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One phone call scam can turn into financial ruin.

Posted by Brian Hallaq | Sep 04, 2023 | 0 Comments

Hi Folks.  I've practiced Bankruptcy law for over 25 years and I've found that most people who have never experienced Bankruptcy believe that the cause of Bankruptcy is almost always related to personal failures.

I can tell you that the vast majority of my Bankruptcy clients ended up in Bankruptcy proceedings through no fault of their own.  95% of the time, a serious illness with overwhelming medical bills, or prolonged unemployment are the causes of people going in to Bankruptcy.  But there is another cause of financial ruin that is extremely insidious and it is not talked about very much.

I have filed Bankruptcy for many people who have fallen victim to identity theft.  I have also had to file many Bankruptcy cases for people who have fallen victim to financial scammers that have become extremely sophisticated of late.  Once upon a time the famed Nigerian Prince would send you an email stating that he wants to give you a lot of money for helping him conduct a financial transfer; all he needs is your bank account information and social security number and you'll get a million dollars for your troubles.

Today's scammers are much more sophisticated.  I recently had two clients who received phone calls from “the FBI”.  Now I know that most of you are rolling your eyes right now, but these scammers actually spoof the caller ID on your phone to make it appear that they are calling from the official phone number of the FBI Headquarters in Washington D.C.  They don't speak with foreign accents and they sound very official.

They will give you some story about how you have been caught up in very serious criminal matter, and that if you don't cooperate, you or your family members could be imprisoned.  But if you cooperate to catch the real culprits, you will be let off the hook; you only need to give them your private financial information, and you can't tell anybody about what is happening.

These scammers will pretend to be from the FBI, the IRS, or even the Social Security Office.  In one of these cases, my client was actually in my office, when the fake FBI agent called, and sure enough the caller ID said “FBI Headquarters”, and I took the call.  They were extremely brazen, even claiming that they would send agents to arrest me, as her attorney, for interfering with their investigation.  When I said that our next trip would be to the local FBI Field office they immediately hung up.

These scammers will sometimes spend a lot of time grooming their victims to the point where even I, as an attorney, have a hard time convincing my clients that this is a scam.  One of my clients would not believe me until I got an actual FBI agent on the phone who explained that this is an extremely common scam and that if the FBI ever wanted to talk to her about a serious matter, they would send agents to her door to speak to her in person…they wouldn't call on the phone.

In one such case, they found one of my clients who was lonely and pretended to need her to catch a potential terrorist working overseas.  The idea of doing something important and exotic gave meaning to her life and they preyed upon her loneliness and completely ruined her financially (and emotionally).

Now if you are reading this blog, you probably aren't the sort of person to fall for this type of scam, but I can bet that you know somebody who would.  We all have people in our lives, especially the elderly, the lonely, or the homebound who are susceptible to this type of scam.  We have to spread the word that if anybody calls asking for personal financial information, such as dates of birth, social security numbers, bank account/routing numbers, or even retirement account information, they need to pause, get the phone number of the caller, hang up, and call a trusted person (probably you) before they do anything.

In the most recent case, a widow lost her entire retirement plan savings to one of these scammers and to add insult to injury, she is now subject to tax penalties for withdrawing the retirement money.  Hopefully we will be able to get her some relief from the IRS, but the word needs to go out about these scams.  These criminal gangs are not just targeting your bank account; they are sophisticated enough to drain your 401(k) plan, place a mortgage on your home, or apply for and charge up credit cards in your name all while sitting at a computer in China or Russia.

In addition to people claiming to be government officials praying on the elderly, I have also had young people (in their early 20's) who are lonely and fall victim to financial crimes by people pretending to be a potential romantic love interest.  In the course of a few months, the victim will end up with new credit cards, or send gift cards without realizing that they are going to be financially ruined.  In one case the scammers pretended to temporarily need funds, that they would immediately return, and they did so several times to gain credibility with my client.  Since the money was coming back to his bank account, he assumed that all was on the up and up.  He eventually opened the opportunity for them to run up over $30,000 in credit cards and gift cards in a few days and the alleged girlfriend suddenly disappeared.

Covid-19 made this situation much worse.  We are not living as close knit communities anymore.  Many people are isolated and their contact with us or a larger community is sporadic.  We must get the word out to everyone in our lives who could fall victim to these sorts of scams.  The rule is that if someone calls you or contacts you over social media with something that sounds out of the ordinary: PAUSE.  Talk to someone you trust before you do anything, and if they tell you not to talk to someone else that is a surefire red flag that you are being targeted.  Nigerian Princes do not hand out money for free.  Supermodels do not fall in love with socially awkward young men.  And FBI agents do not need your account information over the phone to resolve some serious criminal matter.

Get the word out.  I would rather our friends and family members be overly cautious about scams than to be naïve about the predations of evil people.  Be safe out there.

About the Author

Brian Hallaq

My name is Brian and I have been a practicing attorney in Bankruptcy for over 20 years helping thousands of clients.  I have worked for the Chief Judge of the United States Bankruptcy Court for the Western District of Washington, as well as several small boutique Bankruptcy law firms handling Bankruptcy cases in Washington State and the State of California.  I have litigated for and against major banks, and I have recovered millions of dollars on behalf of clients in my career.


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