• Ashwin Nazareth

Protecting Yourself Against Phone Scams

In this week's insight article we talk about how to protect yourself from phone scams, they seem to be all over the news these days and it's been a question asked repeatedly on our Podcast, The DiCoRm Forum. To start, it's best that we take a moment to fully appreciate what a scam is trying to achieve and that would be to exploit a strong emotion, overcome rational thought, and have you surrender something of value at the end of the exchange.


Let’s dig into some of the most common scams out there and see if we can identify what makes them tick - The Macau Scam, The Phishing Scam, and The Love Scam.


The anatomy of three basic scams


So first off, the Macau Scam, apparently named after the place scam originated from, although this may be a misnomer because such scams have been around since the beginning of time. In the old days, the mechanism of the Macau Scam took place face-to-face and was more colloquially referred to as a con or hustle. In this type of scam, the perpetrator will try to convince you that you're in a lot of trouble so you will irrationally transfer sums of money into their account. It usually starts with someone calling you over the phone claiming to be from the immigration or the customs office having seized your package of contraband products and because you're the named recipient of this package you’re now in a lot of trouble. Alternatives of this will have the perpetrators calling claiming to be the police, the central bank, or the tax authorities, saying that you are about to be arrested for some violation related to tax evasion, narcotics, or money laundering (or some other very scary and familiar-sounding crime). While the method in which the scammers will start the call may differ, they always end the same way, with you needing to transfer a specific sum of money, or everything in your account, into a 3rd-party account to either 'facilitate the investigation' or to 'protect your assets from further harm'.


This is in contrast to the Phishing Scam, more commonly manifested today as the OTP scam. It allows the perpetrator direct access to your financial instruments like bank accounts and credit cards. So, in this type of scam, they employ similar pressure tactics as the Macau Scam with the objective of getting key information from you such as your PINs, Passcodes, Token IDs, or answers to your security questions. Later, they will be using this information to break into your accounts and steal your money for themselves, undoubtedly layering this through a string of other accounts they've obtained by similarly nefarious means to cover their tracks.


And finally, let’s not forget the Love Scam or the “please help me, because I’m in trouble” scam. This one works the same way as the first two but you’re forced into action by appeal to your sympathy and better nature. This may be the most profitable of all scam types because it appeals to the generosity and a hero complex within the victim rather than fear, built up over weeks or months of intense communication between the scammer and the victim before the actual financial crime takes place. It's common to find news articles documenting losses in the hundreds of thousands of dollars when it comes to this type of scam, and due to the victim feeling a personal connection with the scammer it tends to go unreported for a long period of time.


Panic as a Strategy


The upsetting thing is when done right, it's very difficult to tell the difference between a good scam and an aggressive telesales call. Indeed phone scam tactics are deeply rooted in traditional telesales techniques, albeit in an outdated sense, which used to be about overwhelming a user rather than delivering actual value. Thankfully most legitimate telesales companies have moved on from such practices.


The main point to get across here is pressure tactics are just that, tactics. The rush is almost always never real. You have to consider that if you were in any real time-sensitive trouble with the law, you’d have squad cars outside your front door, not a phone call trying to give you ample time to pack up and run away.


Increase your chances of protecting yourself


Protecting yourself involves developing the ability to always remain calm in high-pressure situations. Combat the pressure tactics with delays. Remember that most legitimate 'legal trouble' most often surfaces through lengthy and boring ways, is buried in paperwork, and is easily verified at the source. Here are some actionable ways to use delays:


  • Mute the caller and take a deep breath.

  • Just hang up unannounced and give yourself some time to reset before they inevitably try again.

  • Tell them you’re driving and you’ll call them back later.


Legitimate sources never mind you double-checking especially in this day and age. But if you tried to verify things but the information was not available you now have a question of personal risk tolerance. Proceeding with a questionable phone call means you're exchanging a chance to get scammed, for the chance at avoiding jail time, saving yourself from a fine, or winning a free trip to the Bahamas. Now is that worth it? Perhaps that’s just one more thing to stop and ask yourself while you've got that caller on mute.


7 views0 comments

Recent Posts

See All