World of Scams: Doubt before Belief

While most of us don’t realize it, we are threatened with a potential scam several times a day, every day! With the number of scams upon us, the odds really are against us. Technology has brought convenience to our lives, but this availability of information makes it a lot easier for attackers to develop believable scams. On the rise are scams where we are fooled into giving money directly to scammers rather than it being stolen. This article could be pages long due to the number of scams out there and the enormous number of precautions to take. If you don’t have a lot of time and you’re reading this article, I urge you to at least consider reading the tips at the end of the end of the article.

This past summer, I unfortunately witnessed a family member get scammed as they traveled to Italy. For months they spoke about how amazing that part of their trip would be, and they arrived in Italy without any idea of what was about to happen. They had found a website that had apartment rentals and sent it to a family member in Italy to verify it. The family in Italy did their due diligence and even had a friend drive by it. The scammer texted them and even spoke on the phone for months about the booking. They asked them to pay by bank transfer, which they did. When they arrived in Italy they tried to get in touch with the owner and they no longer responded to messages or calls. Eventually, their account was deleted. Worried that they might’ve been scammed, they had a friend living in the area physically knock on the door and ask about the apartment. The man was bothered and told them that the apartment was never for rent and that they weren’t the only person that had told him this. A real vacation nightmare—no place to stay and a total loss of the money they had sent.

Further, just as I am writing this article, I received a scammer message on Telegram. The message says, “Hey, I need to tell you something,” and the user has a picture with a believable name. I receive messages like this almost every day via Telegram, WhatsApp, and text message. I frequently get “job offers” via text message and Facebook Messenger. In the States, text messages are surfacing about unpaid tolls requesting you to click and pay through the link. In my personal experience, I was faced with more scam threats when I had a public Instagram profile. There were frequent attempts to hack my account as well as impersonation scams. While none of these everyday scams may sound very critical, they can lead to very real consequences—the loss of thousands of dollars, a draining of your bank account, or the maxing out of your credit card. They are just a few examples of how we are constantly being flooded by scams from multiple sources. And be warned that if a scammer is successful once, they will return. 

Are you looking for the next big investment return? Chances are you aren’t going to find this through social media or email. In Singapore, victims are being enticed by testimonials, friend recommendations, and even through their own internet searches. Scammers are asking that you send money to a specified bank account or a cryptocurrency wallet for investment opportunities. To prove to the victims that their investment is real, they may even give them “profits” along the way to encourage victims to further invest. Once the victim tries to withdraw their earnings and can’t, they realize they have been scammed. Many victims are losing over S$40K in one scam. As cliché as it may sound, there really aren’t ways to make a high return without high risk; promises of low risk with a high return are red flags. Read more about investments scams in Singapore here.

With the widespread use of WhatsApp and other messaging apps in Singapore, it can feel very normal to be contacted by reputable sources via these channels. Scammers have recently started contacting victims through messaging apps claiming to be the Singapore Police Force (SPF) or the Ministry of Manpower (MOM). They claim that there are issues with your bank account or personal information and thus require the victim to verify sensitive information. In some cases, they go as far as video calling victims and asking them to show their work permits or bank cards. Only later do victims find that there are unauthorized transfers in their bank account, in many cases losing up to S$100,000 from one scam alone. To learn more about how to be sure when you are being contacted by governmental agencies, read more here.

The worst part about these popular scams is that there is no way to recoup your losses in most situations. For U.S. taxpayers, in some situations where they entered a transaction with the intention of making a profit, but it turned out to be a scam, they might have a basis to try to claim a theft loss. The loss would be taken as an itemized deduction on Schedule A. This is a very gray area, and it is highly advisable to have a discussion with your tax advisor and work with a tax attorney to get an opinion letter regarding your circumstances. This letter is not a guarantee that the IRS will accept the loss, but it would help if the transaction were ever audited.  

**Always doubt before you believe if it involves money or there is an urgency to proceed**

Precautions and Tips to Avoid Being Fooled by Scammers

1. Take a step back and think about the message received or what you are being asked to do
   1. Think to yourself, was this text message, message on social media, email, phone call anticipated? 
   2. Would a reputable, large company contact me in the way I’m being contacted? 
   3. Is the message spelled correctly?
   4. Is there a sense of urgency to act? Are you going to lose out on an opportunity if you don’t act now?
   5. Is the only way to send or pay money through crypto, wire, bank transfer, or gift cards?
   6. Do a Google search with the information you have and the word “scam” and see what you find.
2. Don’t click on links in emails, text messages, and social media messages unless they are anticipated 
   1. Bookmark the websites you go to frequently and sign into the account rather than clicking on the link in an email or text message.
   2. Using a mouse to hover over a link in an email can help to determine if the link is going to where you think it is going.
   3. Confirm that the sender of an email is using the same email address that you know.
3. Ask a friend, spouse, adult child, or Avrio for a second opinion
   1. It’s easy to get excited about a potential good deal or investment opportunity, but if that investment or deal is that good, it can wait one day for you to have a discussion with a trusted individual.  
4. Consider reducing the amount of your information that is public
   1. LinkedIn—while an extremely powerful and wonderful website, it carries risks. Scammers can easily find out where you work, your past jobs, often your email and phone number, and people you know.
   2. Facebook/Instagram/TikTok—Your personal life is on display for anyone to know who your family and friends are. Scammers can see the places you go, what you like, and target scams from what they learn.
5. Avoid public Wi-Fi networks 
   1. When using public networks, avoid logging into your financial accounts, emails, and social media unless you have proper protection on your devices. Use your data rather than Wi-Fi in those instances. Change your passwords later if you have no other option as a precaution.

The best prevention is to be aware that there are more reasons to doubt before you believe. You can find out more information about common scams in your country using the links below. 

• Scams Singapore: https://www.scamshield.gov.sg
• Scams U.S: https://www.texasattorneygeneral.gov/consumer-protection/common-scams
• Scams UK: https://www.fca.org.uk/consumers/protect-yourself-scams
• Scams Australia: https://moneysmart.gov.au/financial-scams

This material is intended for educational and informational purposes only. It is not intended to provide specific advice or recommendations for any individual. Additionally, you should consult with your Financial Advisor, Tax Advisor, or Attorney on your specific situation. The views expressed in the material are that of the author and do not necessarily reflect those of any market, regulatory body, State or Federal Agency, or Association. All efforts have been made to report or share true and accurate information. However, the information may become materially outdated or otherwise rendered incorrect due to subsequent new research or other changes, without notice. The author nor the firm are able to always verify the content from third-party sources. For additional information about the firm, please visit the MAS Website at https://www.mas.gov.sg/  and the SEC Website at www.adviserinfo.sec.gov. For a copy of the firm's ADV Part 2 Brochure, please contact us at info@avriowealth.com.