Can you guess what the following situations have in common?

• You’re given an opportunity to travel to Europe with a famous actress.
• An investment opportunity presents itself where a greater than 20% return can be realized in 90 days.
• Someone is asked to coordinate multiple bank accounts in a charitable effort to raise money for someone in need who is essentially trapped in a foreign country due to health or legal circumstances.
• A romantic relationship has begun with an individual met through the internet, never meeting in person, but with the promise of coming to America once their financial issues are settled.
• A person makes a new friend who asks for a favor; to please open an account in a financial institution in the person’s name in another state, set up online banking services to deposit and disburse funds – through various means – on a regular basis and for a reason only the new friend understands.
• An individual is contacted by a government office, law enforcement agency, or utility company and is threatened with legal action for an unknown debt that must be satisfied immediately, typically to be paid in the form of gift cards.
• A special friend or relative asks an individual for a personal loan but instructs that individual to lie to their financial institution as to why such a large sum of money is being withdrawn, suggesting they use vague reasons such as “home repairs” or “medical expenses.”

All of the above stories are not uncommon. These have been reported by fraud professionals at financial institutions (banks and credit unions) as recurring scams. Anyone of any age or any financial standing can be susceptible to being drawn into these, and similar, scenarios.

The Federal Trade Commission (FTC) has reported that in 2024, American consumers lost $12.5 billion to scams. This was a 25% increase from 2023. The FTC also believes this amount is likely an underestimation, since many scams are not reported by the victims.

And that’s the challenge for financial fraud professionals and law enforcement: securing cooperation with those who have lost money. The losses are usually substantial – the FTC has estimated that an average of $2,600 is lost per incident. Fraud professionals have noted instances where individuals have lost tens of thousands of dollars and even depleted their life savings.

The Challenge

• Why are scam victims commonly resistant to explaining what has happened to them?
• What is it that scammers have told their victims that convinces these victims to lie to family members, financial institution representatives, or even law enforcement during the scam when there is a chance to stop or limit the financial damage?
• How do scammers – who in most instances have had little to no direct contact with the victims (as they work through the phone or the internet) – foster a greater sense of trust in their victims than these individuals have in family? Where a lifetime bond has been formed? Or their financial institutions, which are committed to the safety and security of their accountholders?

The Answers

Some victims worry about retaliation from the scammers if they report the incident, especially in cases where the scammers have obtained personal information or threatened them.

Young adults and seniors are common targets of scammers. When victimized, these individuals may be concerned that disclosing what has happened to their family members will result in the family attempting to exert more control over their finances going forward.

Some older adults may not be fully aware that they have been victims of a scam, or they may not know where to report it or who to contact for assistance.

Some victims might feel that reporting the scam will not lead to positive outcomes, either in terms of recovering losses or holding the perpetrators accountable.

Loneliness and lack of social support can make elderly individuals more vulnerable to scams in the first place, and also make it harder for them to reach out to help after being victimized.

Being scammed can be a deeply humiliating experience. Victims may lie to avoid the shame of admitting they fell for a scam, especially if it involved elaborate stories.

In some cases, scammers may coerce victims into illegal activities, such as money laundering, participating in fraudulent schemes or acting as money mules.

Some victims become so deeply entangled in the scam that they continue to believe a scammer’s lies even after reporting the incident. They may lie to their financial institution to maintain the illusion that they will eventually recover their money or that the situation is not as bad as it seems.

Victims may lie to protect their family and friends from the embarrassment or shame of knowing they were scammed.

Disclosing a scam does not always result in the recovery of lost funds. However, no one – not family, not a financial institution, not law enforcement – can even attempt to help if they are not aware there is a problem. Scam victims are encouraged to turn to family members the first time contact with a potential scammer is made. 

Further, if any actions are made within your own financial accounts, talk to your financial institution before sending funds out. Your financial institution welcomes the opportunity to provide assistance in safeguarding your assets and has trained professionals who are on the watch for potential fraudulent events.

Act early in calling out scenarios you encounter, like those discussed in this article (or others where someone you have known only a short time seeks to gain access to your banking information). Letting your financial institution know about such interactions maximizes the chance that action can be taken in order for you to avoid a financial loss. Hiding facts and circumstances from your financial institution about activity you have been encouraged to undertake by others will only end in heartache and loss for you.