When Fraud Hits Close to Home

Fraudulent schemes usually feel distant until they happen right in front of us. This blog details the personal experience of a senior vice president (SVP) at Ideal Credit Union, whose own close encounter with a scam underscores the pervasive and insidious nature of fraud. Here, we explore how easily anyone can become a target, even those well-versed in the mechanisms of financial deception.

Targeted Advertising is a Double-Edged Sword

Targeted advertising – serving specific ads to a specific audience defined by their interests, demographics and more – is how search engines and social media sites make their billions in yearly revenue. Though most of us don’t think much about targeted advertising on search engines and social media platforms, when we do notice it can feel like a blessing, presenting the exact solution we need in the form of products that seem tailor-made for exactly what we need in the moment. 

In other instances, the solution we’ve been looking for but haven’t been able to find is presented to us on the digital version of a silver platter. But this precise targeting of users also opens doors for scammers to exploit those same interests and demographics with unexpected precision. By mimicking legitimate marketing strategies, scammers create ads that not only capture attention but also appear remarkably relevant, making it challenging to distinguish between genuine offers and extremely appealing traps.

Our SVP experienced this first-hand after searching for running shoes online. They recount being served with an ad for running shoes that seemed as legitimate as any other, but with an extra-attractive price:

"I found a few options online, but never bought anything. Then in a later doom scroll session online, The sporting goods site had an ad on a social site for running shoes for $39.95. I could not pass up this deal since these shoes usually sell for well over $100. So, I bought them from the convenience of my couch."

Spotting Scams in a Sea of Advertising

There are many instances of users being served highly targeted ads almost exactly like this, happening every second of every day, which are from actual, reputable companies. The overwhelming amount of legitimate advertising we are exposed to every day makes it difficult to spot the scams scattered through them. It’s especially difficult when the ad fraudulently uses a reputable company’s branding and style.

This scenario underscores how scammers exploit the sophisticated ad targeting tools available on platforms like Instagram, which allow them to present highly personalized and compelling offers in just the same way that reputable companies do. These platforms' algorithms are designed to show users products they are most likely to buy, based on their browsing and purchase history. Unfortunately, this capability is a double-edged sword, since it also helps scammers fine-tune their schemes to entice potential victims with too-good-to-be-true deals on exactly the type of product they are looking for, just as in the incident experienced by our SVP.

Recognizing the Scam

The realization of a scam often hits just moments after the transaction, leaving the victim grappling with the immediate consequences of their decision. 

"About 1 minute later, a charge showed up on my credit card for $39.99; except it was not for the sporting goods site I expected and was instead processed in a foreign country."

Fortunately in this case, the understanding of what had happened was immediate. The discrepancy in the merchant's name and the transaction's international nature were correctly recognized as significant red flags:

“Shamefully reflecting on my shopping session, I had just entered my credit card number, expiration date and CVV into a fake website… and now I won't get those shoes."

This rapid transition from satisfaction to regret is a common emotional trajectory in online fraud cases. And as bad as it feels, the only worse reaction is not realizing that you’ve been scammed, which allows the scammer to continue accessing your credit or other funds. 

Containing the Damage

The immediate aftermath of clicking "buy" can lead to rapid, unauthorized transactions that catch consumers off guard. This swift action is a hallmark of many online scams. In the scam our SVP experienced, it happened in about a week, but in other kinds of scams the results can be almost instant. 

In the wake of realizing a scam, taking your own swift, protective actions to mitigate financial damage are vital. The immediate steps to secure financial accounts can significantly impact the severity of the consequences. In this case the consequences beyond the initial charge were almost completely avoided:

"I went to my mobile app and turned off my card knowing what was soon to follow. And good thing I did; within about a week, there were 4 additional online charge attempts at $400 each. Thankfully all of them were declined."

Turn Off Your Card After Any Suspicious Purchases

This response to the purchase illuminates the typical consequence of falling for a scam of this kind—the unauthorized use of credit card information. Such quick misuse of stolen data is typical, as scammers aim to capitalize on the theft before the victim realizes the problem and cancels their card. Statistically, credit card fraud tops the list of identity theft reports filed with the FTC, with 416,582 reports filed in the last year alone. 

By turning off the card immediately, our executive was able to prevent further fraudulent transactions, providing an example of the defensive strategies available against continued fraud attempts.

Understanding the Threat

Educating oneself and others about the dangers of online scams is crucial for prevention. Our SVP speaks from experience in reflecting on the broader implications of the incident and the importance of awareness in combating fraud.

"Rhetoric surrounding fraud victims often goes something like 'How did they fall for that?' Trust me, this too can happen to you given the right set of circumstances and timing. Stay vigilant and take advantage of the tools offered to protect you when (not if) something like this happens."

This serves as a healthy and frightening reminder that anyone can fall victim to a scam under the right conditions. No one is totally safe from scams, because no one is mentally prepared to deal with every possible scam they could encounter. Even if they were, being caught on a bad day or at a bad time of day when your defenses are lowered can be the only edge the scammer needs. Having a hard personal or professional day, being sick or not getting enough sleep are experiences we can have on a daily basis, but any (or all) of these can contribute to falling for a scam you never would have become a victim of if your defenses were at their normal level.

Idea CU emphasizes the need for continual vigilance and the use of protective measures provided by financial institutions. Educating oneself about common tactics used by fraudsters, such as too-good-to-be-true offers and the urgency to act is vital in recognizing and avoiding potential scams.

Learn From Others Before You Learn From Experience

Experiencing a scam firsthand often catalyzes a renewed commitment to vigilance. It serves as a stark reminder of the need to stay informed about the latest scamming tactics and the importance of utilizing available protective tools. Such incidents underscore the vulnerability even experienced individuals can have to sophisticated fraud schemes and highlight the ongoing and increasing war against digital fraud and give the rest of us the opportunity to learn from others instead of by hard, real-world experience of falling for a scam.

Spreading Awareness

One of the most effective defenses against scams is awareness. By openly discussing personal experiences with scams, individuals contribute to a culture of transparency and mutual support that enhances collective resilience. Encouraging conversations about fraud helps demystify and destigmatize being scammed, fostering a community better prepared to recognize and resist such threats.

Ideal Credit Union's Role in Empowering Members

Ideal Credit Union recognizes the importance of empowering its members not just through financial services but also by equipping them with the knowledge to prevent fraud. This commitment is manifested in our Security Center, alerts and readily available resources like this one, all aimed at enhancing the digital safety of our members. Through these efforts, we work to strengthen our community's defense against the ever-evolving landscape of financial scams so you can live your Ideal Life!