Financial Fraud and the Art of Deception

Financial Fraud and the Art of Deception

US 100 dollar bill as a bait. American currency on the hook. Investment risk or money trap, business fraud and cheating or financial pitfall and mistake concept. Copy space

Years ago, scammers were relatively easy to spot – poor grammar and dodgy names and websites were glaring red flags for fishy (or phish-y) business. Today, with the help of significant technological advances, bad actors use sophisticated techniques like social engineering to gain access to your personal information and assets, and it’s becoming increasingly difficult to know when you’re being scammed.

Social engineering is the art of manipulating, influencing, or deceiving someone in order to gain control over their private information, access, or valuables.

According to the Federal Trade Commission, one in ten adults falls victim to a scam or fraud each year, and we don’t want you to be one of them. As such, we’d like to share two real examples of advanced fraud schemes that are threatening Yeske Buie and Schwab clients to heighten your awareness to some of the ways that fraudsters are attempting to obtain your sensitive data and your money. And for additional tips for preventing cyber fraud, check out this checklist created in collaboration with our team at Charles Schwab & Co.

The Fraud Investigation Scam

This sophisticated remote access scam uses serious manipulation tactics to prey on the kindness of others through impersonation.

This scam begins with a phone call from someone claiming to be from the Schwab Fraud Department needing your help to catch a “bad actor” that they are pursuing who is preying on senior citizens. You agree to assist the “employee,” who says you need access to a computer to help facilitate the work against the “fraudster.” They’ll do whatever is necessary for you to be able to assist, including paying you for your time and reimbursing you for a new computer, if needed.

The real fraudsters request remote access to your computer to track everything for their records as you work to catch the “bad guys.” They instruct you to call Schwab on the phone to initiate a wire transfer from your Schwab account, which will be fully returned once the “bad guys” are caught.

When given full remote access to your computer, fraudsters can view your login credentials, see what websites you visit, and install malicious software. It is extremely dangerous to give anyone full remote access to your computer.

This in-depth scam can take place over several phone calls and may even take several days/weeks as the scammers work to build a relationship with you. And if successful, the liability rests on you (not Schwab or another entity) for having requested the transfer of your funds out of your account.

The “Tech Support” Scam

In this advanced scheme, scammers take electronic tech support scams to the next level by incorporating impersonations of real personnel at the Federal Reserve and Schwab to attempt to obtain your money.

The scam begins with a pop-up message on your computer appearing to be from a legitimate company (like Microsoft or Apple) warning that your computer has been compromised. The pop-up provides a “tech support” number that actually connects you to the fraudster.

After talking with the tech support fraudster, you are then connected to someone claiming to work for Schwab as a “security officer” who informs you that your Schwab account has been compromised. In order to “protect” you, the Schwab employee impersonator instructs you to transfer your funds somewhere “safe” – wiring funds to an account that they claim is in federal custody, or physically withdrawing money and depositing it in an ATM at an address the fraudsters provide with the promise that the funds will soon be returned to you.

In actuality, once you follow these instructions, your money disappears.

Now, you may be thinking, “I’d never fall for one of these scams!”. But here’s the thing: these fraudsters are incredibly convincing. In the first example, what if the fraudsters knew your account numbers, your address, your phone number, or where you bank? What if they said they’d confirmed this request with your financial advisor – even named them by name?

In the second example, what if you also received a personalized paper letter in the mail from the “Federal Reserve” or the “Federal Trade Commission” referencing the real name and titles of genuine Schwab personnel, tech company employees, and FDIC analysts who are supposedly the individuals that contacted you? What if this letter also provided each person’s identity through their LinkedIn profiles?

Scammers are skilled in human psychology, and they facilitate emotionally charged situations that can blind our ability to think clearly and rationally. Victims of scams aren’t naïve, or gullible, or unintelligent. They are manipulated by professionals and are never to blame.

When it comes to protecting yourself from fraud, vigilance is key. It’s important to keep apprised of common scams and the tactics used by fraudsters to help you more easily spot a scam as early as possible. Learn more here.