Common Scams and Frauds [Webinar]

Speaker 1 – Sheena (00:00:00):
I’m Sheena. Thanks so much for joining. My sister Krista is here as well. She really introduced us to this type of presentation brought on by the Wisconsin Bureau of Consumer Protection. We’re really grateful to have Michael Domke here. He’s going to be sharing all the great information that he has regarding common scams and frauds. Certainly there is a lot of that going on out there and I think our best chance at trying to avoid some of these scams and falling victim is through information. Michael’s going to dive into the presentation. Just a couple of housekeeping items here before we get started. This presentation is being recorded, we will share it after the fact as a resource for you or anyone who could not attend live.

I do have some post presentation resources that Michael shared with me, some spec sheet on tips to avoid fraud, imposter scams, and a consumer guide. We’ll be emailing those out as well, so keep an eye out in your email. Finally at the end of the presentation there is a really quick, couple of question survey if everyone wouldn’t mind participating in that at the end before you jump off of here. So with all of that being said, I am going to turn off my camera and be very attentive to everything Michael has to say. Michael, I’ll give you the floor and welcome. Thank you.

Speaker 2 – Krista (00:02:00):
Can I chime in Sheena real quick?

Speaker 1 (00:02:01):
Yeah, absolutely.

Speaker 2 (00:02:02):
The only thing I wanted to say is I’ve seen this presentation twice and it’s wonderful. Like Sheena said, I first went and saw it in Janesville. It was being presented and I thought immediately of our client base, especially because I just wanted to let everybody know that we did have a situation with somebody that I work with. It really kind of bothered me that we couldn’t get in front of it a little bit because at the end of the day they were scammed, there was a large amount of money involved, and we got involved a little bit late to be able to help them.

Anyway, I just want to say that Michael’s going to present a lot of really great information and you’re going to probably think to yourself like, oh, well I would never do that, or, oh, well that’s obvious – you would never respond to that. But you have to understand and put yourself in the situation where things happen very quickly and these scammers are really good at creating immediate fear and you respond quickly to fear without necessarily being able to rationalize anything. So really try to listen to the presentation from a very humbling perspective. Hopefully you can get a lot of really great takeaways from all the examples Michael’s going to give because like I said, I’ve heard it a few times now and so often it’s like this seems obvious, like a no-brainer. We’ve heard all these stories, but you have to remember in the circumstances that these scammers put you in, you are very much in a reactive mode and so it happens very quickly. So we’re all just super susceptible to it and I’m so thankful that Michael agreed to be here. And so Michael, thank you and take it away.

Speaker 3 – Michael(00:03:56):
Before I share my screen, if I could just add a little dialogue to what you two just mentioned because you said two things that were absolutely perfect and they fall in line with what we’re trying to do.

The first is that we like to say that the consumer is the first line of defense and we’re the second. It sounds like a cheesy tagline, but it really is true because they don’t get to us until it’s happened, or it’s been attempted, or it’s out there. And so the more awareness that we can bring through things like this is a better opportunity to actually put the scammers out of business. We’re going to see as we talk through, these are happening by the millions, sometimes the billions in attempts. The only way to really successfully stop them is to not engage and be able to prevent them from being victimized so that not only are all of us here today learning this information, but it’s also sharing it.

We can only get in front of so many faces. So we always like to ask, if there’s an opportunity when you’re sitting around dinner sitting with friends or having coffee to mention one or two things on what you learned or what really stuck out to you. Those one or two things are still one or two more things that maybe they didn’t know and helps us share the words to put the scammers out of business. The other is, you mentioned the victim shaming, and we do call it victim shaming. It’s something that this year, I personally tired, along with the agency, and certainly consumer protection to make a vested effort because we see so many scams, examples of complaints, and victims that come through here. I would find even myself saying, how did you not see these red flags?

But you said perfectly, I wasn’t there and I wasn’t as emotionally invested that they were. So some of these things that we’ll talk about, you might think, well, it’s so incredibly obvious, but what we’re seeing is that they’re being mixed with other elements of other scams. So while we’re going to talk about the basics and the core foundation of how those scam work and what to look for, but because we’re doing things like this, and there’s so much more awareness, the scammers have to get a little bit more savvy and they’re adding different twists and turns or they’re stacking different types of scams. So it does become very, very difficult to see them, and the more complexity that they’re putting into those, the more awareness we want to bring. But some of them, even having done this for a few years and having spent my entire life in law enforcement and things like that, I look at them and say, even with a trained eye, it’s hard to pick them out, so anyone truly can be a victim and we’ve seen the most educated individuals, and even ones that work in this industry be victimized.

With that, I’ll get off my soapbox and get back into the presentation mode here.

Speaker 3 (00:07:06):
So let’s talk about how much fraud and scams are actually happening, and what they’re costing. You’ll see that this data is from 2022 and it’s showing, kind of highlighting, some of the big categories and areas of where just the FTC was learning about and where it was reported – those are identity theft, imposter scams, and then the abuse to credit bureaus, which really is tied to number 1 and number 2. We’ll say 2.4 million fraud reports – I throw this data up because this number continues to go up and up and up and up, and when 2023 data comes out, I would bet the absolute pink slip to the vehicle and the mortgage that this is going to be higher. The real number down there on the bottom is $8.8 billion. That number will also continue to rise because we’re seeing different types of scams targeting different types of audiences for different types of reasons.

scam reports

Let’s talk about some of those.


What Group are Scams Targeting Most Frequently?

The first is who is being targeted and who’s actually being victimized? Statistics show that younger people have reported losing more money to fraud than older generations, and there’s a reason for that. It is because the younger people have more opportunity to be victimized in today’s digital world, as they’re often going to have a profile on multiple platforms. They’re engaging with multiple people digitally, so that gives them a higher likelihood of being exposed to one of the scans. It also increases the frequency, and the scams that are targeting them are doing kind of what we would call a snatch and grab. They’re going in, and what they’re trying to get is that quick steal, whatever it is that they can get out of them, and then they’re moving on to the next person.

What Group is Losing the Most Money to Scams?

Conversely, when we look at the actual overall loss, the older generations are losing more money, sometimes two to three times as much. The reason for that is because oftentimes they have more money, and so the scammers will use different types of scams based on which generation they’re targeting and how much wealth they think they can actually pull out of them. You’ll see that what we historically would know as the “long cons,” are often targeted towards the senior generations because they’re going to have the ability to get more money, more bang for their buck, out of the time they’re spending trying to put those scams together. We’re seeing this disparity between who’s losing more often, and who’s losing the most.

Common Scams

Types of scams

Text Messages

Text messages account for the highest overall loss, but they also have the highest number of reports.

The reason for this is that sending text messages with computers, and allowing them to be automated, is very, very easy. It also doesn’t require anyone to engage immediately with that back and forth.

These text messages are that first shot across the bow, trying to elicit a response back. With a phone call there does have to be someone on the other end of the line. Well historically I would say “someone” but we’ve learned to understand that it doesn’t necessarily have to be a human being anymore.

Emails are a way of life, but we’re starting to see those kind of taper off a little bit as text messages become the clear preferred way to communicate – outside of I think a professional business setting where emails still play a large role.

Social Media

You’ll see number five is social media. I would predict, if you to look in my crystal ball, that social media will continue to see crime. The reason for that is it’s becoming the preferred way of communication for a lot of the younger generations, where texting isn’t even really a theme for them, it’s all social media. As new platforms pop up and become popular, everyone’s going to want to have a profile and a presence on that new platform, which means that’s another whole opportunity for scammers to try and exploit in that arena.

Types of Scams


1. Phone

The thing we like to highlight here is we know that getting these scam phone calls and those annoying constant telemarketing – potential spam – popping up on our phones every day has, for the most part, become a way of life. We at the agency here, along with FTC nationwide, have seen the number of reports and complaints about telemarketing and scam calls continue to decline. I think there’s two reasons for that. One might be that in reality the efforts being made by the state and federal governments to combat this is working. The other is people might just get sick of reporting it because it continues to happen. So what we want to point out is something really important called spoofing, a goofy word, but what it means is, it’s the ability to mask the phone number that’s actually being called from.

a. Spoofing

So with the advent of caller ID, it was a fantastic tool because we didn’t have to be nervous about answering the phone and coming up with an excuse on how we didn’t want to talk to someone. We could just look at it and say, “Nope”, I don’t want to answer that one. Or on the other side, we would know who’s calling and we were excited to talk to them. With spoofing, I don’t think it’s a stretch to say that caller ID has become obsolete and you really can’t trust it. In fact it’s become counterproductive and it’s actually a tool to the scammers advantage because it’s adding what appears to be legitimacy to these scams when they call you. We’ll talk about a little bit of utility scam.

So what they’ll do is they’ll mask that to have the name of the utility company and the real phone number of the utility company show up on your phone. So when they’re saying that you’re dealing with utility company, and the phone number/name matches, it gets your brain thinking, well, this might be legitimate or at a minimum it causes you to pause.

The other is it’s masking phone numbers that may be friends of yours or contacts or colleagues and you think that they’re calling you and so you’ll answer that. You’ll get engaged in a conversation and even in those few seconds or minutes might give away information you didn’t really want to, had you known that that wasn’t who you were talking to.

b. Robocalls

Robocalls, these are the computer generated phone calls that get sent out, oftentimes by the millions, and they’re also oftentimes automated messages. What we want you to do is just not engage with these. Our constant theme is just hang up. These message will eventually lead you to act – press one to continue, or respond to “can you hear me? Can you hear me?”, or there will be a long pause and then you actually say “hello.” All of those are attempts to verify a live number. They want to see which phone numbers have a live person that will actually answer the call. They may not engage in a scam right away, but they start to build that list that shows, okay, we know this is a number that can be used. A lot of these scammers just use that and then sell those lists to other more nefarious actors who will say, okay, now I really want to go after the scam here. Our advice is always don’t press the button, don’t engage if there’s that long silence, just hang up. If they say, can you hear me? Just hang up.

Also, a quick pitch to the do not call list. There is an opportunity to reduce the number of calls if your phone number is not on the do not call list, the resources that will be shared will all have information on how you can add your phone number to the registry. It’s very, very easy to do. It’s a lifetime registration. You just have to make sure you’re calling from the phone number that you want added. One exception we want to talk about here in 2024 is if your number is on that list, or you add your number, what that does is it prohibits registered and legal telemarketers from calling you to try and sell you a good or service. In Wisconsin those telemarketers are required to register, but they’re also required to scrub their phone list to make sure they’re not calling anyone who said that they don’t want to be contacted. There are a couple exceptions, and one big one I want to point out is charities, and another is political action committees. Those two organizations and types of organizations are exempt from the do not call list. So 2024 being an election year, we all know we’re going to get bombarded with these phone calls. It probably started already. Please recognize if you’re on that list and you’re getting those, it may be annoying, but legally they can do that.

c. Text Messages

We talked about texts being the number one way that victims are falling for these scams and that’s because they can be sent in so many different variations and very, very cheaply. The thing we like to highlight when you’re getting these texts or emails, is most importantly, the malicious links. You’ll hear me say it a couple of times throughout the presentation, please never click on a link from an unsolicited text message. You always want to control the flow of communication. You want to be the one that’s reaching out to verify anything. If and whenever that messaging says there’s a link to quickly go there, don’t use the link, go to the website, verify the information yourself, go to the source. Those malicious links oftentimes can either redirect you to a website that may look like what you think it should, when in reality it’s not that site, or they’re going to install some type of malicious software such as ransomware or malware that is going to cause secondary problems.

d. Hacked Accounts

The other is hacked accounts and hacked accounts will tie you with phone numbers. So if by chance your phone or computer gets hacked and they get access to your contact list, what we see happen is they will send out a message, text or an email, to all of the contacts. Oftentimes it is a request for money and it has some type of sympathetic situation where they say they’re really embarrassed that they just need maybe $50, a hundred dollars to get them through the next month. They promise they’ll pay them back, but please don’t tell anyone because they’re really embarrassed and it’s shameful and it took a lot to send that. Then of course they play to that sympathetic end on the recipient who says, sure, I want to help Michael out. He’s always been a good friend. They’ll send that money and then after a couple months they may be out of pure curiosity or actually caring about them ask, “Hey, did you get that situation resolved?”

Of course I would say, “I don’t know what you’re talking about.”

“What about the hundred dollars I sent you?”

“You didn’t send me a hundred dollars.

“Well sure I did. You sent me a text about it” and then all of a sudden you realize that your entire network’s been compromised and you don’t even know how many people sent money. We see this happening more often than we’d like.

2. Social Media

You’ll see a couple examples here. We see an increased volume of these around the holidays when we’re giving away gift cards, giving away shopping sprees, all of these solicitations for information. A good example up there a post, where it’s, “Hey, I took this survey” or “I did X, Y, Z and I got this gift card. It’s legitimate, but you have to do it right now by clicking on this link,” and then you click on that link and a couple things could happen – it might take you to some malicious software, or it’ll say, “enter your information to win.”

Well, now you’re voluntarily giving away that information and that’s the whole purpose – they want to get you to enter, and you don’t actually know who really won and who didn’t. Then they’re just cultivating either a profile about you, or they’re building a database that they can use down the road, or potentially sell that information. So we really want to bring awareness to these types of scenarios where all this money’s being given away and it seems a little bit too easy if it seems that way. It most likely is, and there’s something malicious going on behind the scenes.

3. Government Imposter Scams

Government imposter scams take on a few different roles, and they actually will have some ebbs and flows based on the time of year.

a. Social Security

Social security will happen year round, however, a couple years ago there was a pretty dramatic increase in benefits and with that brought also an uptick in the number of scams that we saw occurring because the scammers were taking advantage of the likelihood that a recipient would expect a phone call from the Social Security Administration. They would use a pitch saying, “great news, benefits are increasing. We’re using this as an opportunity to verify your information, but then also to verify your account information to get that money routed to where it’s supposed to be. Because we’re giving away now so much more money, the Federal government says we need to do an audit and verify it. Could you please tell us X, Y, Z?”

Of course you never want to do that. We also don’t want to get into the mindset that the only thing that’s important is our social security number. That is not true. There are at least a dozen different elements of your identity, name, address, birthday or social security number, some pin numbers and some Medicare numbers. All of these are very important and useful to them, so don’t get yourself in the mindset that well, as long as I don’t give away my SSN, I’m okay – not true.

b. IRS

Another one is the IRS. We’re coming up into tax season. We’ll see that with the IRS, what will happen is these scammers call and they will purport to say that you have a delinquency in your taxes, and that you owe, and if you don’t pay immediately, there’s going to be a tax warrant issued. Then of course what will happen is they say, well, you need to pay us in some obscure method.

It used to be wiring money, then it changed to gift cards and we still see gift cards being an often used form of payment, but then now cryptocurrency has also really taken a larger role. A lot of us as we talked early would say, well, I can’t imagine that the IRS would ever demand payment in a gift card, which very well may be true, but the scammers say, well, we are a forward thinking agency, we’re getting into cryptocurrency. The federal government believes this is the way, and so if you pay us through cryptocurrency, maybe you’ll get a discount or you pay early, but it’s that constant threat that if you don’t do this immediately bad things are going to happen.

c. Medicare

With Medicare, we don’t see as many situations where a threat is being pod as much as it’s an attempt to solicit personal information, the banking information or your actual Medicare or Medicaid ID number.

That’s very, very important and valuable to them. And so they’ll call and say, “Hey, we need you to renew this information.” Where this happens a lot is around every October when you have open enrollments. So recipients truly do need to go in and verify which programs they want to participate in, they want to renew, and so it’s not completely unexpected that they would say Medicare might call to do these for me, or a organization that works with Medicare Medicaid recipients to make that process easier and help them along. What we want you to do is control that flow of communication.

As you’ll see throughout all of these, if Medicare is calling you or the IRS is calling you or Social Security administration is calling you, they should have your information. So we don’t want you to answer their questions. If you want to validate whether it’s a real call, ask them to tell you what their system shows, ask them what your address appears to be, ask them what your routing number is.

If they truly were from one of these organizations, which none them will be, they would have that and be able to provide it. Once they tell you, well, we can’t do that, we don’t have that. It’s a scam call. It’s also a scam call because none of those federal or state agencies are going to call you and ask you for that information over the phone. They’re just going to send you a letter.

4. Law Enforcement Scams

The law enforcement one is one that we have seen here in Wisconsin a lot, and this takes two different approaches. The first is they’re going to call and say that there’s a warrant for your arrest and if you don’t pay it immediately, they’re doing a roundup – sending out squads and trucks unless you wire money, send us gift cards, or send us cryptocurrency. Or, they might give you a website address and say you can go ahead and pay on our portal, then we’ll go ahead and quash the warrant.

Otherwise, you’re getting picked up, you’re going to come down here. Processing is going to take at least a day., so you’ll sit overnight. All these things are to cause you to get that emotional reaction of saying, I don’t want to go to jail. Now of course you’re also going to pause and be like, wait a second, I’ve never been arrested, I’ve never been pulled over, I’ve never been in trouble. There’s no way I could have a warrant. So that one might not be necessarily successful.

So what they do also on the second approach is they’ll call and say, you had a jury summons, you missed it. You didn’t show up for jury duty and so now there is a warrant for contempt of court issued for you. Now, this is something that any of us might cause us to pause. Well, I don’t remember getting it, but it’s feasible that it got missed in the mail.

Maybe it got put in a different mailbox, maybe it just got lost in transit. And so you’re thinking, boy, it’s very possible that I missed jury duty. We know jury duty happens. We know that if you don’t go to jury duty that you can have a warrant issue for contempt. So that causes a wider range of general population to say, okay, this might actually be me, and then they take the same approach – “if you pay us right now, we’ll squash it. You won’t have an issue.”

I can definitively tell you with absolute confidence from my former life, law enforcement is never ever going to call you ahead of time and say, “Hey, just so you know, we’re coming to get you.” They’re just going to show up. They’re going to take you away if you actually have a warrant. So please don’t fall for any of these scams. If you do think that maybe you did miss a jury summons, just call the clerk of courts. They’ll verify whether that’s true or not and I’m going to bet that 99% of the time it’s not true.

5. Utility Scams

The utility scam – this one we see year round of course. In winter here in Wisconsin, we see a little bit of a rise and that is because it gets very, very cold and we’re very dependent on our propane or electric city for the heat. And what’ll happen is the scammer will call and say “You’re delinquent on your bill and we’ve got crews out in the area that are going to turn off service. Just so you know, this is probably going to take about a week and there’s $150 reconnection fee. But if you pay us right now, in one of those three forms of payment, we’ll go ahead and we’ll avoid that”.

The other, what they’ll do if that doesn’t work, they’ll want to say, “Hey, but you know what we can do? We can put you into a program. We understand that situations happen, just go ahead and verify some information for us.” I’ll get you enrolled – personal information, banking information – all those things to help calm and ease the mind. But what they want you to do is they want you to continually be thinking about, alright, what’s going to happen if this doesn’t go right? What happens if I don’t do this? What if it really isn’t a scam and I was wrong and they shut it off? We talk about how anyone can be victimized. I like to take a quick minute here to talk and give an example of how that really can happen. Even the most aware, educated individuals.

We work very closely with local law enforcement agencies throughout the state to share our information and help them bring awareness to their communities about what’s going on. And so we had a community police officer in the city of Milwaukee who was out in the community sharing information, sharing resources, who was very well acquainted with this type of scam and many others. He got home from work, walked into the kitchen. He was standing there, with two little ones running around causing chaos like they do, and happens to get a phone call. The phone call says, you’re two months behind, because we’re coming up into the winter season when there’s a moratorium on shutting off service we’re going through and making a quick roundup to collect what’s owed. And she says, “I’ve been paying my bills, I’ve been mailing them in.”

“Well, they didn’t get to us. If you pay us immediately, we won’t shut it off and we have trucks in the area going through.”

Well, it just so happened that as she looked at her kitchen window while talking, a utility truck drove down the street – pure coincidence – but that one coincidence was enough to in her mind that this must be legitimate, this must be real. She ended up paying $1,030 to the scammer. No one was as well informed as she was, but it just speaks to once you get into the moment, you don’t hear what’s happening. You’ve got little kids running around, you know that they need heat, you know that they can’t go without the power for school and everything else happening, and then you go ahead and you convince yourself that it’s real and you want to fix the problem immediately.

6. Tech Support Scams

Tech support, I really want to point out what we highlight and we continue to see is these tech support popup windows. This one we see targeting, oftentimes probably the 50 and older demographic. Popup windows were something that when the internet kicked off and computers really, really got rolling in the late eighties, early nineties with our antivirus and with the operating software, we were seeing popups all the time. That was the mechanism really of communication and advertising, but we still see it. How these though are being tailored is they’re saying that you have a security alert on your computer from what appears to be a software or antivirus provider that you use. It says, “Hey, there’s something wrong and you need to either click on this link or you need to call his phone number for us to fix it.”

When you click on the link, you might all of a sudden become victim and realize that there’s some malware or ransomware being installed, or you call a phone number and they say, “Hey, we purport to be Microsoft Assistance, what we want to do is, in order for us to make sure that nothing else was infected and that your computer’s operating the way it should be, we want to remote in. And by remoting in, that means that you give them access and they can come in through the internet connection and they start moving around in your computer. It appears that they’re checking things and it looks fancy, but in reality sometimes they’re either installing a virus or they’re giving themselves access to a lot of other information such as websites, passwords, bank accounts, pictures, things you have saved that you’re not even aware of. Then once they’re out, what they’ll do is they’ll reach back out and say, “well, just so you know…, this is what I did.” You’ll know that its been a scam, and then they’re going to demand money.

They’re either going to lock you out of your computer and say, if you don’t pay, we will lock it. Or sometimes they’ll just steal the information. Sometimes they’ll just wreck the computer just out of pure malice.

The other option is they’ll say, we purport to be some type of third party company who can fix this for you, but you know what, this was really bad. You’re really going to want this protection. Sign up and we’ll give you the preferred service and guarantee that this will never happen again. And in reality, there probably wasn’t anything wrong to start with and now you’re paying oftentimes far, far more than what a normal subscription would be. In response to any of these, all we want you to do is not engage or react to that popup. We want you to again, control the flow of communication, reach out to Microsoft, contact Norton directly, whoever it is that that alert came from, don’t engage. Find a trusted source to communicate with, then just say, this is what I got, is this legitimate? You’ll see, most times it was not.

7. Romance Scams

We are doing a big push for this in our outreach this month because Valentine’s Day is right around the corner, and with that brings a new opportunity for scammers to really hit the social media aspect of these hard. Online dating and relationships have become a normal accepted way of life and there are multiple platforms in which this is being done, and so the scammers are taking advantage of that. We used to suggest, “look at the image that’s being used,” and we would encourage individuals to do a quick reverse search on that image, meaning you copy it, you throw it into a search engine, and what we wanted to do was look and see if that photo showed up on different websites with different names.

So if you were talking to someone named Michael and all of a sudden you do that search and you realize that Michael shows up with a name of Bob here and Frank here and Randy here, that’s a red flag. What happens is these scammers just steal pictures, they steal profiles from other websites and then they throw them on a different platform and they use those and pretend to be that person. I will say that AI has changed that up a little bit and has made it more difficult to detect. At the end of this presentation we’ll talk about the impact that AI is having on several of these scams, and this is one of them, but traditionally what will happen is right away they’re going to profess their love within the first week or two weeks, and that is them trying to sink that hook. Maybe he/she will try to get engaged, get you locked in, get you committed to the communication and the relationship.

Now, they’ll always come up with excuses on how they can refuse to meet face to face and before the popularity of Zoom and video calling and FaceTime and Teams and all that stuff, this was a little bit more of a red flag, or I should say it probably is more of a red flag now that we have the ability to communicate on screen. If they’re telling you that they have the inability to even have a video call, that is a huge red flag. Before the video calls, it was a little bit more of they would have excuses where I have to leave for a little bit. I’m sorry that I’ll be gone for a couple weeks and then they’ll always be asking for money. They will have excuses like – I had a family emergency, I don’t have enough money to fly and come see you. I personally had a medical emergency and all these hospital bills and I had to stay here and get a second job. Multiple excuses on why you can’t see them and why they can’t meet face-to-face, which of course would validate that it’s a scam and they’re not a real person.

We have a quick bullet about serving overseas – that’s because the military community is highly targeted with this particular scam (scammers pose as military personal) for a couple of reasons. One, because it offers the scammer a little bit more credibility on why some of these excuses very well may be legitimate. If you’re deployed overseas and you’re doing things, it’s very possible that you can’t meet face-to-face because you’re going to be gone for unknown amount of time. Or you set a date, say, we’re going to talk on Tuesday at noon, and then course you don’t make that call and you reach back out later and say, sorry, something came up, we had to go take care of it, can we schedule another time?

Secondly, the inability to just up and leave from a deployment It doesn’t work that way, and so that creates a little bit more legitimacy to why they can’t see them. However they’ll continue to ask for money – I’m in the service, I don’t make a lot of money, we’re over here deployed, I sure could use a care package or gift package, if you could send me some gift cards that I could use to help out with whatever it is I need. That’s how they start to suck the money out.

8. Lottery Scams

We’re all so familiar with Publishers Clearinghouse. Unfortunately, Ed McMahon just doesn’t show up at the door anymore with that million dollar check and all of the glitz and glamor. Now, all of this has really gone digital, but Publishers Clearinghouse still is a very, very big promotion and there are many, many others that mirror that same approach. However, what they do is, the key to to it is, when you win a prize, these scammers will purport to be Publishers Clearinghouse and tell you, well, congratulations you won a new boat, but you’re going to have to pay us for the shipping and the taxes and the insurance to get it there. That amount is oftentimes a fraction of the value of that particular prize, so a lot of victims will say, well, it makes sense if I pay $5,000 to get this boat here, I can sell it for $40,000.

That’s still a huge net gain on $5,000 for a brand new boat. What a deal. Of course when that happens and you pay that shipping and then the boat doesn’t come, you either don’t have any more contact with them, or they’ll continue to that there’s another fee – so thanks for taking care of the shipping and the taxes, now we need you to pay this additional processing fee. They’ll do the same thing with a cash prize. If you win $10,000, they’ll say, just so you know, the Department of Revenue in Wisconsin requires that we take 33%, or that there’s 33% luxury tax on it, and so please pay us that 33% in advance. The victim’s response is, “well just take out that $10,000 and send me the difference,” and the scammer will always respond with “that isn’t the way it works. State and federal law prohibits that.” All of this is garbage. None of this is true in Wisconsin. You don’t have to pay a dime for a prize that you legitimately won, absolutely nothing. So if you are being asked to pay anything at any point, it’s a scam.

Now, lets talk about foreign lotteries. These scams have been going on for decades and decades – there used to be the foreign lotteries where a certain individual in a different country won a bunch of money and they want you to have of it to help them get to America. Please understand that first, you can’t win a lottery that you didn’t enter, and second, it is illegal to win a foreign lottery in the United States, so even if by some crazy chance you’re on vacation, you entered a lottery and you did win, it’s illegal for you to claim those winnings, so even if you won, you lost.

9. Grandparent Scam

The grandparent scam is one that we’re also starting to label the family scam a little bit, and that is because it’s not necessarily just targeting the grandparents. There are different variations in that because as we do things like this and bring more awareness, those generations are far more aware of what’s happening and they know what to look for. But historically, what will happen is that the individual, the family member, will call and say they’ve either been arrested or they were involved in a crash. In the past it almost always involved a broken nose, and the reason for that broken nose is it was an excuse to explain why the voice was different, why the voice was nasally, why Michael was calling, but it didn’t sound like Michael. What they’ll want to do is they’ll say, “Hey, grandma, it’s me,” and then grandma of course says, “Michael?” – well that’s one step right there.

Now they’ve realized who it is – what name to use – and then they go ahead with a story. There’s a hundred different variations on what story they’re going to give. With social media, it’s made it a lot easier to come up with what that story needs to be, because a lot of the younger generations like to showcase what they’re doing. This isn’t the, I guess it is a little bit,  a take on the classic, don’t post that you’re going away for seven days because then they can come rob your house and so on. Things are a little bit more complex than that. Now, even if you make mention that you’re going somewhere, or who you’re with, or what your friend circle is, or where you go to school, or when their spring break is – none of even has to be saying, okay, here’s the date and time of where it is.

Just those little pieces of information are enough for a scammer to put together a story and if grandma isn’t talking to Michael every single day, she may not know who he’s with but may recognize a couple of those little details that make it seem real and always what they’ll say is, please don’t tell anyone else. I’m really embarrassed. Mom and dad are going to be really angry. They’re never going to let me go on spring break again. They’re never going to let me do this. It’s going to break their trust. They might make me come home and of course the grandparents say, I understand, yep, that’s probably what’s going to happen. I want to help and they’ll help.

The other two sides of it we’ll see are someone’s calling and they’re purporting to be either a police officer or a lawyer and the police officer will say, Hey, Michael got into a little bit of trouble and he’s here at the police station. He seems like a really good kid. This is actually a pretty rough jail. He asked if I’d give a call. I said I would because I don’t want him to spend too much time in here. He is probably going to be a little bit emotionally distraught if he spends more than a night in here, so I’m sharing with you – here’s a portal on how you can pay the bail or if you just want to, we’re a forward-thinking agency, so if you want to wire some money or send some cryptocurrency, this is how we can get out.

Same thing with a lawyer. The lawyer will say, I was here with another client. I was walking by and I saw your grandson sitting in the cell. He asked if I would make a quick phone call. I’ll be honest, this isn’t something I normally do, but if you just want to send me $500, I’ve got to come back and get my client out anyways, so I’ll take care of your grandson. Of course everyone wants to help make sure he gets out.

One tip we have to try and combat this is having a family password – making it extremely unique. An added layer of protection is adding a family phrase, just whether something that’s well known throughout the family so that when that call potentially does come in, you can say, well, I really want to help out. Just remind me again what our family phrase is, and if they truly are in trouble and they do need help, hopefully they remember that we’ll know that it’s real.

10. Check Overpayment Scams

Check overpayment, scams have been around for a long time and they continue to be successful.

Where this works a lot is when you’re selling things, oftentimes through an online marketplace, and it doesn’t just have to be a private to private. It could be that you think you’re buying something from a business, or selling something to a business, and then they send you what appears to be a business check and they tell you, “Oh, I’m sorry, I screwed up, we sent you too much money. Could you please just send us the balance back, that was our fault?” Or there’ll be a sympathy story – “I really screwed this up. It’s my second week. If you could just keep this between us because if they find out that I messed up in my first two weeks, I’m going to get fired.” The third is they’ll tell you, “Hey, I recognize it’s an inconvenience for you to have to send us a check and go to the post office, so go ahead and keep $50 for yourself and then please send us the rest you can as soon as possible.”

The key is the soon as possible. They want to get it back because they don’t want to get fired. They need the urgency to get the money back into the account – but what they really want is they want you to send that money before the check clears at your financial institution. Because once that check is deposited and you send money back without it clearing and verifying with the bank that it’s cleared, than that’s truly your money that you’re throwing away. When all of a sudden you realize the check is fake and the bank notifies you that and you say, “Hey, wait a second, then I want my $10,000 back,” they’re not going to give it back to you. If you do think that there may be situations where a human error does happen and the situation might arise, just wait for the check to clear.

Just say, “I understand that you sent me too much, however, I know that there’s a scam called check overpayment. I want to do my due diligence and make sure that I don’t get scammed here. I’m going to wait and if this check actually clears and it’s good, then I’ll send you the difference back.” You’re probably going to find out that it won’t clear.

11. Out of Warranty Scams

This one here, I’m sure just about everyone on this call has either received one of these mailers or they’ve gotten a phone call saying – your auto warranty is about to expire, you absolutely have to renew it, here’s how much money it’s going to cost you. It seems like it’s actually targeting you, or maybe even it mentions a dealership in the local area. Almost all of these are scams and if they’re not a scam, they’re going to offer you coverage that really doesn’t provide anything, or there are so many different hoops that you have to jump through to maintain qualifying for that coverage that they become null and void, oftentimes within months of you actually paying something. What we want to encourage you is if you really want to either extend a warranty that you potentially did buy, or get an extended warranty, just go to a local dealership. I can promise you that every single one of them would love the opportunity to sell you that product.

12. Charity Scams

I don’t want to deter anyone from giving to charity because certainly there’s a huge benefit both the to organization and in our supporting them, but we want you to do your due diligence and make sure you research where your money’s going. First, we talked about earlier, that charities are not covered by the do not call list, so you very well could get calls both from legitimate charities and from scammers. We’ll see them try and target organizations that play to the heartstrings, which local police and fire. This happens all the time and they try to kind of exploit that willingness to support those local services, and it does make it though really difficult to tell the difference because there usually are a live person on these types of charity scams because they want to have that interaction.

What we want you to do is just turn around the flow of communication. If you think you might be legitimate and you think it might be something you’re interested in giving towards, ask some questions. Where are you located? Where are you headquartered? How many people do you have working with you? Where does the money go? How much goes towards the overhead? How much goes to the actual cause? Who’s the CEO? Little questions that if they’re really with that organization, they should know most of the answers too. You can also do your own research or These are two great websites that vet these charities and provide a lot of the information that I just told you about so you can make sure your money goes to where it should be.


13. Student Loan Scams

This is one that we’ve seen ups and downs with, and that’s because with forbearance continuingly being postponed, each one of those postponements was another opportunity for the scammers looking to target student loan holders on this crushing debt that was coming, and for some it might be. What they’re doing is they’re promising and saying, “Hey, we have the solution. We have a great relationship with the Department of Education. We can get your reduced by half if not more.” What they’re asking you for is two things. One, just pay us 10% of what your balance is or a flat fee of $500. We’ll do all the heavy lifting for you and you’ll see a huge, huge reduction in your balance. They’ll also ask you for your federal student aid id, that’s very, very important like your Medicare ID or maybe your social security number, because if they have that and some other easily attainable information about you, that gives them access to the loans where they might actually apply for more and not help you get rid of the ones that you have.


14. Investment Scans

I’m not going to go into all of these because some of them get really detailed. It could take a long time.

Investment scams

The one investment scan that we see tied to a few of the other ones that we’ve mentioned today, really most notably the romance scam, has a rather obnoxious name. It’s called Pig Butchering, and for those who don’t know what pig butchering – how it works in the romance scam is they establish that connection and they say, “we have this promise, this great life together. We want to get a house down in the Florida Keys, and I have a great opportunity in how we can make that fast cash through cryptocurrency. Let’s do a small amount to show that it works.” So they each put a set amount of money in and then the scammer puts their own money in to try and make it look like there’s a profit, and then they just keep doing this, and continue to say, look, it’s working, it’s working, it’s working. Once the victim has put in, sometimes hundreds of thousands of dollars seeing the balance continue to grow in what appears to be a truly, truly profitable investment, then all of a sudden the romance is broken off.

They never hear from them again. Cryptocurrency can’t be recovered and they’ve lost sometimes everything. So what do we want to look out for? First is that demand to pay in these obscure payment methods – wiring, gift cards, money cards, cryptocurrency,  the absolute urgency and the need to verify something that you possess. Again, turn that around. Have them verify to you. They want you to keep it a secret because they don’t want you to ask anybody else or they don’t want you to go research it. Oftentimes you can Google just the highlights of that conversation and you’ll show a scam, scam, scam. Unsolicited phone calls, that’s the key. Unsolicited texts, calls, emails. We don’t want you to responding to anything that you weren’t expecting or don’t understand why it would be sent to you. The government doesn’t call you. The government sends letters, and when things are really, really bad, the government shows up. You never have to pay to claim a prize. We never want you to click on a link that says, Hey, confirm this. Often, we would see this around Christmas with shipping. Hey, there’s an incident with your package. Click on this link to verify your address. Click on this link to verify your account information, anything, all frauds. Then when you start piggybacking, when you made a payment and all of a sudden they come back for more, all kinds of red flags should be going off there.


The Impact of Artificial Intelligence (A.I.)

I like to take a quick minute to talk about how artificial intelligence is changing this and is making it more and more difficult for us to actually make sure we can provide the education on what to look for, because it’s getting harder and harder to figure out what that is. Most notably, we talked about the grandparent scam. We talked about having to have that broken nose, and we also talked in the romance scam with that image. Well, A.I. has made that kind of obsolete. In the grandparent scam it made it obsolete because that broken nose and that excuse isn’t necessary anymore. When we put this slide in about nine months ago, it started with saying it took 20 seconds of audio to mimic a voice. Then about four months ago, we changed that to 10 seconds, and then about a month and a half ago, the FBI has let us know that it takes three seconds of audio to mimic a voice, use AI to recreate that voice in a scam.

Well, almost anything that’s said on social media nowadays is longer than three seconds, so as you can see, it’s very, very easy. So now when you get that phone call from Michael saying, I got in a fight or I was in jail, it actually sounds like Michael. The other part is with this voice coding, and also through chats and communication with A.I. and in conjunction with quantum computing and how fast it can handle everything, we’re starting to see that they can actually respond and have conversations in real time, and so it sounds like it, it reads like it, and it’s even more convincing on what they’re asking and saying to get that hook a little bit deeper. But the last is, to me, the true danger that I’m concerned about is not just how convincing these are, but how much more widespread these scams can be. It’s no longer where you need a one per to one relationship, or I have to call you because I need to be able to react to what you’re saying and how it’s going, and maybe I did my research on the backstory.

Computers can do all of that, making it all that more difficult to figure out and pick out.


The other is we want to talk cryptocurrency. We’ve watched this happen in phases. Cryptocurrency has become the preferred method of payment for scams because it is very difficult to trace and even more difficult to get it back. And how we started seeing this, adding a little bit more element of – oh, this could be real – is these criminals will figure out where these Bitcoin ATMs are and they’ll say, I” need you to just go to your local gas station. It’s right there as you walk in on the left hand side, just go on there and do X, Y, Z.”  Well, if you live that community and you’re familiar with that gas station, you’re like, well, this must be legitimate. They know exactly where this is. That is just one more key, one more variable, making it all that more difficult to figure out what’s real and what’s fake.

We offer some tools you can protect yourself. I won’t get them too much right here, but we just want you to know that there are features on your phone both in the operating software and then also there’s additional apps that can get built in to help you block some of these numbers. Also, calling your phone carrier to say, “Hey, do you have any other additional services?” A lot of them provide them for free to filter out a lot of these junk calls. There are a couple of tools, all of them are free that you can sign up for to make life a little bit calmer for you.

We harped on gift cards throughout the whole presentation. The key here we want to talk about is gift cards are for gifts. You should never ever have to pay for anything with a gift card, much less to a legitimate organization and especially to a government agency, never. What we do want to highlight is something that changed in the past couple of months is if you send a bunch of gift cards or if you potentially buy some gift cards and suddenly the balance is gone within hours, call the gift card company. We found that they see how these are being abused and there is an actual window of opportunity now where they might reimburse you for that money. I can’t say they’ll do it all the time and I don’t blame them for making that window very small because they don’t know what’s real and what’s not. But we have seen in some circumstances where they do return the money, which is the first time we’ve seen it, so we want to make sure you’re aware of it.

Last, we talked and in the open with, please don’t be too ashamed if you do fall victim, to call us. We can’t do anything if we don’t know about it. Law enforcement can’t do anything if they don’t know about it. If you mailed the gift cards, because that was part of the scan – they said mail them here – and you realize a day later, call the post office. Tell them what happened, give them the address of what was mailed, give a description of the envelope. They can pull that out of circulation and they can get that back to you. If it’s larger losses or maybe some identity things, call law enforcement. If anything, just make them aware of what’s happening and there may be something that’s being targeted, that community so that little information makes a difference.

And then also call your financial institution, if you have multiple, make sure they all know because once the identity is compromised or once codes are compromised, if you use similar identifiers or passwords or usernames, there’s a chance that the others will be targeted as well. So put those alerts across and then lastly, tell us. Please let us know. Give us a chance to help fix your identity or get some money back, depending on however you may have been victimized.

And that’s all I have. Thank you for the attending the presentation today. We also, if you or any of your other organizations that you’re tied to would like a presentation, we have a whole catalog of topics, they’re free. And then on left we have social media. I’m not here to garner followers. What I’m here to do is to try and say, we provide updated information as we learn about it so that things are current and trending and they may be in your neighborhood or local community. Once we hear about it, we throw it up on social media. It’s all too easy. Lets you know what’s going on in real time.

Speaker 1 (00:57:35):
Thanks so much, Michael. A lot of very good information here. I had a lot of takeaways too, so it’s good to know all the things we can do proactively. Probably the biggest thing is just to always be aware of what’s going on and be skeptical, right?

Speaker 3 (00:57:56):

Speaker 1 (00:57:57):
Keep your information to yourself unless you know for sure who you’re giving it to.

Speaker 3 (00:58:02):
Great advice.

Speaker 1 (00:58:04):
Michael, we did have one question come in that I just wanted to ask. The question was, why is it illegal to win a foreign lottery? What happens if I buy a lottery ticket in Canada? Are you saying I can’t collect if it’s a winner?

Speaker 3 (00:58:17):
Great question, and thank you for the opportunity to clarify that you can’t play and participate and win a foreign lottery when you are located in the United States. If you were to go and play a foreign lottery in that country and then attempt to claim the prize there, those local laws would apply. And so ours is, if you are playing the Canadian lottery online or through a mail order from the United States, it’s illegal to do that cross border. But if everything takes place in that country, I suspect you would be allowed to win.

Speaker 1 (00:58:50):
Okay, great. Thank you. Just a couple of things because everyone on this call, or most everyone, they’re clients of the firm. And so just in regard to investments, specifically accounts held at Charles Schwab, we do get notified from clients all the time. And so I just want everyone to know if your information or your identity is compromised, it is good practice to let our office know. There are various measures that we can take to either block your account or at least have heightened supervision on your account for suspicious activity. There is a lot coming down the pike for me as the compliance officer of our firm from the SEC regarding cybersecurity and just overall protection of client accounts from scams, frauds, just everything going on right now that could be disruptive to information and our finances. So we do our best around here to protect your assets. That includes things outside of our control and just keep in communication with us if there is anything with your situation that we need to be informed about.

So thank you everyone for joining us today. We’re going to wrap up again. Michael, you did great and appreciate all the information. Thank you.