A financial advice writer is drawing intense criticism and sympathy after revealing she was scammed and forced to put $50,000 in cash in a shoebox and give it to a stranger. But her story is far from unusual and falling for such scams is increasingly common.
Charlotte Cowles, a columnist for New York magazine, was led to believe she was a victim of identity theft and under investigation for federal crimes, and was forced to withdraw cash for living expenses before her bank accounts were frozen. Over the course of several hours on the phone, she was transferred to a scammer claiming to be from Amazon AMZN,
to one claiming to be from the Federal Trade Commission to one claiming to be from the Central Intelligence Agency.
He told his story in an article in which he highlighted how even a well-informed and “incredibly rational” person can become panicked by skilled scammers.
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 could take some important lessons from her story .
“For every person who called me an idiot in public, there was another who emailed me privately to tell me that a similar thing had happened to them,” Cowles said in a email to MarketWatch.
Last year, American consumers reported losing more than $10 billion to fraud, up 14 percent from the previous year, according to the latest FTC data. A significant portion, $2.7 billion, was lost to impostor scams like the one Cowles was involved in.
There were times during his experience when he felt something was wrong and questioned the criminals on the other end of the phone. “How do I know you’re not just faking all this?” she asked about the alleged FTC number used by the criminal. Yet she still complied with their requests.
MarketWatch spoke with privacy and identity theft experts about what to do if you find yourself involved in a transaction that you believe, somewhere in your gut, may not be legitimate.
1. Get away from the phone
It is essential to stop the adrenaline rush that causes people to make decisions based on impulse rather than reason. Get off the phone (politely, if it helps) and tell the person you’ll call them back after thinking about it.
The Cowles scam started with someone claiming to be from Amazon and checking for some suspicious activity on their account. He could have hung up the phone at many points and written in hindsight, “Were my tendencies toward people-pleasing, rule-following, and conflict-averse much worse than I ever thought?”
It can feel unnatural to stop interacting with people who are making an effort to get your attention, said James Lee, chief operating officer of the nonprofit Identity Theft Resource Center. One way to hang up the phone, he advised: “Say, ‘OK, you’re calling from Amazon, I’ll get back to you.'” You. Thank you so much for bringing this to my attention.’ This is the end of the conversation. There is no reason to go any further until you have verified that this is a real circumstance.”
The same goes for anyone claiming to be a relative or friend who urgently needs money, because there are now even programs that can clone entries and spoof phone numbers. Tell them you’ll call them back.
Take your time after. Breathe. Calm down and don’t rush.
2. Verify the identity of the caller
So, tell someone what’s going on. Don’t handle this alone.
“Scammers often try to isolate you by asking you not to talk to other people, and a request like that is a serious red flag,” said Michael Steinbach, global head of financial crimes and fraud prevention at Citi.
“In retrospect, 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 wanted to do. But these scammers were very effective in making me feel like I couldn’t tell anyone. I have since learned that this technique is known as “exit blocking.”
If it appears that a friend or relative is calling you for money, hang up and call them back from your phone at the number you usually use for them. Or find the real customer service phone number of the entity claiming to contact you. Ask if they have initiated contact with you about whatever the stated issue was.
Amazon said in a statement that customers should be wary of false urgency and “if you’re unsure, it’s safest to stop interacting with potential scammers and contact us directly through the Amazon app or website.” “Do not call numbers sent via text or email or found in online search results,” the company said. “Please remember that Amazon will not ask you to download or install any software to connect with customer service, nor will we require payment for customer service support.”
By making the call to a real and reliable phone number, you regain control of the situation. Cowles, on the other hand, was transferred from the fake Amazon agent to someone claiming to be an FTC investigator, who transferred her to someone claiming to be a CIA investigator.
These are not agencies that most people interact with, so it can be difficult to discern whether the interaction is suspicious. But there’s one important thing to know: These investigators won’t call you out of the blue, and Amazon won’t transfer you to a government agency.
After the story was published, FTC Chairwoman Lina Kahn She said in the post on X, “A reminder that no one gives @FTC will never give you a badge number, ask you to confirm your social security number, ask you how much money you have in your bank account, transfer you to a CIA agent, or message you out of the blue.
The FTC also offered guidance on when the agency would and would not contact consumers, saying, “The FTC will not ask for money, threaten you, or promise you a reward.”
Although tax scammers often claim to be calling from the Internal Revenue Service, the agency specifically states on its website that it “does not initiate contact with taxpayers via email, text message, or social media channels to request personal information or financial”. Generally, the IRS initiates contact “via regular mail delivered by the United States Postal Service.”
“If I’m really under investigation, someone will come to my house and show a badge and have documents. They don’t do it on the phone and they don’t text you,” said Mark Kapczynski, a privacy expert at OneRep, a company that removes customers’ private information from the web. If a scammer threatens to take action against you, “Wait until they show up at your door. They just don’t work that way.”
And while it may seem obvious, a government agency or law enforcement agency won’t pressure you to wire them money quickly.
3. Maintain zero trust
If for some reason you are still on the phone, maintain zero trust: hang up and verify with a legitimate, known entity at every stage. Scammers apply pressure and make you feel like you have to act immediately. Not you.
Every step along the way “is another opportunity to take back control and say, ‘I don’t know anything about this.’ I’ll have to get back to you,’” Lee said. Especially if these are entities you don’t do business with or people you’ve never spoken to before, requests for money are a huge red flag. Stop there.
Say, ‘I’ll find an independent person at my bank, at some other institution that I trust, and get them to tell me this is how it works,'” Lee said. The person on the other end of the phone may seem angry, but remember, his anger is not a real threat.
Cowles wrote about what he learned from this experience and shared his tips in a separate post.