How To Stop A Spoofing Fraud
As the phone rang, the caller ID said, “CenterPoint Energy.”
The caller said, “This is Adam Clayton with CenterPoint Energy. Is this Ruth?”
Ruth replied, “Yes, it is.”
“Ma’am we’re on a recorded line. This is Adam Clayton employee badge number 5569. In case we get disconnected, my phone number is 877-555-5555. I work in the Accounts Receivable Department at Centerpoint Energy.”
“Ruth, the reason for my call is we have not received your payment. This is a final courtesy call letting you know your electricity will be turned off at 5pm today.”
This interaction sent Ruth into panic. She couldn’t remember if payment had been made. Furthermore, with young children at home, Ruth couldn’t allow her electricity to be disconnected.
As Ruth asked what was needed, Adam smoothly calmed Ruth down. He told her she could transfer cash from her credit or debit card or via Zelle.
Although Adam said the overdue balance was $268, Centerpoint needed a deposit of $5,000 to go against the account until this late payment cleared. Adam assured Ruth it would be refunded within 30 days of payment being made.
Adam walked Ruth through the process to transfer $5,268 via Zelle.
As quickly as Ruth completed the transfer, she had a sinking feeling. She heard people laughing in the background. Adam’s phone went dead and the money was gone.
This is just one type of popular scam with several hallmark characteristics.
First, the incoming call was “spoofed,” meaning fraudsters made it look like it was coming from a reputable business or maybe from a person you know. Familiarity lets your guard down.
Secondly, they create urgency. Urgency creates panic and your ability to think logically is reduced.
Third, there is a request to transfer cash. However, it is in a manner in which once the transaction happens, there is no recourse.
Worse, it is not just a matter of spoofing a caller ID. Criminals have technology to spoof phone numbers, too. As such, if you do an online search to match that phone number, it appears legitimate.
Making the situation worse, criminals can spoof a person’s voice, if not their image, using the latest Artificial Intelligence technology.
As such, a criminal might call an elderly person and claim, “We have your granddaughter. She is being held for ransom. If you transfer money right now, we will let her go.” During this frantic interaction, the criminals play the spoofed sound of a young girl’s voice. It was digitally copied from a social media posting. Or, the image was copied and transposed into a “deep fake.”
The voice, or person, is screaming in terror.
Who in their right mind wouldn’t drop everything to rescue a loved one? As such, it is highly effective.
How do you defend against this?
First, be on alert. If you don’t recognize a phone number, send it to voicemail. That gives you time to listen to the message and calmly determine how to proceed.
Secondly, rarely is anything a panic requiring immediate action—especially requests for money. This should be a huge red-flag. Instead of acting fast, call a friend to calm you down and ask logical questions.
Anytime someone asks for money, ask lots of questions. Take notes and then hang up and tell them you’ll call back. In the meantime, independently verify the correct person or department that handles “Accounts Receivable at Centerpoint” or something similar.
If someone’s voice or image has been spoofed, start by asking questions only that person would know. Don’t just ask “yes” or “no” questions. Ask questions requiring detailed answers. Develop a family “safe word” no one outside the family knows.
Ask for something official in writing. Again, fraudsters are attempting to make things happen quickly. They don’t want to send anything that can be scrutinized.
If there is a claim that a loved one has been kidnapped or in an accident, get the details and then hang up. Immediately call that loved one just to see if they will answer. Also, call the police and get their assistance.
With artificial intelligence and cheap technology, these scams will become more common. As such, slow down. Ask questions. Never transfer cash. Independently verify claims. Call a friend to assess what to do before acting.
Dave Sather is a Certified Financial Planner and the CEO of Sather Financial Group, a fee-only strategic planning and investment management firm.