Financial Planning Tip March 2025

As Elon Musk has been dismantling the government, one of the unfortunate consequences is that there are fewer people looking out for consumers when it comes to fraud and scams. The FBI, for instance, has been intervening in cryptocurrency investment fraud, saving victims (as of last month) an estimated $285 million thus far. It’s the tip of a large iceberg, but helpful, nonetheless. Scammers know that the police are not on the beat now, and it’s increasingly up to individuals to keep themselves and their loved-ones safe.

The most serious and most costly scams, called “pig butchering” are rampant. They tend to target older or lonely Americans with significant assets, but all sorts of people have fallen victim. We recommend the recent New York Times article here: https://www.nytimes.com/2025/02/19/magazine/cryptocurrency-scam-kansas-heartland-bank.html.

There are things you can do to avoid becoming a victim. Here are a few best practices:

·         Don’t use social media. If you must, only connect with people you know and have met in person, and keep your profile private. Under no circumstances should you use WhatsApp to communicate with an unknown person.

·         Eschew online dating apps. If you do use them, assume anyone who won’t (or supposedly can’t) meet in person is a scammer.

·         Don’t respond to unsolicited messages.

·         Don’t buy or trade cryptocurrency. Cryptocurrency transactions are typically not reversible.

·         “Cant lose” overseas investment opportunities are not real.

·         If you’re the slightest bit unsure about anything financial, call us for a second opinion.

·         If you suspect you have been a fraud victim, call your financial institution, your local police, and the FTC. Let us know right away.

Last, but not least, protect your friends and relatives from these sorts of scams. Older or lonely people are particularly vulnerable. Dig deeper if they mention someone they met online or if they mention an interest in getting into cryptocurrency trading. These scammers are professional criminals. They do this for a living seven days a week and they have honed their techniques into actual playbooks for scamming Americans. They use very sophisticated psychological manipulation methods and are masters at exploiting people’s vulnerabilities.

That’s the bad news. The good news is that these scammers operate primarily from Southeast Asia. If you don’t talk with unknown people online, you can avoid being an easy target. Maybe it’s one more reason to put down the computer and join a book group or a bowling league!