To make a scam work, con artists generally know they have to play on one of two emotions: fear or greed. Once the scammers trigger either of these two emotions in their target, they know they have a good chance of making victims waive their better judgement and fall for the scheme.
One of the more popular cons currently in vogue is targeted at the elderly and tries to appeal to their love of family to trick them into wiring money to a far-off location. This scheme, commonly called the "grandparent scam," is devastatingly effective because it packs such an emotional punch for the victim.
The grandparent scam is one variety of the "impostor scams" that are prevalent today. These schemes range from fraudulent online romances to fake kidnappings, and while the details may vary, they always share common characteristics. The grandparent scam is cut from the same cloth, and if you know the red flags, chances are you won't fall for it.
In 2016, the FTC reported over 400,000 complaints related to this fraud, and the FBI's Internet Crime Complaint Center has received complaints about the grandparent scam since 2008.
But these numbers don't begin to convey the impact of these crimes, because most victims are too ashamed to even report them. The U.S. Department of Justice estimates that only 15% of fraud victims file a report for exactly this reason.
How the scheme works
"Who is this?"
"It's your favorite grandson."
"Yeah. Look, I'm in a lot of trouble and I knew you were the only person I could trust..."
This sort of phone conversation is one of the ways this scam might begin. In any case, the fraudster will pretend to be a loved one who is in trouble and needs money immediately. As an economic crimes detective, I've investigated a number of these cases and have heard a wide variety of stories. Sometimes the fake family member reports they were skiing on vacation and suffered horrible injuries and need money to pay for medical bills before giving the phone to the "doctor." Other times, they were supposedly arrested because they were in the wrong place at the wrong time and need bail money, and then they give the phone over to a "law enforcement officer" or "lawyer." The details of the story differ, but there are always common characteristics at its root.
The scammer tells a quick story of woe before giving the phone over to an alleged authority figure. The phony family member will always have an immediate need for money and urge the intended target to keep this need a secret. This request for money will immdiately be followed with instructions for wiring the funds to desired location. When the victim plays along with the secret, they don't verify the story with other family members before wiring the money.
Also note that the stories always include an excuse for why Johnny doesn't quite sound like himself. Variations of "The accident broke my nose and that's why I sound so different" are commonly used lines by the crook on the other side of the phone.
If the first request for money is successful, it will always be followed by further requests. "Grandma, thanks for paying for my bail but I also need to pay my lawyer." If the second request is successful, it will be followed up with a plea to help pay for court fees. Remember, a fraudster will never stop asking for money in these cases until the victim either stops sending money or the victim runs out of money to send!
How to avoid becoming a victim
Of course, no one wants to deny family members money in a time of legitimate need. So how does one discern the difference between a fraudulent scheme and a sincere request? Here are some helpful things you can do to keep you or someone else from becoming a victim:
- Never wire money to anyone when you cannot personally verify their identity. There's a reason why fraudsters' favorite way to receive money is through a wire transfer: Once that money is gone, as with cash, there is no way to trace or follow it. These kinds of transfers carry none of the protection for victims that other payment methods, like credit cards, offer. And keep in mind: What clinic or law office is not set up to accept a payment via credit card?
- Ask personal questions to verify the identity of the family member. This isn't fool-proof in today's social media age, but simply asking for one piece of information from the alleged family member could nip this scheme in the bud. Ask your loved one on the line their favorite baseball team or address before committing to send money. If they can't answer, you know it's not a legitimate request. If it is a legitimate request, you will still have plenty of time to send money to pay for legal or medical bills.
- Don't act quickly. Take a second, tell the person on the phone that you need to think about it before making a promise, and hang up. Giving yourself time to think through the conversation you just had can do wonders for your ability to identify red flags or see if it made any sense.
- Contact other family members to verify the story. If the person who called said they were your grandson, call his parents to see if he was really vacationing in Aspen where he supposedly got into his skiing accident. Whether the story you've been given is legitimate or fraudulent, someone else will know if that person was where they said they are.
If you suspect you've been the target of this or any other phone scam, then you should report it to the Federal Trade Commission by using its online complaint assistant or calling 1-888-382-1222. Whatever you do, don't stay silent about it.
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