Grandparents' scam revisited and jury-duty fraud

During an interview with Gary Harper, the senior consumer and investigative reporter for KTVK-TV’s “3 On Your Side,” Irma Orozco, a Phoenix, Arizona, grandmother with a big family, recounted last summer how she’d recently received a telephone call from someone she thought was her adult grandson, Jack. She was so excited because her grandchildren seldom called because of their busy schedules. However, the person calling was a fraudster pretending to be Jack. He opened the conversation by saying, “I had a real bad accident.” Then another fraudster, who claimed to be Jack’s attorney, came on the line and told Orozco that she had to immediately come up with $7,000 bond money and deposit it in the fraudster’s Bank of America account. The fraudster called back and said he needed an additional $6,500; she dutifully transferred the cash.

Later that evening, Orozco called her grandson and asked if his attorney had received the money. Jack was befuddled. He said he knew nothing about “his attorney” or any money. They both realized fraudsters had ripped her off with the grandparents’ scam.

Targeting the elderly

The popular scam, which began about 10 years ago, is still claiming victims regardless of alerts from the media and government agencies. I’ve reported on this scam, but it’s important to address it again because fraudsters, of course, have devised a new-and-improved version that makes the voices of the targeted “grandchildren” even more believable.

The Scambusters website, in a Dec. 1, 2017, post, reports that most of us are now wise to this trick. “Except that now the scammers have found a way of mimicking the voice of the person who’s supposed to be in distress,” the site reports. “First, they obtain a recording of the person’s voice — often easily available in online audio postings — and then use modern technology to read the voiceprint from the recording. Then they make their call, feeding their own voice through a computer so it comes out ‘the other end’ sounding like the distressed person.”

How common is this scam? According to Michael Cochrane, reporting on the Motley Fool website on Sept. 14, 2017, the Federal Trade Commission (FTC) received more than 400,000 complaints about the grandparents’ scam in 2016. This might have been the “tip of the iceberg” because the majority of those victimized in scams don’t report them to authorities or media because they’re embarrassed.

Also, on Jan. 3, Jordan Bowen reported on the WDTN news website that Ohioans had lost more than $550,000 to the grandparents’ scam in 2017, including one person who was out more than $37,000.

Fraudsters have developed additional versions. For example, a crook will masquerade as someone on vacation, call a relative and say they need money to cover their expenses to return home because they were robbed of their credit cards and cash. Or, in another case I recently reported, a fraudster calls potential victims, whose names were included on a contact list stolen from the computer of a distressed “friend,” asking for money for some unsupported reason.

A fraudster also might call and ask for money to cover the bail for a drunk-driving charge. Instead of impersonating a grandchild, the fraudster might mention that they’re a doctor calling from a hospital on behalf of someone hurt in an accident or a lawyer calling from a courthouse to ask for a retainer to cover legal fees, etc.

All versions of this scam share common red flags to induce you to fall for the con. The fraudster:

• Will use alarming language, such as the grandchild is in “major legal trouble” to cause you to panic.
• Will beg you not to tell anyone about this embarrassing incident.
• Will glean information from social networks to appear to know information about you and other family members.
• Will ask that payment be made only by wiring money (it’s like sending cash, and, once you send it, you can’t get it back) or by putting money on a gift card, or loading cash on a cash reload card. These methods of payment are effective because they normally can’t be traced.

To protect yourself:

• Ask the distressed relative a question that might not be publicly known, such as “What are the names of your best friends or pets?” The odds are they’ll probably hang up, which proves the call’s a scam.
• Hang up immediately and call other relatives to confirm the grandchild’s location.
• Never send money to anyone until you’ve confirmed their location and situation from other relatives.
• Convene a family gathering to request that everyone eliminates all personally identifiable information (PII) on social networks that fraudsters could use.

Doing your (jury) duty while getting scammed

Louisiana native Beth Cenac was a librarian for 30 years. She held a master’s degree and was a savvy professional. However, Cenac lost $3,000 in 2017 when she became a victim of the “jury duty” scam, according to the federal United States Courts website. The scam began around 2005 but has recently emerged and escalated throughout the U.S.

Fraudsters, who pose as U. S. marshals, court employees or sheriff deputies, call random potential victims for missing jury duty, threaten to jail them unless they pay fines through electronic vouchers, or prepaid debit or credit cards.

The fraudster typically instructs the victim to immediately buy a money card at a convenience store, for example, and call back with the card’s information. The fraudster uses a disposable cellphone to avoid number tracing.

And here’s more bad news. When the fraudster thinks they’ve hooked you, they’ll ask you to verify your identity by soliciting your PII, including your name, birthdate, Social Security number, bank account number and other ID theft-worthy details. A double whammy!

Again, fraudsters attempt to cause panic to cloud victims’ thoughts so they make irrational decisions and pay the “fines.” In Cenac’s case, “she was fed lie after lie as the scammer used judges’ names and courthouse information for the U.S. District Court for the Middle District of Louisiana. The caller even created the illusion of an office environment, transferring Cenac to a ‘senior’ marshal. The hoax effectively scared her into believing the lie and agreeing to pay up.”

Beth hit the nail on the head (this applies to all scams) when she said, “I think most people go about their daily lives following the rules and when they receive a call without warning from an authority figure accusing them of a crime, they get scared and go against their better judgment. The focus quickly changes from spotting a scam to righting a wrong and clearing your name.” Unfortunately for Beth, her bank was unable to reverse the two transactions.

The United States Courts website reported these facts:

• A U.S. court will always send a jury summons by mail and will never demand payment or request PII via the phone.
• The court clerk’s office will contact you if you ignore a summons and might order you to appear before a judge.
• You’ll never get a fine until after you appear in court and have the opportunity to explain yourself.
• If you’re suspicious of a phone call, don’t give out any information, hang up and immediately call the clerk of court’s office of the U.S. district court in your area plus local law enforcement and the FTC.
• Impersonating a federal official is a federal crime with punishments of prison time and/or fines.

If you think you were conned, quickly call your bank and ask if it can reverse your transactions to the fraudster. Also, for this scam and all others, call the Identity Theft Resource Center toll-free at (888) 400-5530, visit its victim assistance page and file a complaint with the FTC.

Forewarned is forearmed

Please share this information with your business associates, family, friends and clients and include it in your outreach programs. These two scams are piling up victims and won’t go away soon. You’ve been forewarned, so tread with care!

Please contact me if you have any identity theft or cyber-related issues you’d like me to research and possibly include in future columns and feature articles or if you have any questions about this column or any other cybersecurity and identity theft issues. I don’t have all the answers, but I’ll do my best to help. Stay tuned!

Robert E. Holtfreter, Ph.D., CFE, CICA, CBA, is distinguished professor of accounting and research at Central Washington University in Ellensburg, Wash. He’s also on the ACFE’s Advisory Council and the Editorial Advisory Committee. Holtfreter was the recipient of the Hubbard Award for the best Fraud Magazine feature article in 2016. His email address is: doctorh007@gmail.com.