DO YOU THINK YOU'RE TOO SMART TO BE SCAMMED?
About 4 out of 5 people say yes. Most also believe they’re better than others at spotting scams. Yet, scams work—and they’re more prevalent and profitable than ever before. In fact, every 15 seconds, someone’s getting scammed.
Each year, that’s billions lost. Seniors alone lose at least $2.9 billion a year to con artists. And they aren’t even the most vulnerable marks. Millennials are.
So, why are financial scams more rampant and lucrative than ever before? Technology and the internet have been key. They’ve given scammers a better smokescreen and a global reach. They’ve also made it easier to perpetrate mass fraud schemes.
Beyond having better tools, scammers also have better prey these days. The uncertainties of the day have made it easier to manipulate and con people.8 After all, we’re naturally averse to uncertainty. It scares us. It makes us desperate for stability and impulsive when a golden opportunity seems to arise.
That’s an ideal combination for scammers. And it’s why financial fraud spiked during the pandemic, just like it did during the Great Recession of 2008.
Remember, no matter how fancy a con artist's tricks or disguises may be, they ALL rely on the same tactics.
You never know when or how you may be targeted by a scam.
Con artists can bait you at any time, and their schemes are becoming increasingly sophisticated and organized.
Some con artists are even joining respected organizations to appear more trustworthy and put a legitimate face on their schemes. Bernie Madoff is a prime example. It’s how he was able to run one of the largest Ponzi schemes in history.
Yet, as tricky as financial fraudsters can be, they aren’t rocket scientists. Remember, no matter how fancy a con artist’s tricks or disguises may be, they ALL rely on the same tactics.
They stress urgency and exclusivity, emphasizing how special you are to have been selected for some opportunity or offer. They play on emotions, like fear and excitement, and they may even present themselves as experts. Above all, they always demand money or information up front before you get anything.
Of course, some of these features aren’t exclusive to money scams. Some legitimate opportunities will be time-sensitive or require something up front.
With financial fraud, however, you can usually expect at least one big red flag—like wildly poor grammar, an out-of-the-blue notice of a winning or penalty, or a request to wire money via Western Union or MoneyGram.
All that can be easy to overlook when you’re dazzled by an offer for the first time. These details are easier to see as red flags, though, when you take a second or third look.
So, always take your time when you’re considering any new financial offer or investment opportunity.
Ask questions, be skeptical, and seek out feedback from someone you trust.
And if you are victimized by a scam, report it to the Federal Trade Commission here or the Federal Bureau of Investigation here so authorities can take action.
As an adviser, I’ve seen how easy it is for people to get swept up and swindled by financial scams, especially when economic turbulence hits. I’ve also helped my clients weigh their options, consider fresh angles, and make strategic decisions that better support their financial goals.
If you’re considering a new investment or you’re thinking of ways to scam-proof your finances, let’s talk. Call me at the number below. I’d love to hear about the opportunities or strategies you’re considering and share some helpful advice.
Paavan Kotini, CEO & Principal Advisor
Kotini & Kotini
(804) 372-8307
https://kotiniandkotini.com
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