92-Year-Old Victim Of $40k Scam Required To Sign NDA Before Bank Attempts Recovery
While you may get the impression from the headline that everyone is piling on a feeble 92-year-old man scammed out of nearly $40,000 of his life savings, the bank’s behavior, though not 100% customer-friendly, is not as callous as you might think. Before we explore the bank’s reasons for requiring a non-disclosure agreement before helping their customer, let’s talk about what got him into this mess.
Financial elder abuse on the rise
By way of a little background, financial elder abuse is the most common and fastest-growing form of abuse aimed at seniors. However, according to estimates, only one in 44 victims report the crime. According to studies, losses were conservatively estimated to be $3 billion in 2011, rising to $36.5 billion in 2015. According to AARP, the average loss by a victim of financial exploitation is $120,000.
While most financial abuse is perpetrated over time by family members or people known to the senior, scams by strangers, though less frequent, strike quickly and can result in larger financial losses. In the case (reported by the Wall Street Journal), despite being warned by his family not to answer his phone due to scam calls, the elder in this story, who’ll we’ll call Mister E., did so anyway. Using the phony computer repair scam (see below), the caller claimed to be with a computer security service, stating that the company had renewed the man’s software subscription and charged his card $39.90.
Mister E. knew that he didn’t have a contract with the repair company named and gave the scammer his bank information so that his money could be refunded. When Mr. E checked his account to see if the refund had gone through, the scammer appeared to have deposited $39,920 into his account.
Mr. E offered to return the excess money and went to his local Bank of America branch to complete the transaction. The teller asked him if he knew the person he was sending the money to. He said he didn’t, but trusted them.
After Mr. E’s wire transfer processed, the scammer’s initial deposit had been canceled. Instead of returning a deposit made in error, Mr. E had transferred nearly $40,000 of his savings. However, after filing the claim, Bank of America refused to take any action unless a non-disclosure agreement was signed by Mr. E.
Taking it to the bank
Now, let’s talk about why Bank of America insisted on a non-disclosure agreement before taking any action to recover the money.
According to attorneys, some banks ask customers to sign confidentiality agreements because they don’t want to raise the expectations of other customers who may have heard about another’s case, since the successful return of money is not always guaranteed. Another reason is to protect the bank from false claims by scammers.
Not all banks respond the same way
- According to a spokesman for the Bank of America, the bank immediately takes steps to recover money and support clients as soon as it is notified of a scam. BOA typically asks customers to sign confidentiality and indemnification agreements.
- JP Morgan Chase & Co. does not require an NDA. The bank will investigate and try to resolve customer scam complaints without an agreement, but may require a release if the bank and customer reach a financial settlement.
- A spokeswoman for Wells Fargo & Co. said the bank doesn’t have customers sign non-disclosure agreements in connection with filing a fraud claim or the bank responding to such a claim, but will not publicly discuss their anti-fraud strategies.
- Citigroup Inc. doesn’t require an NDA when it tries to recoup funds the person has sent to another bank. When the receiving bank asks Citi to sign an indemnity agreement to recover the person’s funds, Citi typically asks its customer to sign a similar contract to retrieve the money.
Billions of robocalls have bombarded Americans with no end in sight, despite the efforts of lawmakers to stop them. Scammers have bilked the public, and in particular seniors, out of untold sums by pretending to be IRS representatives, health-care providers, computer repair services, government officials, and others.
Spoofing is a phone technique that causes your phone to display false caller ID and/or phone number. Here’s where it gets difficult. Most forms of caller ID spoofing are legal. If no harm is intended or caused, spoofing is legal—which is why robocalls are so hard to stop. Spoofing can be useful if you want to maintain your privacy in situations that could compromise you. The only circumstance in which spoofing is illegal is if it has the intention to cause harm in some form.
The bank account security scam
While there are different scenarios adopted by scammers, spoofing endeavors to fool you into providing personal banking information. Let’s say you receive a call from someone pretending to be from your bank. To help win your trust, caller ID shows the name of your bank or a phone number you may recognize as being from your bank.
To encourage your cooperation, the caller preys on fear. They tell you that someone is attempting to access your account or are trying to use your debit/credit card. Under the guise of helping you to secure your account, the caller requests personal information, such as your social security number, account numbers, username and password for online banking, answers to online security questions, one-time passcodes, etc.
Computer tech support scam
Similar to the approach used in the story above, tech support scammers may call and pretend to be a computer technician from a well-known company. They attempt to convince you that your device is infected with a virus or malware, putting your personal information at risk. They use scare tactics to get you to pay for services you don’t need for problems that don’t exist.
How the tech support scam works
You receive an unsolicited phone call, email, or computer pop-up warning that your computer is infected with a virus or malware. Pop-up windows often have logos from trusted companies or websites. Some pop-up windows may lock your browser, trying to convince you that you won’t be able to use your computer unless you immediately call a toll-free number for technical assistance. (Real security warnings will never ask you to call a phone number.) Other pop-up messages ask you to click a link to get technical help or security software.
If you call the “toll-free” number or click the link, you will be asked to pay for tech support or other services by credit/debit card. Tech scammers often ask you to pay by wiring money, putting money on a gift card, prepaid card, cash reload card, or using a money transfer app, such as Zelle*, because they know those types of payments can be hard to reverse.
Alternatively, you may be asked to allow remote access to your device to run diagnostics tests, which will cause your screen to go blank. If you have sensitive personal information stored on your browser, giving remote access makes it vulnerable to theft.
In both schemes, the tech scammer is trying to trick you into providing your personal and/or account information to access your online banking account to conduct fraudulent transactions.
* Zelle is a fast and easy way to send money over the Internet
Can you hear me now?
This simple phrase can turn into your worst nightmare. One particularly heinous trick used by telemarketers selling products or services (some imaginary) is to speak unintelligibly into the phone, as though you have a bad connection. When you tell them you can’t hear them, they will fidget for a moment and then ask if you can hear them now. The scammers record these calls, so when you answer that yes, you can hear them, they will use the recording of your voice saying “yes” edited into a dialog so that it sounds like you placed an order and confirmed it.
The word “no” can also be similarly used against you. For example, a phone scammer may ask you if you want to renew a subscription you never signed up for. The edited dialog will state that you were asked if you wanted to cancel your subscription and your voice will be on record saying, “no.” Once your voice is used in this fashion, it’s very difficult to prove you’ve been had and get justice.
How do you stop phone scammers?
To begin with, apps that block calls are only helpful to approximately 31% of users (according to a Consumer Reports national survey). 30% say they’re helpful for a while, but call volume eventually resumes; and 35% report the phone blocking apps are never helpful. Putting yourself on the National Do Not Call Registry is of no use since scammers ignore it (they are criminals after all). Keep in mind that advances in technology aimed at blocking scammers will only result in their increased efforts to circumvent defenses. After all, their ill-gotten gains depend on getting through to you. And therein lies the best defense: Don’t let scammers get through to you verbally or emotionally.
Some “Don’ts” to prevent phone scams
- Don’t click on any links or call a phone number
- Don’t send any money or make a wire transfer
- Don’t pay with a gift card
- Don’t give anyone your bank account, credit card, or other payment information
Additional tips for self-protection
- Never allow remote access to your device from an unsolicited source
- Do not save your online banking credentials (user name or password) in your browser
- Keep all passwords, PINs, and one-time passcodes secret
The following is quoted from the Federal Communications Commission’s (FCC) website:
You may not be able to tell right away if an incoming call is spoofed. Be extremely careful about responding to any request for personal identifying information.
- Don’t answer calls from unknown numbers. If you answer such a call, hang up immediately
- If you answer the phone and the caller—or a recording—asks you to hit a button to stop getting the calls, you should just hang up. Scammers often use this trick to identify potential targets
- Do not respond to any questions, especially those that can be answered with “Yes” or “No.” (See above; “Can you hear me now?”)
- Never give out personal information such as account numbers, Social Security numbers, mother’s maiden names, passwords or other identifying information in response to unexpected calls or if you are at all suspicious
- If you get an inquiry from someone who says they represent a company or a government agency, hang up and call the phone number on your account statement, in the phone book, or on the company’s or government agency’s website to verify the authenticity of the request. You will usually get a written statement in the mail before you get a phone call from a legitimate source, particularly if the caller is asking for a payment
- Use caution if you are being pressured for information immediately
- If you have a voice mail account with your phone service, be sure to set a password for it. Some voicemail services are preset to allow access if you call in from your phone number. A hacker could spoof your home phone number and gain access to your voice mail if you do not set a password
- Talk to your phone company about call blocking tools and check into apps that you can download to your mobile device. The FCC allows phone companies to block robocalls by default based on reasonable analytics. More information about robocall blocking is available at fcc.gov/robocalls
Protect seniors with the use of smart phones
Block calls for everyone except for contacts
A smart phone may be expensive, ranging in price from $250 to $710 and up, but it’s a lot cheaper than losing your life savings to robocall scammers. A particularly handy feature for seniors who may be susceptible to phone scams is the “Priority Only, Do Not Disturb” mode. This feature allows you to set the phone to receive calls only from contacts. If you have a senior in the family who you feel is an easy target for scammers, this feature lets you set priority calls from a contact list, blocking all others.
Here we get into ethically problematic territory. Your senior parents have the right to answer their phones, and treating them like children can cause tension in the relationship. However, the secret to gaining their cooperation rests in how you present the argument. Educate them on the increasing levels of scams and robocalls, and offer priority calls from a proven contacts list as an option. Make it their choice as adults. In the early stages of dementia brought about by illnesses such as Parkinson’s Alzheimer’s, or Lewy Body Dementia, where confusion is sporadically intertwined with lucidity, you may have to take the bull by the horns and be more aggressive in the protection of the elder in your care.
You could gift your parents with a smart phone and set it to priority calls only. Since loneliness and isolation are prime motivators for seniors to pick up the phone, make sure you and others, such as friends, stay in contact by phone regularly. Your parent doesn’t have to know about the priority settings, and it won’t matter if they feel connected to the world. It simply won’t occur to them that they’re not receiving robocalls. As we said, there is an ethical consideration. In essence, you’re scamming your parents. However, in the realm of scamming, this one is far kinder than the scams that robocallers have in mind. Again, a senior’s susceptibility to phone scams is a direct function of loneliness.
Take an active role in the protection of your loved ones
With the increasing number of elderly in America as more and more Baby Boomers reach old age, it’s sad-making that we have raised a younger generation who believe that they have the right to get whatever they want by any aggressive means necessary. (This became apparent in the mid to late ’90s.) With an increasing population of elderly targets, it’s essential to remain vigilant. Whether you’re caregiving or just concerned about your parents’ vulnerability, it’s necessary to take a proactive stance to protect those you love from robocalling predators.
You can find more information on how to prevent senior scams at the AARP website.