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The numbers are staggering and the effects are long lasting.
Fraud seems to be everywhere and its perpetrators are relentless.
The victims of fraud fall into no particular category, age or educational background, but those over the age of 60 are most vulnerable.
Officials with the state of Montana’s Commissioner of Securities and Insurance Office were in Libby last week to share the statistics and ways people can avoid becoming victims. It was part of a tour across central and western Montana in the last few weeks of March.
Blair Stapleton, the Public Outreach Coordinator in charge of investor education in the state Auditor’s Office, and Andrew Cziok, an attorney with Montana’s Commissioner of Securities and Insurance, told stories of actual victims and how fraudsters work to gain a person’s trust.
Cziok spoke about Susan Bivins, a resident of Anaconda.
“She’s an intelligent woman, she was a registered nurse and she lost her life savings in a scam,” Cziok said. “Thankfully, she was eligible for $50,000 in restitution through the Securities Restitution Fund.”
Bivins retired from her nursing career to Anaconda to be closer to family.
A man posing as an agent with the Drug Enforcement Administration used a sophisticated scheme and other tactics to rob her of nearly one quarter of a million dollars in life savings and retirement.
A former Miles City man, Richard Brandt, 70, was sentenced to decades in prison for operating a pyramid scheme and exploiting older persons, one 100 years old, in a house flipping scheme. His crimes cost investors $1.9 million.
Those were just two of the stories shared by officials.
Stapleton said according to the FBI’s annual report on internet crime, victims in the 60 and over age group suffered $3.4 billion in fraud losses in 2023. She said that’s double the amount lost by the next-victimized age group (50-59).
“Only one in 44 cases are reported,” Stapleton said. “It’s embarrassing, people feel ashamed. Anyone can be targeted. We’ve seen former law enforcement officers, well educated people become victims.”
Cziok said the most common scams in Montana are Ponzi, pig butchering and romance.
A Ponzi scheme is an investment scam that pays early investors with money taken from later investors to create an illusion of big profits. It promises a high rate of return with little risk to the investor.
“No legitimate company will tell someone they will get high returns with little or no risk,” Cziok said. “You also have to be aware of unregistered investments and unlicensed sellers. People who aren’t sure of who they are dealing can call us and we can look it up to see if they are licensed.”
He also explained that effective scammers will pretend to be someone you trust, offer a scenario where a problem can be solved or a prize is offered.
“They’ll pressure you to act immediately, much the way people push when trying to sell a time share and they try to get you to pay in a unusual way, with gift cards, Venmo or PayPal.
“Pig butchering” is an East Asia scam referred to in the manner because the victim is, “being fattened up before the slaughter.”
Cziok said those engaging in such a scam will do whatever it takes to gain someone’s trust.
“They’ll start a scam small, the victim will get their investment back and the perpetrator will come back seeking more and larger amounts of money,” Cziok said.
He also offered four way for investors to protect themselves.
“Be skeptical of people you meet online, never rush into an investment and research anyone who offers to sell you an investment. If you are the victim of a fraud, please report it to the local police, state or federal law enforcement. Scammers win when it’s not reported,” Cziok said.
He also said the coronavirus pandemic, many people found connections online.
“These scammers will work to learn a lot about you and your family, which helps them gain your trust,” he said.
Grandparent and government impersonation scams are also popular.
“No law enforcement agency will ever call, text or email you and ask for money or threaten you with arrest if you don’t pay,” Cziok said.
Grandparent schemes are meant to isolate the victim, he said. People pretending to be the grandchild or someone impersonating a cop, lawyer or doctor will come early the morning or in the evening, he said.
“They’ll put the pressure on and they’ll wait for a grandparent to say the grandchild’s name, which further helps them make the scam seem real,” Cziok said.
Stapleton said people should also try to resist the idea they can never be scammed.
“Most of us never think it could happen to us, but we overestimate our ability to avoid a scam,” Stapleton said.
The following resources provide more information about scams and where to report them:
Federal Trade Commission https://reportfraud.ftc.gov/#/ or at 1-877-382-4357.
Federal Communications Commission https://consumercomplaints.fcc.gov/hc/en-us
Montana Department of Justice https://dojmt.gov/consumer/?utm_medium=email&utm_source=govdelivery or by calling 1-800-481-6896 or 406-444-4500.
Federal Bureau of Investigation https://www.fbi.gov/how-we-can-help-you/safety-resources/scams-and-safety/
FBI reporting https://www.ic3.gov/
Better Business Bureau https://www.bbb.org/scamtracker
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