Sadly we’re still seeing a large number of online scams that are taking money from victims. A lot of it still has to do with digital currency or cryptocurrency or Bitcoin. Usually, it’s not actually Bitcoin, it’s other types of digital currency or crypto.
What happens is a victim will be contacted either through social media, a dating site text message spam, or some other method, and there’ll be a conversation that’ll start. Sometimes that has nothing to do with investing or sending money. Sometimes it has to do with something else, maybe a social conversation. It may be a dating conversation. It might be somebody saying it’s the wrong number. We’ve talked with a lot of clients that have said I just got this random text that said Hey is Joel there? And they say well no Joel’s not here. This is the wrong number. And then they’ll say well, where do I send the money from his investment? And then it gets the curiosity of that person raised up and they start asking questions.
No matter how you get into these scams, what’ll happen is they’ll keep asking for money. What we’re seeing more and more, which is very troubling, is victims are starting to borrow money. They’re taking out loans to put into these scams. You may think, well why would a victim borrow money to send to one of these scams? Well here’s how it works.
The scammer says look if you put in $3,000 (they start with a relatively low number) you can double your money in a month. So you put in 3000 and they send you back a statement that says Hey your $3,000 is now $5,000. Now it’s $5,500 They show it going up. And sometimes the victim will say okay I want to take it out now And they said well, you have to wait a month cause it’s locked up for a month That’s the story they tell. And that buys them some time to continue the conversation.
So what happens during that month? Well, what they’ll say is you know your account now is up over $6,000. If you get your account to $10,000, it will double again and you’ll have $20,000. So they’ll ask you for another $4,000. And sometimes you’ll say I don’t have that much money and they’ll tell you that they’re going to loan you the money. They’ll say if you come up with a thousand. We’ll loan you the other three. So what they’re doing is they’re pretending to give you money. It’s not even real money. This is all like monopoly money, they’re just making up numbers on the statement. But when they tell you that they’re loaning you money, it makes you feel special that you have somebody willing to take a chance with you to give you credit.
So now they loan you $3,000. You put in a thousand. Now your account is at $10,000 and they send you a statement that says look your account is now $18,000. You know if you had your account at $30,000 it will double again and you’ll be at $60,000. Or sometimes they’ll say it’ll triple and you’ll have a hundred thousand. So they’ll tell you to come up with another $10,000. If you say, No I can’t. Well they’ll say here’s the loan another $3,000, and they’ll tell you to go get a loan a personal loan, a credit card loan, a home equity loan, take money out of your 401k whatever it is to cover the difference. And if you balk at that or resist it they’ll say look, we’re loaning you money so isn’t it fair that you go borrow money somewhere else too? We can’t loan you all the money and look how much you already made. And you think it’s a no-brainer. You already doubled your money. But the amount that’s showing on your statement, it’s just fake. They just made up the statement on a word processor. But the fact that they’re using psychology to tell you that first of all your profits are going up. Second of all, that they’re loaning you money, they’re doing you a favor makes you feel kind of entitled and maybe even, somewhat obligated to them to borrow more money.
Over the last few months, 50% of the fraud victims we’ve spoken to have borrowed money from third parties, their bank, credit card advance, home equity loan, or borrowed money from the 401k to put into the scam. So now when the scam blows up, Not only did they lose cash out of their pocket, but now they have loans that they have to make payments on. So be aware that this is a more aggressive stance the fraudsters are taking to make you take out loans to put into their scam, so they can get more money out of your pocket.
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