Intro: Royal Standley of Oregon Pacific Financial Advisors, offering security through United Planners Financial Services, member FINRA SIPC, guides clients with empathy in discovering and reaching their financial goals and creates financial plans for clients so they can live their life by design. In these episodes, he relates his financial insights and discusses timely topics.
Royal strives for excellence and has a passion for sharing his knowledge and supporting his community.
Royal Standley: Discussions in this show are for educational purposes only. Information presented should not be considered specific investment advice or a recommendation to take any particular course of action. Always consult with a financial professional regarding your personal situation before making any financial decisions. The views and opinions expressed are based on current economic and market conditions and FINRA. S I P C.
Advisory service offered through Oregon Pacific Financial Advisors, Inc. Oregon Pacific Financial Advisors and United Planners are independent companies. And neither Oregon Pacific Financial Advisors nor United Planners offers tax or legal advice.
Bill Tucker: And welcome to the Life by Design podcast with your host, Royal Standley. Royal, always good to be with you. What do you have for us this time?
Royal: Yeah, good to be here, Bill. Uh, so I thought today we would just spend some time talking about something that's coming up more and more, uh, which is talking about frauds and scams here that are happening across the country, coming in so many different forms and shapes that it can make your head spin.
Bill: It really can. And I have become so suspicious of emails that I get talking about certain products, talking about certain stocks that I...and literally, Royal, I am now, I am now skeptical of probably what are some very reasonable good emails. It's just that I'm, I'm on edge at this point.
Royal: Yeah. It really makes it hard for you to know who to trust and if you're talking to the person you think you're talking to.
So we're going to dive into this. I think it'll be a fun conversation, but hopefully also very educational to our listeners about ways you can protect yourselves from a lot of people who are just looking to separate you from your, your money and to do you harm.
Bill: They want your money. They do want your money. I would imagine that as a financial advisor that you must, regrettably, have some pretty horrible stories to share.
Royal: I absolutely do. The, the most interesting thing here from my perspective is if clients would just call before they do things, we could probably save them a lot of time and money. So we, we, we've had clients who have gotten caught up in lottery scams. Lottery scams or ones where you get an email or a phone call saying, Hey, you've won this money. You've won a million dollars or a hundred thousand dollars, whatever that number might be. All you have to do is prepay the taxes, just wire us, you know, $2, 000 to prepay the taxes and we can release the funds to you.
Bill: Whoa.
Royal: And there's no, there's no lottery winnings. These scammers are just looking to separate you from that fee that, uh, they are claiming needs to be paid up front for you to receive a much larger reward.
And so these scams really break, break down in a couple of different ways. But before we really dive into that, what I thought I'd do is just kind of talk about some of the statistics from 2022. These are from the federal trade commission.
Bill: Okay.
Royal: And I think it's fascinating just to give you a sense of how much this is growing. So in 2021 consumers lost $1.8 billion to investment scams. That number more than doubled in 2022 to $3.8 billion.
Bill: Wow.
Royal: In 2022, and these are only the reported frauds - there was 2.4 million fraud reports. Reported to the FTC for a total of $8. 8 billion lost. And it's just fascinating to see what's happening here.
Uh, social media, so scams that come through social media, so think Facebook. Instagram, that sort of thing, uh, accounted for $1. 2 billion lost, uh, that was the highest category there, but then phone calls - and I think this is, this is where, you know, especially my older clients who really don't do much online,
Bill: Yeah,
Royal: This is just a giant vulnerability. Is getting a phone call from someone claiming to be someone else. And whatever that story that's being told causes you to give up a credit card number or wire money or send money.
The median loss for a, uh, someone reporting a phone call scan was about $1, 400. So these are, these are real numbers and especially for a retiree living on a fixed income.
Bill: Yes. Yes.
Royal: Really hard to, uh, to overcome there.
Bill: No, I, I, I just was gonna say that you talk about this explosive growth and I, maybe you're gonna get into why I don't mean to get ahead of you, but why is this exploding like this?
Royal: Because it's working.
Bill: It's where the banks are. Is that what you're saying?
Royal: Exactly. It's, it's working.
Bill: Why do you rob a bank? Cause that's where the money is.
Royal: And it's becoming easier and easier to do with technology. The, the methods for learning about someone, all of our information is online. If you don't think your information is already out there on the internet or on the dark web, you're really probably fooling yourself.
Um, there've been so many breaches now that really all of our personal identifying information is, is for the most part already out there. You have technology and resources where these scammers can get all the information they need about you online. They can spoof the number that they're calling from. And...
Bill: What do you mean, spoof the number? What's that mean?
Royal: So basically they can come up with a number that they're calling you from and put on there,eyah, I'm calling from the IRS or I'm calling from the bank or I'm calling from the power company to basically provide just that next level of confusion to just provide more and more kind of senses of reality like, Oh, this is legit. I need to pay attention to this.
And with, with all of these things, it's becoming harder and harder for folks, that once they answer that phone and get caught up in the story that's being told to them, it's harder and harder for them to step back and step out of that.
And, and I'll be perfectly frank, I got caught up in one of these this year.
Bill: Ohhh?
Royal: I got a call on the way to work from the power company and it said power company on there. And they said, Hey, you're, you're delinquent with your Uh, with your payment and we're going to shut your, your, your power off today. And I was like, no, I'm just, I just paid the power bill. I see this, I see this. And you know, they transferred me a few times. They said, okay, no, we were showing that you missed these payments and these amounts. And I'm looking at my bank account and I'm just, I just didn't understand what was going on. And I was like, I can't have my, my power get turned off. You know, I'm a fairly successful financial advisor.
Bill: [laughter] Right!
Royal: This is embarrassing, right? And we kept going and going and finally the scammer got to the point of saying, Oh, well, this is how you pay your bill. You have to go into your bank account and inside of your bank, there's a service called Zelle, Z- E-L-L-E.
Bill: Oh.
Royal: And this is a new payment transfer system that most banks have adopted. And this payment system is one of the main ways I've seen scammers request payment from people.
Bill: Hmmm, okay.
Royal: And once they said that word, I knew that this was, was now a scam because the power company can accept credit card payments and checks and all these things. You don't, you don't need to send anything through Zelle or a wire transfer. And at that point I started to use a lot of profanity and swearing at the person and hung up on them quickly.
All: [Laughter]
Royal: But even for me with somebody who goes through trainings on this,
Bill: Yes.
Royal: It was just something that caught me at the right moment and got that hook in and if I hadn't known kind of what was going on, it's an easy way of doing it. So, you know, I'm 45 years old. I'm pretty tech savvy. I do a lot of this. I got teased relentlessly by my office about this.
Bill: I bet they did.
Royal: That's okay because it continues to teach me that lesson of when I think about my clients who are in their 70s and 80s having to deal with this, how difficult that can be.
Bill: The technology makes an old, old game easier is what I've sitting here thinking about because it's the con game. In the con game, there's nothing new about it. It relies on selling an idea that somebody wants to buy and sucking them into it and then getting them to do things that frankly, they wouldn't ordinarily do. Like you going. No, wait, I paid this bill. What are you talking about? Well, we're going to transfer you and boom, you've been sucked right into the, the, the, the, the play as it were.
Royal: Exactly. Exactly. So, what I thought I would do today is just take some time to go over some of the common scams that are out there.
Bill: Okay.
Royal: And kind of walk through ways you can protect yourselves and, and, you know, what people should be doing, uh, to protect themselves from this sort of thing.
So some of the most common ones out there right now, we talked about phone scams. You get a call from someone. If you get a call from someone and they ask for personally identifying information from you, like a date of birth, a social security number, a bank account just hang up the phone. If you are getting a call from someone like this, they are usually looking for information that they can use to collect your information, um, and begin creating a file on you, either to look for fraud, uh, or as a way of just getting their hooks into you.
So what I always recommend is if you get a call from, let's say the power company, a utility, your doctor's office, and you're not expecting that call, just hang up.
And, look up the number for the power company or the utility company or the doctor's office and call them back. Because when someone calls you, you can't always trust what it says there on the caller ID. You really have to make sure that you're talking to that organization or business that you think you are.
And the best way of doing that is hang up, call them back. Don't accept any numbers that you receive over the phone either. Meaning that. If you ask the person who's scamming you, oh, what number to call back on, they're giving you a, a, a phony number that's going to be called back into their system.
Bill: Yeah, yeah.
Royal: So that's where if you get a phone call and you're not expecting it, just hang up. And I think that's where a lot of people have just gone to just not answering the phones, period.
Bill: Which I don't, I don't answer a lot. I don't, if I, I'm, I will confess if I don't know the number that's calling my phone, I don't answer it.
Royal: Yeah. And I think that's, that's wise for most people.
Bill: Yeah. Leaves me wondering who called most of the time, but no, you're right. And I have, uh, I have been a victim of, of attempted scams over the phone where I. And I'm in this goes against my nature because I tend to be friendly. I just hung the phone up and then I was like, I wonder if it's right. So I went and it was, it was a credit card in this instance. So I just went to the back of my credit card and thought, let me call this number.
And they're like, no, we never made any phone call to your house.
Royal: Yep.
Bill: Boom. Problem was solved. And, and, and sometimes it is that easy, isn't it?
Royal: It really is. When someone calls you, all you have to do is hang up and call back to that legitimate number to find out if there really is an issue. Because I'm sure sometimes there is a legitimate issue they need to talk to you about, but in the vast majority of things, just don't pick up the phone. And never, ever give any personally identifying information to anybody calling you.
Bill: Yeah.
Royal: The other thing that we're seeing is, uh, text messages or direct messages online, both of those things, you just can't trust them, you know, especially with the way you can spoof someone's identity on Facebook or Twitter or X, you have to be very, very careful there.
Same with email scams. All of the, these things are being pushed out to you. If you're not expecting an email from someone or, you know, it's just a spam email, just start skipping over it. Just mark it as spam and move on. Most email services now, once you mark something as spam, will learn from that and begin, kind of learning that and shifting those, those emails directly into a spam folder. So you don't even have to see them.
The other one I had...
Bill: Yeah. But I have to tell you, Royal, you know, I get those emails all the time and it's upsetting when you get a bill, I, you get a bill, it says you owe this much money. You know, and I'm like, I don't remember buying this. I don't know what this is. And I'm, and, and, and I, who am now skeptical of everything, pause and think, God, do I, do I owe this money? And I've been tempted to respond and just didn't and it, served me well. But they're really, they're alarming and they do draw you in unexpectedly.
Royal: That's right. These scammers are good. They're trying to elicit an emotional response either operating off of fear you owe this money and we're going to come after you for it or greed. Here's a whole lot of money that you could make. All you have to do is send us a little bit of money and then you make a lot of money.
Bill: And you know, one of the tech scams that I recently heard about involves wrong numbers. Where someone texts you, right? You don't know the number, and they're like, Hey, Richard. And you're like, and people will be like, Nope, I'm not Richard. Wrong number. And then they engage you by getting back to you going, Oh, I'm so sorry.
And they engage you in a texting conversation back and forth. And they draw you in and people are drawn into giving away personal information to somebody they don't know and have never texted to ever before, which astounds me, but it happens.
Royal: Absolutely. Absolutely. Just whenever someone's trying to get information from you, you can just block them. You can not look at it.
The other thing with email and direct messaging, be really careful with links. If you don't recognize an email address and they have an attachment in there or a link to another website. Don't click it. You have to be so careful about the things that you click on, because what happens is, is, and I've had a few clients that have gotten caught up on this is what will happen is, is they will direct you to a website, um, or put a virus on your computer that will pull up a screen that says your computer's been compromised. Call this number to get it fixed.
And then once you call that number, you're going to be directed to open up your computer. So their technicians can go on and fix everything inside of your computer, which is really just a front for them to go in and wipe your computer of all the information on it. So they have access to everything that's on your computer. And then also. Escalate that from there saying, okay, well now you have to pay us $4,000 for fixing this.
And we just had one that happened recently where someone said, uh, someone dialed into one of these numbers and they were directed and told that, uh, everything that, uh, that they, uh, have has been hacked and they need to get all of their money out of the banks and for safe keeping, they just need to wire all of their money to this organization. And they're hold onto it until the hack's over.
Bill: Ohh.
Royal: And they were instructed - Don't tell anybody about this. Make up a story. Don't tell the banks about this because the banks are in on it. They don't want you to do this. And when you're dealing with somebody in their seventies and eighties who didn't grow up with computers and didn't grow up with kind of a healthy distrust of all of this,
Bill: Mm-hmm.
Royal: That fear of I'm going to lose all this money, I'm going to have to do this thing that's irrational to protect it, creates a situation where they're going to hurt themselves pretty badly.
Bill: It's, it's easy to forget that vulnerabilities, financial vulnerabilities in particular, really open us up to these kinds of scams and, the, the older you get, the more precious your savings and your money and everything become, and oddly and ironically, that creates a vulnerability for someone to say, Hey, hey, you're about to lose everything. Hey, this is bad. There's some bad stuff going on here. And, and, and people in your case, you know, they've got you, they've got a resource to reach out to it, but they don't because their instinctive reaction is to immediately reflexively think. Okay. Oh no, I can't, no, no, wow.
Royal: Yeah. And the, and the last one I'll just touch on here, the last type of scam are romance scams. And we're probably going to see this go up dramatically here with the advent of AI.
Bill: Oh, lord.
Royal: And how easy it is to have conversations with these chatbots.
Bill: Yeah.
Royal: A romance scam is where you get contacted online, usually through Facebook. Or something like that, you'll see a profile of someone and they will begin trying to integrate themselves into your life and try to create an emotional connection online. Could even be something where you talk to them on the phone.
And over time, what happens is there's a request for, hey, I just need some money to pay the rent. Hey, I just need this. I just need that. And they will over time, try to bilk you out of your savings, preying on your loneliness. And the need that we have for connection and all of it is just simply a scam.
So we want to be really, really careful and, and kind of evaluate things as we're moving into it to make sure that everything we're doing is on the up and up. And we're not creating a situation where we open ourselves up to a scam like this.
Bill: There is a documentary that's like flirting on the edge of my memory right now, and I think it's called Lies, Deceit, and the Internet.
Royal: Mm-hmm. Mm-hmm.
Bill: Which the, the whole point is that the internet has increased and facilitated the ability for false identity, for false representation, for creating realities that aren't real. And you're right, the AI only makes It even easier for that kind of thing to happen. So what do you tell your clients? How do you guide them in terms of avoiding these scams and being aware?
Royal: The, the, the biggest things I'm telling clients are, you know, don't answer the phone. Don't don't give any information to anyone. And if someone asks for them to send money to you, call me first.
And so let's just walk through kind of the top 10 tips because these are more general, but for me personally, I'm just encouraging clients to pick up the phone and let's have a conversation because what that can do is that can quickly cut through the nonsense because I am a third party that's not emotionally wrapped up in this situation. And I can say, Hey, yeah, this makes sense. No, this doesn't make sense.
So let's just kind of walk through just ways to kind of identify a scam. Uh, and what you can do after the fact.
So the first one is if it looks like this is an opportunity to make or save money, if a deal seems too good to be true, it probably is.
Bill: Yeah.
Royal: Um, we also see these in investment scams, wWre you get a hot tip from someone to invest money in a penny stock or a certain cryptocurrency. All of these things can be ways for people to lose money pretty quickly. So we always want to be careful when we're looking at investing, anything that's trading, you know, under a dollar. Um, that's, that's, you know, usually considered a penny stock.
Bill: Yeah.
Royal: We, we probably just want to avoid altogether. Because no one's, no one's calling around saying, hey, this is the best thing since sliced bread and you can make so much money without a hidden incentive. That's not how we invest money. Our investment philosophy is, you know, long-term track records, be in the market, over time you're going to build your wealth.
No legitimate broker is out there saying, hey, you give me some money and I'm going to double it in a week. Anybody who's doing that is selling something completely different, that's not going to benefit you.
Uh, the next one, someone you haven't met needs your help and money. And that's where the romance scam comes in. That's where you get an email from a nephew or even a child saying, Hey, I'm, I'm overseas right now. And I'm in jail or I'm in the hospital. Can you wire me a hundred, a $100, a $1,000, $10,000 to help me.
These things happen, and have been happening quite frequently as scams, just attempting to get into people's uh, good nature and say, oh my gosh, someone I care about or someone I'm connected to needs my help. Of course I'm going to help them.
The other big one is if there is a pressure to act quickly, if you get the sense that I have to do this today, otherwise I'm going to miss out. Um, on something, you know, a quick profit or something like that, or if I don't act today, something really bad is going to happen. Both of those are signs that can quickly tell you, let me call Royal, let me call somebody else and get their perspective on this. Because without that you can get caught up in that story and that's really what these scams are. They're stories.
Nobody says I'm going to get involved with a scam. What happens is, is we get involved with a story.
Bill: Yes.
Royal: And that story preys on what's important to us.
So the other way that you should always be looking at whenever someone is trying to scam you is if you're asked to pay it in an unusual or really specific way. One way is, ‘Can you go buy preloaded gift cards or debit cards?’ Um, we actually had this happen here in our office. Someone in our office got an email from me, saying, I'm in a meeting, I need-
Bill: “You” in quotes.
Royal: From me. Yeah. So if you looked at the actual email address it was a different email address, but where it said, uh, the name, it was my name.
Bill: Yes.
Royal: And this, this got sent out to employees and it said, Hey, I'm in a meeting. I need you to do me a favor real quick. Can you go out and buy four $200, uh, gift cards? I need these right away. And it was interesting because the, the employee came in and said, you wanted four of those gift cards, right? And I was like, what are you talking about? And he's like, yeah, you emailed me. You wanted four $200 gift cards and I was like, what? So luckily before he ran out to go do this, he came and talked to me first.
Bill: Thank goodness.
Royal: But, but the email is structured in such a way of saying, hey, I'm out of the office. Hey, I just need these real quick. Just go do it. And what happens is, is once you buy those gift cards. The folks on the other end of the email say, okay, send me pictures of the, the numbers on them. So now they can take that money right off of there very quickly.
The other ways we talked about Zelle, also wire transfers.
Bill: Okay.
Royal: Wire transfers should be very, very rare in most people, a lot of people's lives, they're probably going to do a wire transfer a couple of times, usually to buy a piece of real estate. And you want to be ultra, ultra careful whenever anybody says, use a wire to get me this money. The reason why is wires are extremely hard to stop and extremely hard to track.
Bill: Really? That's interesting.
Royal: Yeah, Yeah. And, and actually if you, if you bought in a house recently, you will see from the title companies. Because this is a scam that the title companies have had to deal with quite often is they say, here are our wiring instructions. These will never change because what was happening was, is scammers were reaching out to folks who had upcoming pending closings coming up and saying, Oh, you have a $90, 000 down payment. Here's the new wiring instructions.
Bill: Ohhh, ohhh.
Royal: And that sort of scam is extremely expensive and extremely hard to fight. So always, always, always use the utmost care when you're doing wires, because when you're doing wires, you're opening yourself up to a lot of risk. If you don't know exactly what's happening and where you're sending that money.
Bill: I would have thought a wire would be really easy to stop. I'm, I'm, I'm astounded on this side.
Royal: No, no. I mean, once, once the money goes out and a certain amount of time passes, it's kind of done.
Bill: Lesson learned. Lesson learned.
Royal: So this, this is where, you know, we, we just really encourage people to reach, reach out to us. If anything happens like this, let us help you. Let us be your guide through this. Uh, if you don't want to reach out to us, reach out to a trusted relative or friend. Don't be doing this on your own because there's this pressure that comes from these scammers to act quickly because you're going to miss out or you're going to lose something.
So I know we've, we've spent a lot of time here talking about these scams and what can happen.
The next question is, is, well, I've been scammed. What can I do about it?
So I think that, that there's not much in, in a lot of cases what you can do about it. Um, you can, you should report it. You can report it to the FTC. You can report it to your local police. Uh, go back to the financial institution you, you, you used. See what they can do about it. See what liability they have for allowing that to happen.
And then from there, it's really just being much more cautious going forward. And I personally really recommend to my clients get a service like LifeLock or one of these identity theft companies that can watch your credit reports, they can watch your information and just give you a little bit more sense of security when it comes to identity theft. Because oftentimes once you've gone through something like this, these scammers now have a lot of information about you and they will probably be brazen enough in many cases to go back to you in six months with a different story because it worked the first time.
Bill: Yeah. Yeah. It makes sense.
Royal: Yep. So with, with all that, my big, my biggest ask for people is give us a call if, if you're, you feel like something's moving too quick, hang up, give us a call and let us help you through this process. Because otherwise you're just opening yourself up to. A lot of financial loss, stress, worry, shame when it comes to these types of scams out there.
Bill: Yeah. Yeah. And don't worry about what the person on the other end of that phone call or the other end of that email might think of you because you terminated the communications and walked away from it because they're relying on you to feel badly about that and to not cut those communications off. So yeah, you're, you're dead on, Royal, dead on.
If people want to get in touch with you and reach out to you and talk to you more about this or get your ideas, how do people get in touch with you?
Royal: Yeah. Go ahead and visit our website at opfa. com or you can call our main office at (541) 772-1116.
Bill: That's fantastic. Thank you, Royal. This has been a really, really fascinating conversation and thank you listeners for listening to this podcast and I will remind you if you're a new listener, hit the subscribe button. That way you'll be notified when a new edition comes out. You won't have to go searching for it. You won't have to remember, Oh, I like that podcast, whatever happened to it, it gets delivered right to you and you can take advantage of that.
On behalf of Royal Standley and everybody at Oregon Pacific Financial Advisors, I'm Bill Tucker. Thanks again for listening.
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