Anyone Can Be Scammed

October 2021

Robert Lappin was a self-made millionaire. He started out making vacuum cleaners, then expanded his wealth by investing in real estate and finance. He created the Robert I. Lappin Charitable Foundation to help the Jewish community. Mr. Lappin, being an intelligent and carrying person, invested his foundation funds, his employees’ retirement plans, and his personal funds with a well known and respected man in the investment world. This man had served as the chairman of the NASDAQ stock exchange. The man had numerous high-profile clients from all over the world.

 For 17 years Mr. Lappin did business with the man and his investment firm. It is estimated he had invested around $30 million dollars. In 2008, Mr. Lappin learned that all his funds were gone. The man he invested with, Bernie Madoff, had been running a Ponzi scam for decades.

 Mr. Lappin was a smart man who worked hard to make his money and was very careful with how he invested it. He reviewed his investments with Madoff and had them reviewed by a money manager, yet nobody caught on to the scam until it was too late.

There are a lot of lessons that have been learned from Madoff’s Ponzi scam; one of them being that nobody is too smart to be scammed.

In the right situation with the right approach, anyone can be scammed. Scammers are professionals that take advantage of peoples’ emotions, stress, respect for the law, and arrogance to perpetrate their scams.

 I often find people who are victims of scams are in an emotionally vulnerable state. It could be depression, loneliness, or low self-esteem. With a lot of these emotional states, I also find these victims are in poor physical and/or mental health. The victims are usually financially strapped and can barely pay their own bills. The fraudsters know how to tell stories promising love, companionship, financial security, and a future of happiness that the victims have only dreamed. The emotional state the victims are what allows them to look past warning signs and only see the promise of the good things to come.

Fraudsters will create stress for their victims. They use the pretense of an emergency and urgency to create stress in victims. They press the victim to send funds to protect a family member, for the victim to avoid being arrested, for the victim to prevent electric from being turned off, or that if the victim does not send the fraudster funds a relative of the fraudster may die. The fraudsters will say or do anything that improves the chances of the scam working.

The scams where fraudsters pretend to be the IRS, Department of Treasury, FBI and/or US Marshalls seem to be growing. These scams target people of all generations. They play on the respect people have for the rule of law and the fear people have of the government. Their focus becomes doing what the government or law enforcement tells them, so they do not end up in jail.

I often hear people who are being scammed say they are too smart to fall for scams. These people tell me that they have searched online and verified the information they have been provided. What they don’t realize is fraudsters expect people to do this. Fraudsters have no problem using a real business or persons information to help them perpetrate their scam. With spoofing technology, the fraudsters can easily make it appear they are calling from the business. They can use an email and/or website domain that is close enough to the real ones to fool their victims.

No matter a person’s education, background, or experience, anyone can be scammed. Fraudsters look for people that are emotionally exposed, stressed, and even over confidant. Fraudsters have studied their craft. They have developed strategies, story lines, and used technology to increase their odds of success. Anyone can be scammed but everyone can learn how to protect themselves. It is best to avoid making decisions based on emotions or while stressed. Being confident in your decision is never a bad thing, but it never hurts to get a second option from a family member or trained staff at Radiant Credit Union.

At Radiant we understand how easy it is for people to be scammed. We provide training to our branch staff on how to detect scams by talking to members and reviewing member activity. We’re here to help.