A financial advice writer has drawn both criticism and sympathy after revealing she was scammed into putting $50,000 in cash in a shoebox and giving it to a stranger. But her story is not at all unusual, and falling for such scams is becoming increasingly common.
New York magazine columnist Charlotte Cowles was tricked into believing she was a victim of identity theft and under investigation for federal crimes, and was pressured to withdraw cash for living expenses before her bank accounts were frozen. Over the course of several hours on the phone, it was transmitted by a fraudster claiming to be from Amazon AMZN.
To someone claiming to be from the Federal Trade Commission to someone claiming to be from the CIA.
She told her story in an article that highlighted how any knowledgeable and “insanely rational” person could fall for the panic stoked by skilled fraudsters.
After X users criticized Cowles and questioned her authority as a personal finance writer, she deleted her X account. But experts say that instead of criticizing the victim, the public can learn some important lessons from her story.
“For every person who called me an idiot publicly, there was another person who would email me privately to say something similar had happened to them,” Cowles said in an email to MarketWatch.
Last year, American consumers reported losing more than $10 billion to fraud, according to the latest figures from the Federal Trade Commission, a 14% increase from the previous year. A large share, $2.7 billion, was lost to imposter scams like the one involving Cowles.
There were moments during her experience when she sensed something was wrong, and she interrogated the criminals on the other end of the phone. “How do I know you're not just plagiarizing this?” I asked about the alleged FTC number the criminal was using. However, she still complied with their requests.
MarketWatch spoke to privacy and identity theft experts about what to do if you find yourself involved in a transaction that you feel, somewhere deep down, may not be legitimate.
1. Leave the phone
It is necessary to stop the flow of adrenaline that leads people to make decisions based on impulse rather than reason. Step away from the phone — politely, if it helps — and tell the person you'll call them back after you think about it.
Cowles' scam started with someone claiming to be from Amazon checking out some suspicious activity on her account. She could have hung up the phone at several points and written in hindsight: “Were my tendencies toward people-pleasing, rule-following, and conflict-aversion much worse than I had ever thought?”
It can feel unnatural to stop interacting with people who are trying hard to get your attention, said James Lee, chief operating officer of the nonprofit Identity Theft Resource Center. One way to end a call, he advised: “Say, ‘Okay, you're calling from Amazon, and I'll call you You. Thank you very much for bringing this to my attention. This is the end of the conversation. There is no reason to move forward until you are sure that this is a real circumstance.
The same goes for anyone claiming to be a relative or friend who needs money urgently, as there are programs that can clone voices and fake phone numbers now too. Tell them you will call back.
Take your time then. breathes. Calm down and don't rush.
2. Verify caller ID
Next, tell someone what's going on. Don't deal with this alone.
“Scammers will often try to isolate you by asking you not to talk to other people, and such a request is a big red flag,” said Michael Steinbach, global head of financial crime and fraud prevention at Citi.
“Looking back, there are a million things I wish I had done differently,” Cowles told MarketWatch. “I think the most effective thing anyone can do if they're in the middle of a bad situation is to tell someone they trust what's going on. More than anything, that's what I wish I could do. But these scammers were very effective in making me feel like I couldn't Tell someone. I have since learned that this technique is known as “blocking exits.”
If it sounds like a friend or relative is calling you to get money, hang up and call them back from your phone at the number you normally use for them. Or find the real customer service phone number of the entity claiming to contact you. Ask if they have started contacting you regarding whatever the problem mentioned may be.
Amazon said in a statement that customers should be wary of false solicitation, and “if you are at all unsure, it is safest to stop engaging with potential scammers and contact us directly through the Amazon app or website.” “Do not call numbers sent via text message, email, or found in online search results,” the company said. “Remember, Amazon will not ask you to download or install any software to communicate with customer service, nor will we ask you to pay for any customer service support.”
By initiating contact with a real, trustworthy phone number, you take back control of the situation. On the other hand, Cowles was transferred from a fake Amazon agent to someone claiming to be an FTC investigator, who in turn turned her into someone claiming to be a CIA investigator.
These aren't agencies that most people interact with, so it can be difficult to tell if an interaction is suspicious or not. But there's something important to know: These investigators won't call you out of the blue, and Amazon won't turn you over to a government agency.
After the story was published, FTC Chairwoman Lena Khan He said In a post on X, “Reminder that no one from @FTC He'll give you a badge number, ask you to confirm your Social Security number, ask you how much money you have in your bank account, refer you to a CIA agent, or text you out of the blue.
The FTC also offered guidance on when the agency will or won't reach out to consumers, saying: “The FTC will not ask for money, threaten you, or promise you a reward.”
While tax scammers often say they are calling from the IRS, the agency specifically says on its website that it “does not initiate contact with taxpayers via email, text, or social media channels to request personal or financial information.” Generally, the IRS initiates communication “through regular mail provided by the United States Postal Service.”
“If I was really under investigation, someone would come to my house and show a badge and get papers. They're not doing it over the phone and texting you,” said Mark Kapczynski, a privacy expert at OneRep, a company that scrapes customers' private information from the web. If a scammer is threatening to take action against you, “Wait until they show up on your doorstep. They don't work that way.”
Although it may seem obvious, the government agency or law enforcement will not pressure you to transfer money to them in a hurry.
3. Maintain zero trust
If you're still on the phone one way or another, maintain the zero trust: hang up and check with a legitimate, known entity at every stage. Scammers put pressure on you and make you feel like you have to act immediately. It was not.
Every step of the way “is another opportunity for you to take back control, and say, ‘I don’t know anything about that.’ “I’m going to have to get back to you,” he told me. Especially if these are entities you don’t deal with, or people you’ve never talked to before, Requests for money are a big red flag. Stop there.
“I'll look for an independent person at my bank, at another institution I trust, and ask him to tell me this is how it's done,” he told me. The person on the other end of the phone may appear angry, but remember that their anger does not represent a real threat.
Cowles wrote about what she learned from the experience and shared her own tips in a separate post.
