Consumer Action participates in virtual state resource fair

By Nelson Santiago

This writer participated in the cyber fraud roundtable discussion, moderated by Christina Tetreault, Deputy Commissioner of DFPI’s Office of Financial Technology and Innovation (OFTI). Other panelists included Michael Sohn, supervisory special agent with the Federal Bureau of Investigation (FBI), and Kathy Stokes, fraud prevention programs director with AARP. The fraud panel focused on current cyber fraud trends, steps consumers should take if they become scam victims, and how to avoid becoming a target or a victim of a scam.

Sohn explained that one ongoing type of fraud the FBI is seeing is the business email compromise (BEC). In this scam, fraudsters target employees with access to company finances and trick them into making wire transfers to accounts controlled by criminals, as explained in this article. Sohn recommended that BEC scam victims file a complaint with the FBI's Internet Crime Complaint Center (IC3). He further recommended that anyone getting an email asking to change where a payment should be sent pick up the phone and call the person requesting the change directly. Sohn also urged webinar viewers to use two-factor and multi-factor authentication to protect any account that requires them to log in.

Stokes described online romance fraud as one of the worst types of scams—one that has not only a financial impact, but also a profound emotional impact. Scammers research their targets and do everything they can to charm them. Eventually, weeks or months later, the criminal asks for money. Stokes explained that they have also recently seen romance scammers claiming to be very good at investing in cryptocurrency and asking their targets to invest their money—initially through a legitimate cryptocurrency exchange, but later through a fake exchange, where the victim loses access to their funds. Stokes explained that research shows that if you know about a specific scam, you're 80% less likely to engage with it; and that if you do engage with it, you're 40% less likely to lose money or sensitive information. (To avoid being victimized, consumers can stay in the know about scams by subscribing to Consumer Action's SCAM GRAM newsletter and AARP's Fraud Watch Network alerts.)

Consumer Action believes it’s crucial to learn to recognize the signs of a scam. Red flags include unexpected communications; demands for money or information; a promise that the consumer will receive something desirable, or a threat of an impending harm; a sense of urgency; and a request for payment in a form that's difficult to trace, reverse or recover—gift card, wire transfer or peer-to-peer payment platform, for example. This writer related to the audience some of the complaints recently received on Consumer Action's hotline, all of which featured one or more of these red flags. It is important that victims of scams report them to any financial institution involved in the transaction, as well as to the FTC, the FBI, and local and state consumer protection offices.

Check out the recorded webinar for more tips on avoiding fraud and what steps victims can take, plus additional financial capability resources from the FDIC and several state agencies.