in emergency situations.

And the last thing I'll say on this front, probably the best and most important thing you can do is just to plan ahead, have those just-in-case conversations with family or close friends, they can be challenging conversations. They can be difficult to have, but getting a plan and place ahead of time can be really, really crucial to protecting yourself in the long run.

Naj:

What are some other tips that—specifically around this idea of staying safe online—because so many financial scams and fraud, not all of them, but so many of them are perpetrated online.

Nicole:

Absolutely. I'd say the number one thing that anyone can do, and this is a broad statement, but just be skeptical. Often know that there are a number of individuals out there who are trying to gain access to your personal information in a number of different ways. So don't click on suspicious links. If there are popups, don't click on those. Don't provide your personal information.

Um, do your research when you're getting acquainted with a new organization. There are a ton of resources out there, which you can refer or to, if you're thinking about, if you've been approached by some sort of business that they're wanting to solicit your business, you know, look them up with a Better Business Bureau. There are a ton of different things you can do to confirm the legitimacy of these companies. Uh, and unfortunately, online, it's all too easy these days for scammers to create falsified websites, which actually look pretty realistic. So even if a company does have a website, that doesn't necessarily guarantee it's a legitimate business.

Other things that you should be looking out for online are spelling and grammatical errors. Those are really telltale signs of a scam.

Naj:

Scammers just have not figured out how to use spell check, huh?

Nicole:

Absolutely not. And I did read one article recently, however, where scammers actually intentionally, sometimes will put in grammatical or spelling errors. Because it weeds out people who are taking a closer look at their website. Kind of files it down to people who are going quickly through this, and therefore might be more susceptible to falling prey for the whole scam.

Naj:

So what are some people or organizations that can help our listeners navigate through all of the scams that are happening in the country, or the world today?

Nicole:

I think the number one resource that I use when researching scams is the Federal Trade Commission. Uh, you can not only read a bunch of really educational articles about various types of scams on the Federal Trade Commission [website]. You can also actually report fraud on their website. And they create a number of research studies every or year to track that information.

Uh, the FBI is another great resource, as well as local authorities. If you are involved in a scam or think you might be, we can always reach—you can always reach out to one of those local law enforcement agencies. Research on the FBI website. See if there are any similar scams. That's one great thing to do if you do have that gut feeling where something might be off is do a little bit of research online. See if anyone's had a similar experience, people post about this stuff very regularly, especially when they do discover that they are the victim of a scam. So you can find similar cases to yours that help shed some light on the situation that you're currently in.

Aside for that, I, as I mentioned before, the, the Better Business Bureau. When you're working with any new company or organization, you should always look them up on the Better Business Bureau to confirm. And you know, credit reporting and credit monitoring sites are great to use as well. If you have any indication or, or worries about any type of identity theft.

Another important resource is every individual really should be able to lean on a trusted financial advisor for support. Uh, for example, here at Fisher investments, all of our clients have a dedicated Investment Counselor and these investment counselors are trained to identify suspicious activity and our clients are encouraged to report any potential scams or suspicious activity to our investment counselors.

They're able to do a deep-dive situation, share an objective opinion, look out for red flags, uh, and hopefully save a number of individuals from falling prey to a number of these scams.

Naj:

Nicole, thank you so much for spending some time and sharing your expertise with our listeners today.

Nicole:

Thank you so much for having me, Naj. It's been a pleasure.

[TRANSITION MUSIC]

Naj Srinivas:

That was our interview with Nicole Haseltine of Fisher Investments’ US Private Client Group, taking about protecting yourself and your family from financial scams and fraud. A very big thank you to Nicole for joining us, spending some time, and sharing her insights.

If you want to learn more about the topics we discussed today, you can visit the episode page on our website—fisherinvestments.com. You’ll find a link in the show description.

On the episode page, we’ve also placed some additional resources and tools and links that you can use to read up more or learn more about this important topic.

While you’re there, check out the MarketMinder section of our website, where we post all of our latest capital markets insights. It’s a great place to check in regularly for our most recent thoughts on markets and current events.

You can also subscribe to the MarketMinder Weekly Digest, which will be sent to you every single week—as the name implies. So those insights ready in your inbox.

And if you have questions about investing or capital markets that we can cover in a future episode of Market Insights, email us at marketinsights@fi.com.

We’ll answer as many questions as we can in an upcoming episode.

Join us for our next episode. Until then, I’m Naj Srinivas. Be well and stay safe.

Disclosure:

Investing in securities involves the risk of loss. Past performance is no guarantee of future returns. The content of this podcast represents the opinions and viewpoints of Fisher Investments, and should not be regarded as personal investment advice. No assurances are made we will continue to hold these views, which may change at any time based on new information, analysis or reconsideration. Copyright Fisher Investments, 2022.