December Finance Meetup
How to recognize and avoid scams
(by Paul Stephan)
Thanksgiving is officially over, prompting the release of Mariah Carey from her frozen slumber to terrorize us once again.
Prepare your ears for the unrelenting auditory onslaught that is "All I Want for Christmas". At the same time, you should also be aware that scams and cybercriminals typically increase their efforts during the holiday season. The goal is for us to fall for one of their scams and take an action that “gifts” them access to your personal information or your money.
Scams are everywhere, and come in all different flavors, often preying on those least equipped to handle the repercussions, such as older retirees or individuals facing financial hardships that may be desperate. Identifying these scams can be challenging, but here are some red flags to help you recognize and avoid them:
1) You’re promised big profits with low risk (too good to be true)
2) They only communicate via social media, email, or text
3) You’re pressured to invest NOW
4) Generic greetings or messages that may be poorly written or vague
5) They request your personal information over email, text, or phone.
Like the old saying goes, if it sounds too good to be true, it’s probably not. Scammers like to wave large sums of money in your face, which out of greed or desperation, blinds the victim to the truth until it’s too late and the promise vanishes, along with their money.
And if you do get scammed, dont fall for the flood of new scam attempts that will come your way, because the scammers know you can be scammed and the little bastards will share your contact information with all their friends.
Someone I know (late 60s) lost their life savings to a crypto scam - and TOOK OUT LOANS to invest even more in the scam. The grift only ended after the family put a stop to it when the victim asked to borrow some money so they could pay the police or lawyer or tax department or whoever was trying to "help" them “recover” the stolen money.
This is known as throwing good money after bad. Don’t do it. No one is coming out of the woodwork to help recover your money. It’s gone. Deal with it.
Last I heard, there's about $50,000 left on that loan. 70 years old and still working to pay off a loan with nothing to show for it.
Don’t think the people you care about will reach out to you if they’re getting scammed. More than likely, they will trust their own poor judgment and you won’t hear a thing until it’s too late. There is no easy money. No one is just going to hand you an amazing investment. You want something solid? Invest in an S&P 500 index fund. That will give you like 9% a year. Any return higher than that will bring with it proportionally higher risk. Double your money in 90 days? Forget about it. If the investment can’t wait two weeks while you look into it, it’s not an investment worth your money.
How to Recognize and Avoid Scams
A. Stay Informed: Regularly educate yourself on current scams and stay updated on common tactics used by scammers.
B. Verify Sources: Always verify the legitimacy of emails, websites, and phone calls. Contact the company or person directly using official contact information.
C. Don’t click on links in emails or texts, don’t click on ads. Scammers can make fake messages that look like the real thing (e.g. package notification from UPS, email from your bank)
D. Trust Your Instincts: If something feels off, it probably is.
To avoid falling victim to scams, it's important to stay informed about common scams, be skeptical of unsolicited communications, verify the legitimacy of requests, and seek advice from trusted sources. Education and awareness play crucial roles in protecting oneself from scams.
Join us this Sunday to discuss the topic and share your experiences with scams. As always, these financial meetups happen on the first Sunday of the month at 3 pm Pacific. I will send out a reminder email with the Zoom link an hour before the meetup.
To attend the webinar, please email Paul in advance at pysteph@hotmail.com.