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How fraud examiners protect loved ones from fraud

While fraud examiners are hard at work keeping their organizations safe from scammers and other criminals, they must also think about how their loved ones can fall victim to fraudsters’ wily ways. Here we interview CFEs about how they keep family and friends safe.

Valerie Scarantino, CFE, didn’t think her family would ever confront a scammer, but that’s what happened when her mother received an unsettling call from someone claiming to be with the IRS.

“Valerie, there’s something wrong with the taxes,” her mother said with a tinge of panic in her voice. “The IRS just called and said there’s something wrong with the taxes.” The caller told her she’d lose her driver’s license if she didn’t pay $3,000. As a CPA, Scarantino had been preparing her mother’s taxes for years and knew what she owed the government. The senior ethics and compliance manager for energy supplier UGI Corporation also knew the IRS wouldn’t confiscate a driver’s license. It had to be a scam.

Luckily, her mother didn’t acquiesce but said they’d need to talk to her daughter. Scarantino jotted down the number and instructed her mother not to answer the phone if they called again. With a suspected scammer’s number in her possession, Scarantino waited until lunch, and then decided to pick up the phone.

“I never expected them to answer. I thought I’d get a busy signal or a dead number. But someone answered,” Scarantino tells Fraud Magazine. The voice on the other end of the line said he was an IRS agent, and her mother hadn’t given the federal agency appropriate information for three years and now owes $3,000. If she didn’t wire it right away, he’d call the police. Scarantino played along and told him that as the tax preparer she’d need to look up those years. But then he threatened he’d call her mother again for the money, and that’s when Scarantino let him have it.

“I said, ‘Shame on you. How would you like it if someone did that to your mother? Don’t you dare call her. I’m going to report you,’ and he hung up,” Scarantino recalls. The admonishment seemed to do the trick, and they never heard from the scammer again.

Anyone can be a victim of fraud, and that includes fraud examiners’ family members as the above case of the fake IRS agent illustrates. Certified Fraud Examiners like Scarantino are aware that they often must protect their loved ones from fraudsters who prey on both young and old right in their very own homes. Here we talk to CFEs about how fraud has impacted their personal lives and the strategies they deploy to keep their family and friends safe.

Teaching kids about fraud

Fraud examiners say that raising awareness is essential to protecting loved ones, and they start the training early.

“Fraud has always been something interwoven naturally into the conversations we have, whether it’s me talking about an interesting article I read or talking about internet safety, or just talking about right and wrong and general ethics, and the line between cheating and lying,” Andi McNeal, CFE, says about discussing fraud with her three teenagers.

The ACFE’s vice president of education realized her efforts paid off when her son, then in fifth grade and around 10 years old, described a school friend’s dubious candy-selling operation.

“My son said it sounded like fraud because ‘he was taking money that didn’t really make sense and giving it to somebody else to get more money later,’” McNeal recounts. “He was describing a Ponzi scheme; he didn’t know the word Ponzi yet but recognized it wasn’t on the up and up.”

Deepak Pall Singh, a regional compliance and business improvement manager for mining company Omya Asia Pacific, and Kathryn Wilson, CFE, a senior manager in the government and public-sector group at accounting and advisory firm CohnReznick, each have their own approaches to deploying age-appropriate fraud awareness techniques with young children in their separate families. Wilson teaches her 6-year-old daughter foundational lessons about ethics and why it’s wrong to lie. Singh, an associate member of the ACFE, uses playtime for anti-fraud lessons, where a game of chess might turn into an anti-bribery session as he offers to buy his nephew’s pieces and explains why they shouldn’t accept his proposal. Natalie Iwasa, CFE, a CPA in Hawaii, says she used to show phishing emails to her young sons (now in their 20s) so they could see the red flags that made those emails suspicious.

As children get older, it’s just as important to keep raising awareness about fraud, such as reminding young adults to apply for jobs directly with companies instead of responding to opportunities posted on social media to avoid the many job scams proliferating on those sites. Monica Meeks, CFE, a financial services investigator for the state of Tennessee, is concerned her 17-year-old son, an avid gamer, will fall victim to one of many cryptocurrency scams currently plaguing online gaming apps. (See “ FBI Warns of Crypto-Stealing Play-to-Earn Games,” by Phil Muncaster, infosecurity, March 10, 2023.) Meeks says she frequently cautions her son about the drawbacks of cryptocurrency such as its lack of regulation and popularity with fraudsters.

Spreading the word

Yet it isn’t only CFEs’ immediate families that require anti-fraud advice. Fraud examiners say they speak up when they see friends and relatives engaging in risky behavior. They warn aunts to avoid posting vacation plans on Facebook and caution friends about payment apps Venmo or Zelle.

... educating friends can help them pass the word to others and potentially save someone ...

- Jennifer Amaya, CFE

Jennifer Amaya, CFE, an associate director for UBS in New Jersey, says that talking about frauds with her friends is an opportunity for them to spread the word. “Without disclosing confidential information about my cases, I find that educating friends can help them pass the word to others and potentially save someone from becoming the next victim,” Amaya says.

Raising awareness among family and friends isn’t always simple; some fraud examiners acknowledge they have an easier time getting a point across in their capacity as experts on the job. Indeed, personal relationships can be complex; friends don’t always want to hear investment opportunities are too good to be true. A widower father might think his adult child’s warning about a budding online romance is overstepping boundaries. Here are some tried-and-true fraud awareness tactics from CFEs that could help ease discussions.

Consider the relationship. Some fraud examiners say they consider their relationship with a person when gauging how to approach a discussion. For example, Wilson says she can be blunt with her sister. “If it’s with my sister, I can just come out and say it.” McNeal says she’ll take a gentler approach with her mom. “I end up saying, hey because I think of this stuff day in and day out as part of my job, I just want to make sure you’re aware of some of the things I know of,” explains McNeal.

Keep it casual. Wyatt Varner, CFE, an internal auditor for a Virginia school district (and Kathryn Wilson’s brother), says he slips information about frauds into casual conversations to avoid sounding like he’s lecturing. “I feel like it comes across better than saying, ‘Hey, don’t do that.’” Instead, Varner says he might bring up an interesting article he read and relate it to the discussion.

Ask, “What would you do?” Amy Nofziger, CFE, director of victim support for AARP’s Fraud Watch Network, suggests presenting an article about a fraud as a prompt and then asking how they’d handle the situation. For example, show an article to a parent about a grandparent scam, in which a fraudster usually calls late at night posing as the victim’s relative experiencing a crisis and says they need money immediately. And then ask, “What would you do if Johnny called and said he was in trouble with the law?”

Send a note. You don’t have to be in person to warn relatives and friends. Phillip Van Gavree, CFE, a senior manager in CohnReznick’s government and public-sector group, says he sends his parents articles about current scams to raise their awareness in a nonthreatening way.

Just listen. Melissa Martone, CFE, a government employee, says she gets positive reactions because she tries to listen more than she talks. “I don’t have these conversations to say, ‘I’m a CFE, and I know all about fraud, so listen to me.’ I have conversations to listen. You hear more about what is going on in their lives, so when you do give them advice, it’s more of a conversation,” Martone says.

Generational differences

Whether protecting children or parents (or both), fraud examiners have their work cut out for them. Indeed, fraud affects all ages, albeit in different ways. According to the U.S. Federal Trade Commission (FTC), older adults might experience the greatest losses from fraud, but it’s the younger ones — Gen Xers, Millennials and the Gen Z set — who are more likely to report they lost money to fraud. (See “Who experiences scams? A story for all ages,” FTC, Dec. 8, 2022.)

Peter Warmka, CFE, cybersecurity consultant and former CIA intelligence officer, explains that young adults are especially vulnerable to fraud because of their internet use. “Young people are generally much more active online than their parents. They freely share personally identifiable information [PII] about themselves on their profile pages and in online messaging,” says Warmka. “It’s a perfect venue for fraudsters and other criminals to create fake profiles to contact and engage with them.”

For his own online safety, Warmka generally doesn’t accept invitations to connect on social media unless he’s met the person in real life. If he makes an exception to the rule, he analyzes the profile to determine its authenticity. He considers whether the background information and posts in the profile appear logical or if there are any other red flags that only raise more questions. Warmka then might search for the person on Google. If his search only yields the same social media account, he suspects it’s a fake profile. He also conducts a reverse-image search of the profile picture. An image that appears anywhere else under a different name is a definite red flag.

Amaya used the reverse-image search to show her brother that his prospective online partner was a fraud. “It was sad to see him disappointed, but I’m happy I could help him cut that fake online relationship.”

Protecting seniors

When the pandemic hit in 2020, Van Gavree found himself dividing his time between his home in Bethesda, Maryland, and working remotely at the house of his aging parents in Pennsylvania. Van Gavree took advantage of the time he spent with his parents to fortify their home against fraud.

“It was a really good opportunity for me to take a look at their computers, make sure they have the right security settings on their phones, make sure they’re not sharing too much on social media so people can steal their PII and bring attention to the types of scams that are out there,” he tells Fraud Magazine. Besides strengthening their defenses against cyberattacks, he also bought them a high-quality paper shredder so they could get rid of credit applications and old checks. He’s even ensured that there are limits on their checking accounts, so if someone steals their checkbook, they’re not taking everything.

John Schwartz, president of the Center for Combating Elder Financial Abuse, might describe what Van Gavree did for his parents as “hardening the target.” That means assessing what parents might need that will make them an unattractive target for a fraudster. Schwartz looks at it from the predator’s perspective. An active couple in their mid-60s, who get out to play golf, and have frequent visits with friends and family aren’t going to be attractive targets for a fraudster. A social network provides a layer of protection from fraudsters who can better manipulate victims isolated from friends and family. Someone in their 80s who lives alone and 500 miles from family is going to be the perfect victim for a fraudster. The assessment is a starting point for families to discuss what they should do to lessen an older parent’s risk.

“So, start the conversation there. Hey, maybe we need to start seeing mom more often. Hey, maybe we need to have mom come stay with us,” says Schwartz about how siblings might discuss better ways to protect their parents. “I would make sure I was visiting. If I was only visiting them two times a year, I’d increase that by at least one more visit, preferably two. A little bit of presence goes a long way. You never know if a predator’s driving by your mother’s house. But, if they see me out mowing the lawn, they’re going to say, no, not that house.”

Elizabeth Loewy, now co-founder and chief operating officer of financial monitoring platform EverSafe, says that one of the biggest lessons she learned from her days as chief of the Elder Abuse Unit in the Manhattan District Attorney’s Office was the importance of having a team in place to keep an eye on the finances of older family members.

“We received just as many elder fraud referrals from the senior victim’s family members as we did from financial institutions,” says Loewy. “[That’s] because, from my vantage point, it’s far more likely that an adult child, or someone close to the senior, who sees them regularly, may sense that there’s something wrong [with their finances] before that case is identified at a bank or a firm.”

Loewy knows a thing or two about such cases. She prosecuted the high-profile Brooke Astor financial abuse case. The heiress’s son, who managed her finances when she suffered from Alzheimer’s disease, was convicted of stealing her money. (See “Anthony D. Marshall, Astor Son Who Was Convicted in Swindle, Dies at 90,” by Robert D. McFadden, The New York Times, Dec. 1, 2014.)

Another tool that can help older parents fight fraud is what Nofziger calls a “refusal script.” Many older adults are conditioned to answer the door if the doorbell rings or immediately pick up the phone if it rings, explains Nofziger. A refusal script is a written reminder you might stick on the back of the door to think twice about certain actions.

“It’s verbiage that says, ‘I don’t have to do business over my door; just leave me information,’” Nofziger says. “Same with the phone. Have a piece of paper by the phone that says, ‘Remember, mom and dad: Don’t give out your PII, credit card or Social Security, and Medicare numbers.’”

Nofziger even suggests a script reading: “If anyone calls you and asks for your credit card number, tell them you don’t give out PII over the phone until I talk to my daughter (or son), who’s a Certified Fraud Examiner.”

Working it out

Fraud can leave victims with more than financial hardship. They can experience a maelstrom of emotions, such as anger and shame. Fraud happens to the best of us; being taken advantage of can make us question our judgment. (See “Financial Fraud Crimes,” United States Attorney’s Office, District of Alaska and “Column: Scam victims may feel stupid. And ashamed. And that’s perfectly normal,” by David Lazarus, Los Angeles Times, April 2, 2021.)

Fraud examiners who help loved ones have even bigger responsibilities than just persuading them to report the frauds or calling credit card companies and banks. They must consider their loved ones’ raw emotions. And in the case of a romance scam, they might be helping someone with a broken heart. Handle with care.

“I’ve developed over the years a nonjudgmental approach. Just listen to how it happened. [You say] ‘Why it happened is not relevant to me, all right? Are you OK? What can we do to help you? I’m not here to judge you.’ And it works,” says Stephen Pedneault, CFE, CPA, principal at Forensic Accounting Services, LLC, in Manchester, Connecticut.

Pedneault, who authored a book about managing client emotions during investigations, helped his mother-in-law cope with the emotional toll of fraud. (See “Managing Client Emotions in Forensic Accounting and Fraud Investigation,” Wiley, 2021.) Last fall, his mother-in-law was the victim of a phone scam in which fraudsters had her buy gift cards to fix a supposed problem with her Bank of America account. They stayed on the phone while she ran around to stores, buying the gift cards and reading the card numbers to the scammers. Three hours later, she was $1,800 short. Pedneault helped her cancel some of the cards and recoup $400. He also prepped her for the feelings she’d experience in the days and weeks to come.

“I told her, you’re going to go through the stages of grieving, and by tomorrow you’re going to be really, really mad. And she was very angry, and they tried calling her again and again,” Pedneault recalls.

Other fraud examiners who’ve offered a comforting shoulder for fraud victims say it’s important to be gentle and let them know they aren’t alone. If you’ve been a fraud victim yourself, opening up about your own experience can be a powerful tool. When Meeks talks to people who’ve been victimized, she recounts the time she fell for a Facebook scam. “I always use myself as an example so people don’t feel so embarrassed that they’ve been taken advantage of,” says Meeks.

Nofziger says that fraud examiners need to think beyond solving the transactional problems of the frauds and consider the emotional side. “Regardless of who is telling you their story, you always start the communications with kindness and empathy. The judgment, the questioning, the accusations, none of that is going to help keep the lines of communication open when they feel they’re being judged,” she says.

Schwartz advises that no matter what, never blame the victim. “The criminal has made a conscious decision to commit a criminal act,” he says. “Never blame the victim because the predators, they’re superb; don’t underestimate them. They’re very talented. They’re experts at it. Anybody can be duped, so approach from the angle that hey, this was not your fault, and now that we’ve learned lessons, now let’s see what we can do to protect you.”

Jennifer Liebman is assistant editor at Fraud Magazine. Contact her at Jliebman@ACFE.com.