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Fraud Alert

Fraud Alert

October 04, 2023

It seems the scammers are out in greater force than ever. More alarming is their increasing success in scamming honest people out of their hard-earned money. As a result, I wanted to share with you many True Stories of scams to hopefully protect you from getting lured into their traps.

Nyle told me that scammers are developing new high-tech programs with artificial intelligence (AI) that can accurately duplicate the voices of key people in your life to convince you that they are in trouble and need cash transfers. Amazingly, AI can duplicate all necessary sounds to carry a conversation with just a few words from the individual. My wife has for years told me not to answer the phone with "Yes" because they can record it and use it to approve transfers. The advancement of AI will introduce many new ways to be scammed, and we all need to be very careful whenever it involves our money.

During the days I was working on this Weekly Brief, I received the scam email below. I feature this scam because the process is consistent with many scams. Their objective is to get you to call or click a link. Once you respond, you're in the process of getting scammed.

TRUE STORIES (names withheld to protect the innocent)

UNAUTHORIZED BANK TRANSFER. Bob receives an unsolicited call from his bank, and his phone identifies his bank's name on the caller ID. The caller identifies himself from the bank's fraud department and confirms Bob's identity by asking several questions that Bob thought they should have already known. The caller tells Bob that a fraudulent transaction is about to be processed, transferring $32,000 from his checking account. The bank is experiencing significant fraudulent transactions that day, and Bob needs to go to the bank and wire funds out of his account to a new "bank-protected" account to prevent the funds from being taken. The next day, the bank will transfer the funds back to his account. Bob was also instructed not to tell any bank employees about why he was doing the wire as they suspected that several of the branch employees were involved in an insider scam operation. Bob thought this was particularly odd since he had seen most of the employees for the past several years. Bob, as instructed, goes to the bank and wires the funds to the "protected account," not telling anyone at the bank what he is doing. 

Bob never sees the re-deposit. After a couple of days, Bob goes to the bank to inquire about the deposit, only to learn he was scammed. The bank evidently investigates the fraud and several weeks later reimburses Bob almost all of the funds he wired.

PREVENTATIVE STEPS: Scammers can now "spoof" your phone to list the institution being faked in Caller ID. If you get a call and are told your account has fraud activity, immediately hang up. Call back your bank or financial institution, ideally on a different phone. I was told that scammers have access to your phone line for a short period after you hang up and can re-direct your subsequent call back to them. If you can't use a separate phone, then wait a while before calling your institution. The best follow-up is going in person to your bank to confirm if the situation is legit. Never be lured to transfer funds from one account to another account, and never agree for any reason to open a new account over the phone, especially for the purpose of transferring funds into it. This is also true for callers stating they have an IRS penalty tax due that needs to be paid to avoid more penalties or, worse, jail. 


Helen receives a call from her bank, which is displayed on her phone in caller ID. The caller tells Helen that fraudulent transactions are being placed that morning, transferring funds from her bank account to her Zelle account, which will then be transferred out to a fraudulent account. Helen is not familiar with Zelle but does have a Zelle account and has used it in the past. Caller confirms her identity and tells her he is transferring her to the "Zelle Fraud" department. After the transfer, the caller instructs Helen to log into her Zelle account to enter specific codes in the dollar amount section that will cancel the transactions. The codes all started with "000" followed by five other numbers. The first code was 00099826. The caller said the code did not work and gave her another code. 

Meanwhile, Helen used her computer to log online into her bank account and noticed immediately that $998.26 was transferred out of her account. The next code she was told to enter was 00095645. Seconds later, Helen sees $956.45 transferred out of her account. She questioned the caller why she was seeing withdrawals in her account and was told the bank computer systems were behind in the process and would be corrected shortly. Helen does not notice the last five numbers of the "code" were the same amount being transferred out. The more Helen questioned the caller, the more demanding he got, telling Helen he was trying to protect her account. The third code was in a similar format, and Helen realized that the last five numbers matched the dollar transfers. Very mad she's being scammed, she tells the caller to go f#@%ck himself (true story) and hangs up. Helen calls her bank and confirms she was scammed. The bank investigated the scam and thankfully decided to reimburse Helen. However, the banker told Helen that they are experiencing significant fraud claims and will be limiting future reimbursements.

PREVENTATIVE STEPS. The caller ID on her phone tricked Helen and lured her into thinking she was speaking with the bank fraud department. Again, if you receive such a call, hang up and call back the bank number on the back of your card and, ideally, on another phone. During the call, the caller kept asking questions about identification that Helen thought they should have known. Pay attention to your "spider senses," as your subconscious can pick up clues your conscience does not. The Zelle system evidently does not recognize the first three "000" in the dollar section, and Helen was fooled into thinking they were codes to reverse transactions.


Lisa listed several furniture items for sale on Craigslist and received two similar responses. Both emailed Lisa, stating they were very interested in the items and wanted to pick up the furniture that day. Lisa was very interested in getting these pieces out of her garage and was glad to have such quick responses. Lisa looked up both ladies on Facebook and found their profile pages reasonably complete with pictures of happy family. Lisa corresponded by email back to their actual email address, confirming the furniture was still available and when they would like to stop by. They both responded with various times they were available. They both emailed her, stating they needed to confirm Lisa was not a scammer and would send her a code to her cell phone to text back as confirmation. Seconds later, Lisa received a text message code from the first lady and emailed the code back to her. Once Lisa provided this code, they had access to her cell phone number. Lisa looked up texting codes as confirmation and realized they were scammers. Lisa never heard back from either lady.

With access to Lisa's phone number, they can do multiple scams to other people using her phone number. One key strategy is contacting Lisa's phone provider and convincing them to send a new SIM card, which would then give them full access to her phone number. This is very useful for identity theft as they set up new accounts in her name that require two-factor authentication (2FA) security. They can also reroute phone calls to them and scam her friends and family, especially if they can duplicate her voice with AI.  

PREVENTATIVE STEPS. As much as we all want to sell stuff, doing so online is getting very risky. If you do place an ad on Craigslist, Facebook Market Place, Next Door, etc., be aware you have now exposed yourself to full-time scammers. Never provide a text message "confirmation code" to a respondent. Do your best to confirm their identity by asking questions about who they are, where they live, how long they have been in the area, where they shop, etc. Most scammers do not live in your local area. My wife and I have decided not to sell anything online anymore, and we choose to donate the items to our favorite charities. Unfortunately, if you don't file a Schedule A to itemize your tax return, you may not receive any tax deduction for your donation. If you do itemize your tax return, ask your accountant for an estimate of the tax savings for the donation. Otherwise, there are probably family members or friends who may want your stuff.


Last year, I successfully sold an expensive walk-in tub that my wife was convinced I was being scammed. Bill responded to my Craigslist ad, which had all the typical scam qualities. He was an elderly man (he sounded old on the phone), living over two hours away (too far away to meet personally), and wasn't aware of how to electronically transfer funds to my account. He asked if he could mail a cashier's Check for payment. Red Alert! Funds for Cashier Checks cannot be verified upon deposit by the bank for several days and sometimes several weeks, depending on the institution. We spoke a couple of times, and I learned he was 90 years old, a former fighter pilot, and owned for many years a replica P-51 fighter plane. 

He hurt his back years ago and always wanted a walk-in tub to soak his back. He was also a children's book author with a couple of books in print. All of this fell on deaf ears with my wife, who remained skeptical. Upon agreeing on a price, I received the cashier's Check a few days later and went to the bank to confirm it was legit and deposited it into my bank account. Cashier's Checks are an easy form of currency to forge. The banker told me they could not confirm if the cashier check was valid for several days and would call me once the funds were received. A few days later, my banker called me and said the Cashier's Check was good and funds were in my account. I created the large tub on a pallet and shipped it to Bill. 

A week later, I received a thank you note with ten copies of one of his children's books (one for every grandchild) and a picture of his P-51 fighter plane.

What Does It Mean To Me?

The TD Ameritrade merger with Schwab, transferring billions of dollars between the custodians, brought thieves out like bees to honey. Fortunately, none of our clients experienced any losses or mistaken notices from either company. Also, Schwab was well prepared with cyber security and creating a 2FA process with an internal app you need to download onto your phone. It is an extra step for all of us but necessary for our own security.

Let us know if this Weekly Brief was of value to you. We would also like to hear if you experienced any scams that we can share with our readers to alert them. As quickly as scams are identified, they move onto new ways to trick us. Ironically, the scammers are keeping us and our government honest. Most importantly, the more digital currency systems fail, the more important is the good old US paper dollar bill currency system. That's probably why our government airlifts billions of hundred-dollar bills shrink-wrapped on pallets to foreign countries as our financial support. If governments had their way, we would be on a 100% digital currency system with no paper or coin currency in circulation. In my opinion, the easier it is to electronically transfer funds, the easier it is for governments and institutions to control our wealth or, worse, take it from us.