Daniel Rosen 0:00
Hey credit heroes. Today we're talking with finance expert, Dan B. He's here to talk about a terrible financial scam that caused a whole lot of damage to his family. So we're going to talk about that. We're going to talk about all different kinds of financial scams, and we're going to learn the best ways to protect ourselves from financial scams, so you better stick around. So the big question is this, how can we take our passion for helping people with their credit and turn it into a successful business without taking loans without spending a fortune by bootstrapping it from nothing? So we can help the most people and still become highly profitable? That is the question, and this podcast will give you the answer. My name is Daniel Rosen, and welcome to Credit Repair Business Secrets. Okay, before I dive in, this is the number one show about credit repair. The number one show about running a credit repair business, we cover every aspect of credit repair. We have a new show every single week, so be sure to click to subscribe and turn on notifications so you don't miss any of the secrets that we share each week here on the Credit Repair Business Secrets podcast. And if you want me to hold you by the hand, as you launch your very own credit repair business, go to credit hero challenge.com. Okay, let's get into this. Dan B. Is my good friend of 25 years, he created our popular course on how to become a personal finance coach. And he's he's here today to talk about financial scams, and how they affected his family and how we can protect ourselves and our clients. Please welcome to the podcast, Dan B. Hey, Dan, thanks for being here.
Unknown Speaker 1:54
Hi, Daniel. It's great to be here, too. Thank you so much for inviting me to your podcast.
Daniel Rosen 1:57
Oh, I had to have you on when you told me what happened. So tell everybody, what is it that happened with your family?
Unknown Speaker 2:04
Okay, so you know, scams are affected, they're so prolific that they affect so many of us. And recently, they affected myself personally. So I have an aunt and elderly aunt well into her 80s. And she lost her entire life savings due to a scam. And we didn't find out to all the money was gone,
Daniel Rosen 2:21
she lost her entire life savings completely.
Unknown Speaker 2:25
She lost everything. That's horrifying. It was a terrible thing that's happened. It didn't just happen, you know, to my family, it happens to many families. You know, their scams are just so common now that they're targeting, you know, the vulnerable. Essentially, every member in our society is being targeted right now for different types of scams. And you know, sooner or later, a lot of us get get impacted by it. And in my personal case, my aunt who is living off of her retirement savings, lost everything. And you know, there's different types of scams. This particular scam, worked on emotions and romance and got her thinking that she was romantically connected to a particular person, this person was in dire need and needed help. So of course, like most people, they
Daniel Rosen 3:11
let's go really, really slowly through this. First of all, how old is she?
Unknown Speaker 3:15
I asked her at three years old,
Daniel Rosen 3:17
is she online? Did this happen online,
Unknown Speaker 3:20
it happened through email. So a lot of these scams, they connect through email. In this particular case, they sent her an email making her think that she was she was talking to a celebrity or someone that she highly respected. I don't actually recall the name, but they made that personal connection. And when they make that personal connection, that emotional connection, that's when they engage the victim. And when you gauge the victim, the victim feels personally responsible and wants to help out. And when they got that hook, they create the drama, they create the need for for money. And it just, it just rolls from there just feeds onto itself.
Daniel Rosen 4:02
So she thought it was someone famous that was reaching out to her.
Unknown Speaker 4:06
Correct, she thought it was someone famous, a famous author that she somehow connected to. And that was in some personal drama. You know, that's how it works. There has to be drama in order for the scam to work. And this particular person needed funds to get out of a situation but was going to get funds later. So all this person needed was a short term loan from and of course, you know, like we all do, we all want to help each other. We all want to help. So, you know, my aunt felt that she was helping this particular person. And because it was an embarrassing situation, she didn't want to tell anyone to want to tell anything. That's another very key component of a scam. If they try if they try to create an environment where you feel you can't tell other people about it.
Daniel Rosen 4:49
So how was she to loan this person? How was the money to exchange hands?
Unknown Speaker 4:55
Oh, so scams work in different ways. So Sometimes you wire transfer. In this case, there was a wire transfer that was involved. But there was also the common scam of gift cards. So what what the how this particular scam works and it's very common is they convince people that they need funding. And the way to do that is to purchase gift cards, and then give those gift card numbers to the scammer. And then the scammer will empty those gift cards, you know, buy products and then sell it. And that's how they make their money. So it was a combination of wire transfer. And when all that was consumed up using credit cards, maxing out credit cards to purchase gift cards.
Daniel Rosen 5:39
And this went on for a very, very long time until all her savings was was gone.
Unknown Speaker 5:45
It likely went off about one to two years. And that's exactly how it stopped is essentially all the all the credit cards were maxed out, you know, if you couldn't pay your own bills, because you don't have anything. My aunt felt that she was moments away from being refunded, but haven't been refunded yet. And the scammer will constantly come up with more and more drama and excuses of why she needs to give more money and why they're only days or weeks away from getting all paid back home.
Daniel Rosen 6:18
Do you remember what any of the drama excuses were?
Unknown Speaker 6:22
In this particular case, this suppose that famous person was going through a personal divorce, who didn't have access to his money, you know, this is always a complicated story. So he needed money to flow to a particular you know, expense or health issue, whatever. And then when this when it would settle, he would get access to all this money and then repay back with interest. And all would be would be good. The issue would be closed, and my aunt would feel satisfied that she helped out this famous person. Of course, none of that is real, you know, it's all playing on people's emotions. It knows you know, what, what people connect to, which is helping others. And it knows kind of that they that they react differently when there's a dramatic situation. And when they can't tell the story to others. And that's all what's so all these scams have in common. The drama, the the roughness of it, the need to do something quickly, and then the ability to be paid back in whole or more.
Daniel Rosen 7:20
How much did they take? Oh, it
Unknown Speaker 7:22
was about $120,000? It was quite a bit of money.
Daniel Rosen 7:25
Oh my god, that is so horrible. And what was this? Like for her? What was at the end? What was this like for your family? What did you go through?
Unknown Speaker 7:35
Well, I don't think she's unique in this at first you don't believe it's real, you believe that you haven't been scammed. And and this particular person just is having trouble. So there's that whole time period, we have to kind of accept that you were scammed. And then when you realise your scam, there's an incredible embarrassment that occurs. So you don't want to tell people about it. You don't want to you feel embarrassed that you got cut, you know, kind of snookered into this deal. And then after that, there's the guilt and the impact and the consequence to all this because you still have to pay your bills and you lost all your savings. So there's a lot of repercussions that occur. And one thing I want to emphasise is this is not a you know, one to person situation, this happens to millions of people across our country. And these scam artists are just professionals, you know, they know what buttons to push, and what, you know what keywords to use, to make, you know, make these deals happen.
Daniel Rosen 8:30
Oh, and with this happening for a year and a half or more. She had a it was a relationship. Basically, she built her relationship with with him.
Unknown Speaker 8:40
Yeah, absolutely. Yeah. It's the relationship is how they get that emotional connection. And you know, most of the conversation has nothing to do with the financial need. And then they build that relationship. They create that bond. And then when they have that bond, they create the drama, and that's when they crave, you know the need for money.
Daniel Rosen 9:00
Wow. My mother is 94. And she spends her whole day She lives alone. She spends her whole day on her computer. And she's always calling me sing. AOL is threatening to cancel her service. And they need a new credit card. And every single time and the same thing happens again and again. Every single time. I have to tell her, AOL is free. That email is not from AOL, they are free. So don't pay attention to that. But she opens everything. And she opens attachments to everything she believes every email that she gets, and they look really, really legitimate even when they aren't I wonder if this guy got your answer information in one of these ways? Yeah,
Unknown Speaker 9:46
that's a fishing expedition. I mean, they do that for several reasons that could be identity theft, in which they tried to copy the identity and then create credit cards maxed out the credit credit cards, often the victim doesn't even know what's happened until they see Your credit report has been destroyed. Right? And that's where credit repair is so valuable. So that's one type one of the many, many, many types of scam.
Daniel Rosen 10:09
I'll tell you one other thing that happened with my mother, one time she was on the phone with hours and hours, or four hours and hours with someone she thought was Apple support. But it wasn't. It was someone in another country and they spent a day logged into her computer, she let them in. And they spent hours and hours rooting around in her computer. It was very scary. I guess they were looking for information. I don't know what they found. Luckily, there was nothing bad happened. But that was really, really frightening. Did they get any money from your mother? No, no, they didn't. As far as I know.
Unknown Speaker 10:45
Wow, as far as you know, because if they were in there, I mean it and your mother was believing them. It sounds like it was a risk, at least I can tell you what happened to my mother, which was really interesting. One of the scams that occurs is you know, the get rich quick scams. Yes. So my mother, who was not the most financially savvy person was convinced that she had these stock advisors that were advising her to jump onto the marijuana bandwagon, you know, the marijuana became legal, there was all these startup companies that were jumping into it. And if she invest into it, you'll make a tonne of money. And in reality, what this was, is these are called pumping dumps, where you have all these characters that will promote these failing companies that either exist or don't exist, or whether it's on paper, or they're nothingness, and they promote them like crazy to drive up the stock, they sell the stock, and then it dumps that's the pump and dump scheme. And the incentive on the victims end, is they think they're getting rich, and they see the stock going up. But what they don't realise is that it will drop in a second, and they'll lose everything. Right? That's a very, very common scam. And what made this one so frustrating is, despite the fact that I was explaining to her at the time that this was a pump and dump and that it was a complete scam. There, too. She was too lured by the prospects of getting rich quickly, that she couldn't wish she wouldn't believe anything I said. And that is such a common story. You know, there's that old saying it's easier to scam somebody than it is to convince somebody that they're being scammed.
Daniel Rosen 12:19
And did they take her for a lot of money?
Unknown Speaker 12:22
In that case? You lost about I think $8,000 Yeah, correct. Oh, wow. Yeah, I was successful to save, you know, other amounts of money. But But yeah, absolutely. Because you don't win in these pumps, unless your timing is just perfect, which is essentially luck. You know, it's nothing to do with your skill. You're going to lose money to pump it up, because that's how they're designed. You know, and right now, there's a lot of that in the crypto stock world, you know, there's all these get rich quick investment schemes in which you invest in the crypto world. And those two are pumping dumps, where the you know, they're heavily promoted. You get all these characters that invest their money into it drives the stock price up. And then what happens at a certain point is the company folds, it disappears, the stock price goes to zero. Somebody made a tonne of money, and it's not you.
Daniel Rosen 13:11
Terrible, terrible. I know you and I have a friend in common, who was recently scammed.
Unknown Speaker 13:17
Oh, yeah, that was a bad one.
Daniel Rosen 13:19
I don't think we should mention his name. But let's call him David. Can you describe what happened to David?
Unknown Speaker 13:28
So that was a romance scam. So this isn't a person who's in his 70s Right, but it's still actively dating. And he's a colourful personality, and he likes to go to all these dating sites and date people. And what happens is, is there's all these fake accounts, that that attack characters like this, and pretend to be very young, beautiful women, and they to create this long term, you know, connection with their victims, and ended they get their their victims to believe that they're, you know, moments away from this character, you know, flying over and having this great relationship with them. But in reality is a total scam. And just like the scam they talked about, in my aunt, they create a drama, in which they're in trouble and all this issues are going to occur. And they ask for help. And because they're there, they're you know, emotionally involved and potentially romantically, you know, hopeful and all these characters. They're vulnerable to it. And so they they transfer money over and of course, there's no person on the other end. And I remember
Daniel Rosen 14:33
you kept warning him, you kept telling him, this is a scam. Have you actually talked face to face with this person? And somehow, it went on without him ever having a face to face conversation? Am I right?
Unknown Speaker 14:47
It's always that way. Or it's often that way, I should say, you know, there's always an excuse about why it can't be, you know, verbal conversation or video conference. And the reason is because the person's is you know, probably Probably some guy in Nigeria or whatever or some other place, that that's that's scamming these people, it's it's a luring them and they and they essentially get you know, like a mini form of brainwash. So even when you try to convince them that this is a scam, this is not real and the reasons why it's not real, the question that they'll say no, it's not true, you know, because they've already invested their time, they invested their emotion into it, it's like convincing you, you know, you know, something that you really love and cherish isn't real. And that's a very hard thing to take. And sure, at a certain point, you know, he, he did recognise it was a scam. But as you know, who also, you know, almost convicted for the second scam was almost identical, because certain, and I want to make this point very clear, it's not like some people are more, you know, much more vulnerable than others, which is, which is true. It's just that there are so many scams out there that eventually all of us can become victim to it. You know, none of us are completely immune from being emotionally tricked, or going in over our feet, whatever, we went over our neck on something that we don't fully understand, you know, there's always a little bit of trust and all of our transactions, and scammers take advantage of that.
Daniel Rosen 16:18
Oh, absolutely. And in his case, he, I'm sure they were texting round the clock, they had this whole love story happening. He ended up spending, it was 10s of 1000s of dollars, wasn't it?
Unknown Speaker 16:31
It must have been, it must have been, it was the most, if you were describe the story to anyone, everyone would say it doesn't make any sense. But But what happens is, is they give you you know, it starts off innocent, it gets a little bit deeper and deeper and deeper. In the end, it just get to more and more fanciful concepts. That just sound completely absurd. I think you might remember this, they had him believing that he would transfer money and that she would ship gold to him. But gold can't be shipped in the mail. So it has to take a longer time to ship and you know, by boat. So it takes a while. So it was just an absurdity that anyone who listened to the story thinks it's crazy. But everything sounds crazy when you just hear the end. But when you when you're prep for like, you know, six months of hearing little thing, little bits, little bits, little bits, then it makes sense.
Daniel Rosen 17:24
Oh, yeah. Let's see. He showed you pictures. Yeah. We thought he was talking to.
Unknown Speaker 17:31
Yeah, if you if you if you jumped to the end, if you jumped to the conclusion, none of that makes sense. But if you follow the whole story, Oh, yeah. It kind of see it. And, you know, I guess the question that that's out there is, you know, how do you protect yourself and your loved ones with that? And what needs to happen is you got to follow the basic rules. Is this too good to be true? You know, you know, you should do research. So there's there's lists on common scams, does this follow some of those characteristics? Is there drama involved? Are you being pressed for time? Do you know the background of this person? Are there references? Can you talk to other people that can back it up? Are they independent, you know, it's good to have a critical mind, not overly critical, because then then you'll go crazy on the other end of the spectrum, but you need to be able to be, you know, that classic term Trust, but verify. Absolutely.
Daniel Rosen 18:24
Now, how common are these kinds of scams,
Unknown Speaker 18:27
they are everywhere. Anyone who has a cell phone knows that they are getting multiple calls a day from various scam artists. And these are people that are just calling millions and millions of people a day hoping for that one or two hits. So and there are scams across the board. There's the identity theft scam that you were describing with your mother. There's the remote romance scam that we talked about with those, you know, our friend and my aunt, which and then there's the get rich, quick scams. And there's a dozen other types of scams that are out there. Which is you know, again, is it too good to be true is there you know, are there references to this? Are there examples of it, you know, working successfully? Are they preventing you or discouraging you from telling your friends and family about it? No, that's always it's always a key thing.
Daniel Rosen 19:18
Absolutely. And some besides draining your life savings, it leads to identity theft, it ruins your credit. I heard a story about someone who he was doing credit repair and this happened to his client. The client had some a scammer remortgage their house they weren't even aware of the real mortgage, they took out a HELOC a home equity loan against the client's house and all the money was drained from the house.
Unknown Speaker 19:49
Yeah, so that's a deadly theft. So I mean there's good and bad it's it any theft is the is the least of the of the two because then identity theft, they're not taking your life savings and you can just essentially tell the mortgage company or the credit card, hey, this wasn't me, you guys didn't do your part, you know, and there's, as you know, there's a whole kind of bureaucratic system to be made whole in that situation. So while it is, you know, horrific and pain in the neck, and in many ways could like prevent you from getting a loan or prevent you from renting a house, there's a lot of negative aspects of that. There are techniques that you could do through credit repair, to repair that aspect, the other type of scams in which they physically take your money. And in many cases, it's willing, right? In our friends case, they willingly transferred it, and my aunt's case they willingly transfer the money. So in that case, the you know, you're liable for that, because you made this choice. It wasn't that your card numbers were stolen, you bought those, those would you call those things, those money cards, those those gift cards, with your knowingly, so you are liable for it? So it's a very different very bad situation.
Daniel Rosen 20:59
Wow. Well, we should talk about some of the other ways people can protect themselves. I mean, I think most of all, if if, if an offer, or a person or a situation looks too good to be true, it probably is. Right? Absolutely.
Unknown Speaker 21:17
You know, another thing is, you know, don't, don't do things in secret, you know, it's okay to discuss it, when you got all these big issues, like I had this friend that desperately needs money, you know, and you want to talk to people about that, make sure it makes sense, if you're going to do if you're going to loan somebody money, make sure that there's you know, some kind of recourse about it, you know, and then hopefully, a friend will say, have you met this person? Have you seen this person really, you know, and that can often you want someone outside of your bubble, that to kind of double check your thoughts, talk to family members like that. And then the other thing is do some Googling, in the case of the pump and dump stocks, you know, those are very well documented, you know, so you should kind of understand, you know, you know, when you've been exposed to that you could you could Google it and figure out, you know, this falls under that category. I agree, some of this is complicated. It's important not to get in over your head, don't invest in things that you don't fully understand. Right? If you can't understand how the process is working, it's probably best you avoid it. You know, the stock market is considered a long term investment, if you're trying to get short term gains out of it, and you don't really understand how that works, you're likely not going to be successful.
Daniel Rosen 22:37
Yeah, that's really good advice. And also don't trust every email you receive. Some of them look very, very real. Yeah, I get all kinds of very official looking emails from banks that I don't bank with.
Unknown Speaker 22:54
Yeah, absolutely. So that gets into what do you call it spear phishing techniques, where they, they mimic an organisation that you trust, like a bank, or AOL or whatever have you. And they say, your, you gotta log in. And then you click on the link, and it makes something look just like AOL, or just like the bank, you type in your, your username and your password, and bam, they have that information. And once they had that information, then they could access the actual bank. So So emails are bad. I think, you know, telemarketing phone activities is just as bad. There's probably less in person scamming than there was in the past. But, you know, occasionally that happens as well. You know, again, it's not just like there's the other people are vulnerable to this, you know, you shouldn't walk away thinking, well, that's a crazy story that would never happen to me. You know, I'm sure that all of us can be victim to some form of scam. And there are great stories, you know about Ponzi schemes that that lured, you know, professional money marketers to invest all their money into something that that was completely complete vaporware didn't even exist,
Daniel Rosen 24:06
the list goes on and on and on. What are some more tips to that people can use to protect themselves?
Unknown Speaker 24:12
Well, I mean, first of all, you should be aware of your credit score, right? So that kind of addresses the issue of identity theft, because identity theft could occur when you when you're completely not aware of it, you could do nothing wrong and still get identity theft, they could take out credit cards in your name and you just and just you read the consequence of that. So you should have visibility and kind of regular routine looking at your credit report. That's that's one way. The second thing is you know, when you're dealing with like relatives that are elderly, like your mother or my aunt, all that stuff, have honest conversations with them explain how you know you could be vulnerable to this you are definitely being you know, sought after and attacked routinely, but by scams, have those open conversations, that's something that I probably should have done better. Right. So you want to get ahead of it. And you want to be able to explain, you know, what are the different types of scams, you know, so that when they are exposed to it, they say, oh, you know, I can't remember this. So that's, you know, very important and and then the third thing, which is, you know, just kind of good is think about your the deals that you're doing with yourself. And you know, where were my risks, you know, where are my weaknesses? You know, we all have kind of emotional connections with ideas, and the scammers know that so that they try to take advantage of that. Yeah.
Daniel Rosen 25:33
Also, you should never give money or credit card details, or online account details to anyone that you don't know and trust, you should check your bank, your bank account and credit card statements regularly. For unusual activity, you should be doing credit monitoring to check your credit report to make sure there's not weird stuff on there. That's, that's not yours, that's that would be a sign of identity theft, theft. You should report any unexplained transactions to your bank, you should make sure no one else knows your pin number. Right, those are all good things. And here's
Unknown Speaker 26:10
actually a big advantage to credit cards. So when you purchase something on a credit card, there's insurance that goes along with it. So if you purchase something from a credit card, and you never received the item, or the item was a total scam, or you know 10 Other numerous things, you can complain to the credit card company say, hey, this was a scam, I never received it. And if that's true, you'll get your money completely back, that's very different than if you use your debit card, send them or write them a check, or something like that, then you don't get that money back. So when you're dealing with things that are questionable, the credit card can provide a layer of security. Now, in the case that we sat with my aunt, where she knowingly bought gift cards, well, you know, where's your argument, you don't have an argument there, you knew what you bought, you gave it to someone else. And that's actually the reason why this the scammers know this. And that's the reason why the scammers don't ask for credit card numbers. They want the gift cards because gift cards cannot be refunded or returned essentially, they're a one time transaction.
Daniel Rosen 27:11
There are some really smart evil people aren't there
Unknown Speaker 27:14
are a lot of smart evil people out there, correct? Well, if you're
Daniel Rosen 27:18
out there listening, and you've got a credit repair business, and you have clients with identity theft, these are things you want to talk with your clients about for sure. To prevent this from happening again.
Unknown Speaker 27:30
Absolutely. And if you're helping them with their personal finance, and you want to be a personal finance coach, these are big issues for a lot of people, you know, when you're often you're trying to protect people's savings and protect people's credit score, right. So when you're protecting people savings, this is one of the biggest risk to their savings is essentially they would lose their whole savings because of one or two very bad decisions.
Daniel Rosen 27:53
So crazy. Thanks for being here, Dan, I really, really appreciate you this was really awesome. It was really informative. And, and I really appreciate you coming by.
Unknown Speaker 28:04
Oh, it was my pleasure, Daniel, I always love coming by here and discussing shop with you. Thank you so much for inviting me.
Daniel Rosen 28:09
Sure. And those of you listening, if you want to learn more about Dan's course, on how to become a personal finance coach. Just go to creditrepaircloud.com/training. And we're also going to put a link to all the courses down in the description of this podcast and in YouTube. Again, thank you again for being here. And if you're finding value in this podcast, be sure to click below to subscribe. And if you have any questions, drop a comment or ask a question, because I read each and every one of them. And I will see you on next week's podcast. And in the meantime, be a credit hero and keep changing lives. Hey, everybody, it's Daniel again. And really quick, I'd like to invite you to join what I believe is the best thing we have ever created inside the Credit Repair Cloud Community. And it is a challenge that we call the credit hero challenge if you're just planning out your business, or you're just getting started, and you dream of having a successful business of your own. So you can quit your nine to five and fire your boss and have financial freedom or so you can add another revenue stream to your existing business. If that's your dream, you need to get into this challenge. We created this challenge to help you to create and launch your very own credit repair business to build a proper foundation for a really successful business. This challenge is going to help you to understand the strategy, the tactics and all the things you need to be successful at credit repair. It really is the greatest thing we have ever built and it will change your life. So I recommend you do it right now. Stop everything pause this audio go online and go to creditherochallenge.com that's creditherochallenge.com and join the next challenge and there's a challenge that starting in just a few days so go get started right now at creditherochallenge.com