How to stay safe from nearly all scams

[00:00:01] Our brains not only reward us for being trusted, but also for being trustworthy. We genuinely enjoy behaving in a trustworthy manner. We don't want to breach others' trust. We want to reciprocate, to do right by others.

[00:00:26] When people find out what I do, they say you'll never run out of material. The truth is, I run out of material with every episode. This isn't to say scams are scarce, but it is to say there are only just a few types of scams. They're just revamped based on what seems to be working at the moment.

[00:00:50] Phone calls that warn people of missed jury duty or unpaid police fines work until police put out the word that these scams are going around in a community. When people are aware, they're less likely to be fooled. The phone calls may then switch to threats to someone's social security check or a compromised bank account.

[00:01:15] When that stops working, scammers can turn to AI to scare marks into thinking a loved one has been kidnapped or is in trouble. It's all the same scam, just adjust it to meet what the market is willing to buy. Scammers may then switch to parking lot scams, hoping to convince people to give money to help them get back home or feed their children. Then there are romance scammers, which are always working, trying to steal people's hearts along with their money.

[00:01:50] I'm Jim Grinstead, and today we'll talk about the broad consistency among scams, but most importantly how to spot them and protect yourself. If you keep your wits about you and know what to look for, scammers will go looking for someone else to rob. It may seem these scammers and con artists are all individuals, scraping by on whatever

[00:02:19] they can pull off. Well, certainly some are, but it's a lousy way to make a living. Instead, there are typically cartels or crews of scammers who work together to run these scams. The cartels provide information on who the best marks might be, provide legal protection and bail if someone is arrested, and bring con artists with similar skills to run scams that require multiple people.

[00:02:47] On a larger scale, they have auto dialers and sucker lists that make it easier to either attempt to scam millions of people or scam people who are already known victims. And as we found out in an earlier episode, there's very little police can do for you if you're conned. Police have limited resources and can't help every individual that's been conned.

[00:03:12] To get the resources they need, they need evidence of large crime rings that are involved. Even then, individuals don't get much beyond the satisfaction of knowing the criminals were caught. Right now I'm going to run through some scams, and at the end of the program, I'll give you tools to protect yourself against all of them. Be patient. I've got your back.

[00:03:42] Let's start off with a scam I hate the most. Romance scams. They take not only your money, but your self-esteem, and your trust in other people. Here are the basics of how it works. Lonely people, usually age 50 or older, go looking for a companion. They find someone online who's attractive and easy to talk with. You soon find that you have things in common and share the same sense of humor.

[00:04:10] You want to meet this potential new partner, but they keep putting you off, claiming something like their mother is gravely ill and they can't leave the bedside. Plus, she's trying to raise $2,000 from relatives for a medical procedure that will save her life. The scammer doesn't ask for money. Yet. But the mark just can't resist. How could they deny them the chance to save their mother's life? Plus, you'd feel good helping someone you've grown to care about.

[00:04:39] The scammer objects, saying they couldn't ask for that, but eventually they relent. The scammer has found the willing mark, so now it's just a matter of seeing how much they can take until they get wise. It's easy to believe you'd never fall for such a thing. But keep in mind, these people are professionals. They are very good at what they do, and they've done it hundreds of times.

[00:05:07] This will be your first time. They know what words signal that you're lonely. They have all the time in the world to talk with you and learn more about you. That makes it easier for you to trust them and eventually take tens of thousands of dollars, perhaps more as the con plays out. These people are not bumbling customer service reps.

[00:05:32] They're professionals, backed by people with money and the willingness to invest it to con even more people. The scripts are written by English speakers and fine-tuned in their effectiveness. Romance scams are slow cons and may take years to play out. The longer it goes on, the more they learn about how much money you're willing to give up and when it is run out.

[00:05:55] This bad has become a sinking ship.

[00:06:36] Losing my grip.

[00:06:39] The driver's pulling and dragging me, dragging, dragging me.

[00:08:01] Nearly all other scams are impersonation scams. Con artists trying to make you believe there's someone they're not. If you believe what they say, then all they must do is tell a credible tale that will lead you into handing over your money. Scam artists are a bold bunch. They'll scam you right to your face. They've done it hundreds of times. They know how people react and are ready to counter nearly any argument. If you aren't going to be a good mark, they just walk away.

[00:08:31] They don't care what you think about them. You'll never see each other again. They move on to a new mark while you just stand there confused. While there can be longer encounters, most are fairly short. The card game Three Card Monty is a scam designed to take all your money in fewer than eight minutes. You don't see it much outside of New York and some other cities, but if you know what to look for, you'll see why they call it the longest-running show on Broadway.

[00:09:00] For any of these scams to work, the scammer has to create a world in which it makes perfect sense to hand over your money. Creating that world often means appealing to a mark's fear or greed. Here's a simple one. The money box. Back in the day, a scammer would come into town. Make acquaintances with the well-heeled members of the local community and get around to inviting them to a party.

[00:09:28] During after-dinner conversation, he or a shill would accidentally let it slip that he had a box that could print money. The diners were interested in buying it, but they were told there was only one. And because of the chemicals involved, it could only print two $100 bills a day. More machines could be built, but they aren't cheap. The cost was $30,000. Why would that be a problem when you could print all the $100 bills you wanted from blank pieces of paper?

[00:09:58] In short order, the machines were delivered. The money changed hands and the con artist left town. The machines were preloaded with six $100 bills, so that gave them at least a three-day head start. The scam is still being run today, but it's a money-washing scam where chemicals remove black ink from a note to reveal a $100 bill. It's how drug smugglers move cash. There's a similar version where checks are stolen from post office boxes and altered.

[00:10:28] These are part of a host of scams designed to convince people they can make money fast. If you create and test one tiny classified ad in the newspaper that makes just $30 to $40 profit in a week, it could make you a fortune. Because the secret is learning how to take that one tiny classified ad that just made $30 to $40 profit in a week,

[00:10:52] and to realize that you could now take that same exact ad and place it in up to 3,000 other newspapers around the country. That's what I did. I found tiny classified ads that made $30 to $40 profit in a week, and I placed those ads in around 1,000 other newspapers around the country. That's how I generated over $50,000 a week out of my one-bedroom apartment.

[00:11:21] Yep, tiny little ads can fill your mailbox with cash for the rest of your life. And that would be true, except it's not. Don made quite a career telling people they could make big money fast with very little work. All they had to do was buy his course, and maybe some other materials or classes that would require you to buy a larger mailbox. Because of all the cash coming in. If they didn't like classified ads,

[00:11:49] he also offered the chance to get rich through vitamin sales, or setting up a 900 number. His various scams worked for him, and his net worth was at one time estimated at $10 million. That all ended when the cops picked him up and charged him with 41 counts of conspiracy, mail fraud, wire fraud, and promotional money laundering. He died by suicide in jail while awaiting trial.

[00:12:17] It's time to move on to everyone's favorite subject, robocalls. Hello, this is Linda. This is the final reminder from the Office of Inspector General of Social Security Administration. Your social security number has been suspended. We would request you to get back to us, so that we can discuss about this case. Thanks, you. We're all plagued with robocalls. I'll quickly step through some of the types of calls, but then I want to tell you how the system works, and why it's so hard to stop it.

[00:12:48] Calls fall into a couple of categories. Fear, like the call you just heard. Fear that your social security may be cut off, or that your bank account's been hacked. Variations say you have unpaid parking tickets, or that you've missed jury duty. The person on the phone can solve all your problems if you've paid them, or more commonly these days, the person who will show up at your door. Don't pay them, and don't use gift cards.

[00:13:18] There are two types of systems that generate robocalls. One is an autodialer. The other is predictive dialing. Here's how an autodialer works, according to vendor Gitvoip. Voip stands for Voice Over Internet Protocol, and it typically doesn't use cell or landline technology, thereby bypassing the Verizons of the world, and often regulators. In essence, there are four key parts to a successful autodialer system. One,

[00:13:47] a computer running the autodialer's software. Two, the human agents answering the calls. Three, a voice modem. And, of course, number four, an active telephone. Certain autodialers even have voice detection features built in to their functionality so that they know exactly when to route the call to a live operator. This seamless transition may only save a few seconds per call, but that does add up over, of course, days, weeks, and, of course, months.

[00:14:17] Statistics show that autodialers can increase productivity by as much as 2% to 300%. Such significant improvements are invaluable in any field, especially sales teams where the numbers of calls you make per day can easily make or break how your day goes. It just goes to show that automation seeks to improve our careers rather than steal them away from us. The trick here is to make as many calls as you can so you can increase the number of cons you can run.

[00:14:46] The next class of dialers are predictive dialers. The goal here is not to make as many calls as you can, but to connect with as many possible marks as you can. These dialers are often loaded with phone numbers of people who've been scammed before because they are known to be vulnerable. It's easy to believe you can't be conned, and that makes you a perfect target for a con artist. Author David Destino gave a talk at Google

[00:15:13] and explained our judgments about who to trust aren't as good as we may think. If you actually look at the scientific data, it doesn't really hold up. What we've learned over the past decade, especially in psychological science, is that people's moral behavior is a lot more variable than any of us would have expected, and it's a lot more influenced by the situation. And so if you want to control your own behavior and predict the behavior of those around you, you need to realize that it's not a stable trait. You need to understand how it's affected by the situation.

[00:15:44] My model for understanding trustworthiness, it's better to think about it as a scale, kind of the old school type with the things, the plates that go up and down as opposed to a digital one, right? In any one moment, your mind, whether you know it or not, is weighing two types of costs. It's weighing costs and benefits in the short term versus costs and benefits in the long term. And those usually correlate with kind of what's good for me in an expedient fashion right now versus what's good for me to do, even if it costs me a moment,

[00:16:13] to kind of build a reputation and to build social bonds in the long term. Depending upon the situation, which decision you choose can change from moment to moment. And you can think about it, if my friend Meng loans me money in the moment, if I don't pay him back, well, I'm ahead. I've profited in the short term. But long term is probably a poor decision because he's not going to give me money again and I'm going to get a reputation as being a cheater. But if I can get away with it, my mind, unbeknownst to me, and my own moral codes that I endorse,

[00:16:42] will try to push me to be a bit untrustworthy. So, who are you going to trust? Me or your lion eyes? That was me, or at least the AI version of me. All I needed to do was create a break between my real voice and the automated one, toss in a bit of musical distraction,

[00:17:12] and you may very well I was saying that live. Building that doppelganger took some money and about two hours of my voice to build the model. Now it will say anything I want. That's a nice parlor trick, but what if someone built an AI that would talk with you using personal data about you, a nickname, an old address where you lived, or the name of a pet? What if you saw the face and heard the voice of a loved one claiming to be in trouble and needing money? What are you to believe?

[00:17:43] This problem is only going to get worse, and I wish I had proven ways that could help you identify them. The rules I'm about to give you will help, but they aren't perfect in these situations. There's no doubt scammers are coming for us, so how do we protect ourselves from them? The most important thing is to slow down. Scammers want to put pressure on you to act quickly, so you don't have time to think. You can change that. No matter what they say,

[00:18:11] remember they need you to take some kind of action for their scam to succeed, and you have control of that pace. You'll remember that earlier I told you that for a scam to succeed, a scammer must create a situation where it makes perfect sense to hand over your money. If you slow down, you can change the reality of that situation.

[00:18:39] One of the scariest cons going around now involves AI. The voice of a relative or friend is cloned, and you're led to believe that they will go to jail if you don't post bail immediately. You can slow that down by calling the police independently and asking if that person is in custody. Even if the police can't answer right away, the world won't end if a person spends a night in jail. It'll be unpleasant, but not as much as losing tens of thousands of dollars,

[00:19:08] and they'll be grateful you took the time to check. If you take nothing else from this episode, remember to slow things down and consider whether the situation is real or if it can be delayed 24 hours. This is true for any scam. Secondly, if they want you to pay them using prepaid gift cards, odds are very high that it's a scam.

[00:19:38] They'll want you to read the numbers off the back of the card, and within seconds after you do that, your money is gone forever. The same is true for wire transfers. Most banks and Western Union offices try to warn their customers, but it doesn't always work. Your next line of protection is to phone a friend, and this is particularly true of romance scams. When emotions are running high, talking with a friend can help bring clarity.

[00:20:07] Question them about why they feel as they do and see if their arguments make sense. If you have been scammed, talk about it. Tell your friends and let them know what happened. It may be a bit embarrassing, but it's not like you're a fool. You've been robbed just as if a mugger jumped out of an alley. You crossed paths with a professional, and you were defrauded. The more you and your friends talk about your experiences,

[00:20:34] the more you'll know about scams in the area and the tricks they're using. Don't let anybody shame you. It's not your fault. These rules will keep you safe nearly all the time, but the most importance of these rules is to just slow down. If you enjoy the show, please tell your friends and encourage them to listen. And give us a five-star rating wherever you listen.

[00:21:04] It's important to help people find the show. If you want to talk to me, that's easy too. There's a new feature on our website, scamsandcons.com, that allows you to send me a text. It's private, and I'd love to hear what's on your mind. If you want to give us more love, consider supporting the show monthly via Patreon. It not only helps with expenses, but it allows us to take the show to the next level.

[00:21:32] You can sign up by going to patreon.com and searching for scams and cons. That's p-a-t-r-e-o-n dot com, and I'll include a link to it in the show notes. Thanks for listening.