So you've been scammed, now what?

This episode delves into the emotional and financial turmoil of falling victim to a scam, specifically through the experience of a woman named Frances.

1. Victims of scams often face significant barriers when seeking help from law enforcement and financial institutions.
2. Psychological manipulation is a critical tool used by scammers to maintain control over their victims.
3. The legal and banking frameworks are often inadequate to address the complexities of modern scams.
4. Immediate action following a scam can be crucial in potentially recovering losses.
5. Awareness and understanding of online security can be vital in preventing scams.

1. The Scam Begins

Frances recounts how she was contacted about a suspicious transaction, setting off a series of events that led to major financial loss. Key moments include her interactions with the fake security expert, David Smith.

• Frances: "I get a text saying, oh, this is David from the security department."

2. Realization and Desperation

Frances realizes the extent of her financial loss and confronts the reality of her situation. This chapter deals with her emotional response and her initial steps to seek help.

• Frances: "Where the f is my money?"

3. Seeking Help

This chapter covers Frances's efforts to seek help from the real FBI and her struggles with the banking system. The limitations of law enforcement in dealing with individual cases of fraud are highlighted.

• FBI Agent: "The FBI is probably not going to open a case about what happened to you."

4. Legal and Financial Roadblocks

Frances and her lawyers face challenges with outdated banking laws and the complexities of the financial system while trying to recover her funds.

• Lawyer: "The real problem here is that the banking laws are outdated."

1. Verify Before Trusting: Always verify the identity of callers claiming to be from financial institutions.
2. Limit Remote Access: Be cautious about granting remote access to your devices.
3. Monitor Your Accounts: Regularly monitor your bank and investment accounts for unauthorized transactions.
4. Report Immediately: Report any suspicious activity to your bank and authorities as soon as possible.
5. Educate Yourself: Learn about common scam tactics and how to protect yourself from them.

We are living in a kind of golden age for online fraudsters. As the number of apps and services for storing and sending money has exploded – so too have the schemes that bad actors have cooked up to steal that money. Every year, we hear more and more stories of financial heartbreak. What you don't often hear about is what happens after the scam?

On today's show, we follow one woman who was scammed out of over $800,000 on her quest to get her money back. That journey takes her from the halls of the FBI to the fraud departments of some of the country's biggest financial institutions. And it offers a window into how the systems that are theoretically designed to help the victims of financial cybercrime actually work in practice.

This episode was hosted by Alexi Horowitz-Ghazi and Jeff Guo. It was produced by Willa Rubin and edited by Keith Romer. It was engineered by Neal Rauch and fact-checked by Sierra Juarez. Alex Goldmark is Planet Money's executive producer.

Help support Planet Money and hear our bonus episodes by subscribing to Planet Money+ in Apple Podcasts or at plus.npr.org/planetmoney.

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People

Frances

Companies

Citibank, Apple, Amazon

Books

• Leave blank if none.

Guest Name(s):

• Leave blank if none.

Content Warnings:

Contains discussions of financial fraud and brief strong language.

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Jeff Guo
A heads up before we start. Today's episode includes a few swear words in the second half and full disclosure. We reference Citibank, Apple, and Amazon in the story. They're all NPR sponsors. This is Planet Money from NPR.

Alexei Horowitz Ghazi
When you talk to Frances about how she got lured into the scam that's taken over her life for the last year, she says the exact details are a bit of a blur. It starts with a voicemail, but I was also really sick around that week, so I don't think I. It just gets fuzzy on how I, like, got into it. Frances is a white collar worker in her forties, lives in New York, and we're only going to use her first name to protect her professional reputation. Now, she says, what is clear is that last May, she got this voicemail claiming to be from Citibank, flagging this suspicious outgoing wire for $50,000.

Planet Money
Shortly thereafter, I get a text saying, oh, this is David from the security department. And I'm like, the security department for Citi because of the wire. When she gets this guy, David Smith, on the phone, he explains that the suspicious wireless, it might be part of a bigger attack on her whole network of accounts. He asked her to check her Apple account, for example. And I do see these extraneous, like, these extra charges that are hidden charges on the Apple account.

Jeff Guo
Pretty soon she's actually getting locked out of her accounts. Everything just seems like chaos. Not only like the Citibank wire, that's one thing. Then you see my Amazon account is frozen. My Apple account, everything's kind of frozen.

Planet Money
And I'm like, whoa, what the hell? The story that David tells Frances is that she's been targeted by a group of russian hackers. He says he's been working with someone high up at the FBI to try to catch these guys for a while. And he tells Frances that if she wants to keep her assets safe, they're gonna need to work together to secure her home network and her various bank accounts. Frances, in that moment, she was primed to believe this story.

Jeff Guo
She was panicked. And the man on the other end of the phone seemed calm and collected and above all, competent. And he was offering all the might of the us government to help steer her safely through this storm. I'm a single person, you know, I live by myself, so. And you know I'm alone on this, right?

Planet Money
Whatever help that I can get, like, yeah, like, I want to make sure everything is secure. Like, let's fix this. Over the next couple weeks, David and Frances spend hours and hours on the phone together. By now, she's given him remote access to her computer, and David tells her that in order to figure out what the hackers are up to, they're going to need to move around some of her funds. Through a complicated series of transfers, Frances.

Jeff Guo
Gets set up with accounts on cash app and Coinbase. They start transferring some of that money into cryptocurrency. David warns Frances that this is a confidential government investigation, so she isn't allowed to tell anyone else what they are doing. He also insists that Frances shouldn't even look at her accounts. She should only sign into her bank and payment apps when he instructs her to verify her identity or approve various transfers.

Alexei Horowitz Ghazi
Frances goes along with this process for a couple of months. Only then does she finally decide to break this rule. She signs into her accounts to see what's been happening, and that is when she realizes someone has been steadily transferring money out of her investment accounts. When she tallies it all up, she sees that over $800,000, nearly all the money she's saved and invested for the last 20 years, has been transferred out of that account. Frances freaks out.

Jeff Guo
She immediately gets on the phone with the one person she thinks might be able to fix this problem, that David Smith from the security department. Well, I was kind of cursing and everything over the phone, like, where the f is my money? And Dave is like, your money is safe. You know, it's safe in, like, government. Accounts at this point, did it cross your mind at all that this guy who said he was out to help you might have been scamming you all along?

Planet Money
I felt helpless, like, if he's real, then somehow I'm going to get my money back. And if it's not, well, it's already gone. And I have to figure out what to do next and that maybe I have no choice but to see where things go.

Alexei Horowitz Ghazi
Hello, and welcome to Planet money. I'm Alexei Horowitz Ghazi. And I'm Jeff Guo. We are living in a kind of golden age of online fraud. As the number of apps and services for storing and sending money has exploded, so too have the schemes that bad actors have cooked up to take that money.

Every year, it feels like we hear more and more of these stories of financial heartbreak. What you don't often hear about is what happens after the scam. Today on the show, we follow Frances on her quest to get her money back from the halls of the actual FBI to the fraud departments of some of the country's biggest financial institutions. And we get a window into how the systems that are theoretically designed to help people like Francis actually work in practice.

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Alexei Horowitz Ghazi
By the time Frances discovered that more than $800,000, nearly her entire life savings, had been incrementally drained out of her investment accounts, she says she was already so deep into this supposed FBI investigation that it was hard to reckon with the idea of walking away. There actually was a part of me, admittedly, that really wanted, really, really, really wanted to be cooperating under a confidential case because it was so hard to try to face the fact that, oh, you've been scammed in a really costly way. It's devastating. You're like, oh, my God, can I even admit this? And so Frances spent the next several months in a kind of holding pattern, getting strung along by occasional messages from David Smith and his contact at the FBI about how it would be just a little longer until she got her money back.

It wasnt until this past December that Frances says the spell finally started to break. On Christmas, she gathered with her family for dinner at a chinese restaurant, her parents, her brother and his family and her sister. And full disclosure, I know her sister. Shes actually how I found out about this story. And over that Christmas dinner, Frances explains the whole situation to her family, how shed become the target of russian hackers and had been roped into a top secret FBI investigation to try and stop them.

Jeff Guo
How the government had secretly moved all her money into a secure crypto account for safekeeping. And after hearing all of this, her family looks at her and basically says, francis, there is no secret FBI investigation. These people have taken your money. And this is all a giant scam. And I was like, frozen.

Planet Money
I was really frozen. I was embarrassed and I didn't eat very much during that dinner. That's how embarrassed and that's how ashamed I felt. I was like, I feel stupid. I felt really, really small.

Alexei Horowitz Ghazi
Over the next few days, Frances family starts to try to help her pick up the pieces. They begin by reaching out to the actual authorities, telling them what happened. Right. Like, when you're the victim of a crime, you go to law enforcement, right. So Frances goes online, and she files complaints with the Federal Trade Commission and the FBI.

Jeff Guo
Her sister manages to set up a meeting with a real FBI agent who works on exactly these sorts of cases in New York City. So just a couple weeks after Christmas, Frances heads to the FBI office in lower Manhattan to see if they might be able to help. My brother and my sister went with me cause they wanted to hear it. They wanna know. And to be honest, I think they're better at asking the questions than I am, right.

Planet Money
I'm still in shock and embarrassment. The FBI agent basically confirms what Frances family had suspected, that this was a scam. The story had all the hallmarks of what the FBI has dubbed the phantom hacker scam. Thats where scammers impersonate financial and government officials in order to gain access to your accounts. But unfortunately, the agent tells Francis, the FBI is probably not going to open a case about what happened to you.

Alexei Horowitz Ghazi
So as soon as Frances made it to the actual FBI, shed kind of hit a roadblock. We reached out to the FBI to understand why they did not take on Frances case, but they didn't make anyone available for an interview. So we called up Kyle Armstrong. These days, Kyle works as the head of law enforcement relations at a cryptocurrency tracing company called TRM Labs. But before that, he spent 14 years investigating financial crimes at the FBI.

Jeff Guo
Cut his teeth on all sorts of Internet scams. You have an endless supply of the sort of romance scams and lottery scams that we all think of, like the nigerian sort of inheritance scam. You know, those walk into your office five days a week. Kyle says, you gotta think about Francis case. From the FBI's perspective, the FBI's number.

Kyle Armstrong
One priority is counterterrorism. Their number two priority is counterintelligence. Their number three priority is cybercrime. And so they are, by design, going to be prioritizing nation state style cyber and financial institution threats. So things like north korean crypto hacks to fund their weapons programs, which weve covered on this show, or the investigation into how the servers of the Democratic National Committee got hacked back in 2016.

Jeff Guo
That is where the FBI is putting the most muscle. As for individual cases of cybercrime, like what had happened to Francis, the FBI kind of has to pick and choose, because there are just so many of them. Whenever somebody falls victim to one of these schemes, theyre supposed to immediately file a report on a website called the Internet Crime Complaint center, or IC three. When complaints are submitted to the IC three, they arrive at an FBI facility in West Virginia. Thats where a staff of specialized analysts sift through each one to see if it potentially warrants an investigation.

Alexei Horowitz Ghazi
How are these FBI analysts doing the triage to figure out which cases to allot these limited resources to, to try to investigate? The primary factor in determining priority is going to be dollar amount. And so if there's a $50,000 case and there's a $5 million case, the $5 million case is going to be prioritized. Now, some of these cases do get routed to state and local law enforcement and other agencies, depending on the details. But for cases that could use the expertise of the FBI, Kyle says your chances depend a lot on where you file from.

FBI agents are distributed geographically into 56 field offices in all these different parts of the country, he says the upshot is that a million dollar fraud in, say, Columbus, Ohio, might be a higher priority than it would be in a place like New York City, where the number and frequency of million dollar scams is just much higher. But no matter where in the country you are, Kyle says the fundamental problem these days is that every complaint is competing with a record number of other complaints coming into the system. There are 2400 complaints received on a daily basis. Wow. There are 2400 complaints sent to the FBI every day about some form of cybercrime.

Kyle Armstrong
Yeah. Losses in 2023 were $12.5 billion overall. And when you compare these numbers to the 10,000 or so FBI agents in the country, you start to understand how hard it can be to get law enforcement bite on any particular case. And Kyle says the same dynamic exists at other agencies that investigate fraud, like the IR's or the secret Service, which have even fewer agents. Kyle says the second big reason the FBI probably didn't take Frances case was that by the time she filed her complaint, several months had already passed since the money had actually left her accounts.

And time, time is probably the most critical element of these cases, because the money can move immediately internationally and be cashed out. And once it has been exchanged for currency in a foreign location, it's very, very difficult to get back. As far as Frances could tell, when she pieced together the list of transfers and transactions from the past year, it looked like most of her money was moved to a coinbase account, where it was likely converted to cryptocurrency and scattered across various blockchains. And cryptocurrency can move increasingly incredibly fast. Sometimes these funds are cashed out in as little as an hour.

Many times it's, you know, a few days, maybe a few weeks if they're lucky. But if you wait six months to report the fraud scheme, it's going to be almost impossible for law enforcement to get your money back. Okay, so the FBI was not going to help. But Frances was still determined to find a way to get back some of what she'd lost. And the next step on her quest to try to recover her money was to go to the institutions entrusted with keeping her money safe in the first place.

Planet Money
After I met with the FBI in the office, I started contacting the banks, telling them that I'm filing a fraud report. There are actually laws on the books that say the banks have to help their customers after some kinds of cybercrime, sometimes to even reimburse some of the money that's been stolen. But whether those laws would apply to Francis situation is a little difficult to parse because the rules that govern this process can be pretty opaque. So we went to someone who knows their way around them. Im Carla Sanchez Adams, a senior attorney with the National Consumer Law Center.

Jeff Guo
Carla says the first thing you need to know is that theres this big federal law governing whether banks are required to reimburse their customers whove fallen victim to some type of cybercrime. Its called the electronic Fund Transfer act, or the EFTA, but the law only covers certain kinds of transactions. So that would be the peer to peer payment through Zelle or Venmo or PayPal. That would include ACH transactions, debit card transactions, things like that. Yet it excludes checks and it excludes wire transfers.

So the law covers automated clearinghouse transactions and apps like Zelle and Venmo. It does not cover checks or wire transfers. Now, in Frances case, her money appeared to have sometimes been moved using wire transfers so the EFTA wouldn't apply there. But sometimes the money had gone through apps like Zelle and cash app or ACH transfers, which could potentially qualify for protection. But Carla says even for transfers that the bank might be on the hook for, under the EFTA, customers still have to clear another couple of hurdles to qualify.

Alexei Horowitz Ghazi
First, customers have to have lost money to what the banks often think of as a fraud, as opposed to a scam, those may sound similar, but they're actually treated very differently by financial institutions. Yeah, banks often use fraud as a shorthand for a transaction that the customer did not authorize. So maybe the bad actors got a hold of your login information or hacked into your accounts and started firing off transfers. The bank might have to reimburse you for that. But then if it's one where the consumer was deceived and made the payment, they initiated it.

Carla Sanchez Adams
There's no statute requiring a financial institution to reimburse that consumer for that loss. So if the cybercriminals are really good at social engineering, they trick you into authorizing the transfers yourself. That is what the banks often think of as a scam, and the EFTA doesnt require them to make you whole. So not great for Francis. And even if some of the transactions the scammers had used might be what the banks call fraud, there is a second big question, and this one goes back to the issue of time.

Jeff Guo
If you wait too long to report a fraudulent transaction, the bank has less of an obligation to fully reimburse you. Now, financial institutions do have some latitude in how they apply laws like the EFTA and other state and federal laws that sometimes protect consumers. So consumer advocates and a group of senators have started pushing banks and payment apps like Zelle to clarify and expand their policies to reimburse customers who've been scammed into sending money. At this point, it isnt exactly clear which of all the transactions between Frances accounts were in fact authorized and which might have been initiated by her scammers without her knowledge. What is clear is that of all the transactions that shes reported to her financial institutions, none of them have been reversed or reimbursed, which Carla says isnt necessarily the end of the road if.

Carla Sanchez Adams
The investigation does not come out in your favor and it was unauthorized. Unfortunately, as far as the recourse, a lot of times it does take the help of a lawyer. Coming up, Frances goes in search of a lawyer, and she sets up one final conversation with her scammers, a conversation that she recorded. Hello? Yes, good afternoon, Francis.

Planet Money
How are you? Thats after the break.

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Try five pairs of frames at home for free. Go to warbyparker.com. Covered on this week's episode of Wild Card, poet laureate Ada Limone tells us how to give yourself a little grace. The nice thing about being in my mid to late forties, yeah, I forgive myself all the time. Join me, Rachel Martin, for NPR's new podcast Wild Card, the game where cards control the conversation.

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Jeff Guo
Not long after Frances finally met with the real FBI and started filing paperwork with her financial institutions, her scammers, the so called David Smith, reaches out to try to schedule another call between Frances and this supposed FBI agent, Robert Johnson. He tells her they want to give her an update on her case. So in early February, she sets up a phone call, but this time, potentially with an eye toward a future investigation, she decides she is going to record the conversation. I was so angry. I was like, I want to get these efforts because I want to at least get the information and show them like, I'm not making this up.

Planet Money
These are people that been in contact with trying to convince me that my money is safe. But Frances, she was still kind of of two minds. Even after telling her family what she'd been through, even after going to the authorities to try to get help. She was still hoping that maybe these men on the other end of the phone would turn out to be legit, that her money really was safe, and that this was all just some big miscommunication between different parts of the FBI. Yeah.

Alexei Horowitz Ghazi
Before working on this story, I don't think I fully understood just how hard it can be to rip yourself from the fictional world that some of these social engineering scams weave for their victims. Like how hard it can be to break free. But think about this from Frances perspective. When she'd gone to actual law enforcement, they told her they couldn't really do anything for her. Same for the banks.

But the scammers, not only did they seem to actually care about her situation, they were the only ones offering her any hope that she'd be able to get her money back. There was always still a part of me that I was thinking, like, maybe it's still. Like, maybe it's still real, and that maybe I just need to kind of, like, hedge my bets. Frances call with the scammers starts around midday. She talks to David Smith for a little bit, and then the supposed FBI agent joins the call.

Robert Flynn
Hello, merchants. This is Robert. How are you? It was Robert, was it? Sorry, I forgot.

Planet Money
Robert what? Robert who? Sorry, Robert from FBI. From FBI. Last name Flynn.

Say again? Flynn. Yeah, I thought it was Johnson last time, but maybe I missed that. Exactly. But even in the face of these seemingly obvious holes in the scammers aliases, you can hear Frances start to engage with them.

Alexei Horowitz Ghazi
She's obviously angry, but she also acts as if she is, in fact, talking to a real FBI agent. And if she could just get him to take her concerns seriously, maybe this would all work out. So I need some proof that this is a real case. I need. This is time to come up with, like, real, substantial proof that you're working on an FBI case that is for me, and that my money is indeed somewhere.

Robert Flynn
I totally understand your concern. I totally understand your paying. As you know that in our us government, we don't have any single case. We have. We have a bunch of cases which we are dealing in one time, and that is the reason sometimes we are getting delayed.

Planet Money
And how do I know? The call goes on and on like this? In one moment, Francis will hold the scammer's feet to the fire. As far as I can see, I'm being tricked. I'm being scammed.

It looks like a duck. It quacks like a duck. Then in the next moment, she'll start to slide back into the scammer's narrative. As you can see, that your money is totally safe in a safe, secure wallet. And you're gonna get your competition money.

Robert Flynn
$200,000. Which wallet? Like, I'm trying to understand. Like, where is this wallet? Like, it is not entirely clear whether after nine months of being manipulated by these scammers, Frances will finally be able to break free from the story they've been telling her.

Planet Money
This is completely upsetting. But then all of the pain and confusion she's been feeling starts to boil over. Something on paper, talking on the phone is complete bullshit to me. I've lost $800,000 from my retirement over 20 fucking years. Saving for my retirement.

You guys just go, like, withdraw, make these transactions like it's monopoly money. The entire conversation lasts a little over 30 minutes. And all the way to the very end, you can hear Francis wrestling with these two conflicting realities. You're bullshit. And I will say goodbye.

Thank you very much. It's been great working with you, but sorry, I cannot do anything more. I'm not. Okay. Thank you.

Robert Flynn
I'm not. Thank you. Thank you. Bye. You have to.

Planet Money
Bye. No, no, no. Goodbye.

Alexei Horowitz Ghazi
With that last goodbye, Frances finally does it. She manages to hang up the phone once and for all and break contact with the men who'd lured her into this elaborate financial trap over the last year. It was the last time she spoke with them. In the months since then, Frances hasnt gotten any further with law enforcement or her financial institutions. So shes engaged the services of a couple of former department of justice lawyers specializing in cybercrime.

Jeff Guo
Theyre working for her on contingency, meaning theyll only get paid if theyre able to recover some of her money. Her lawyers are hoping to trace Frances money across the various blockchains and then get the courts or law enforcement to help freeze and seize whatever their able to find. And they're looking into whether Frances financial institutions might bear some legal responsibility for the money she lost. Frances, she's trying to get her financial life back on the rails, and she's hopeful that the lawyers will be able to help with that. It's new.

Planet Money
It's uncharted waters for me. You know, I hope I'll see a light at the end of the tunnel. I don't know. You know, it is definitely complicated. We spoke to Francis lawyers as part of our reporting, and they say the real problem here is that the banking laws are outdated.

Alexei Horowitz Ghazi
They just weren't designed with the current technological landscape in mind. On top of that, the law enforcement system is not set up to handle the sheer number of people falling victim to these scams every year. As for whether Frances will get any of her life savings back, her lawyers say that is still very much up in the air.

Jeff Guo
Coming up on planet money, that one time the FBI launched a phone company for criminals. His offer is that the FBI can take this company and use it for their own investigations. Why doesn't the FBI just run its own encrypted phone company and then put in whatever backdoor they feel like they could run a tech startup for organized crime. The story of one of the weirdest tech companies and the largest sting operation of all time. That's on the next planet Money.

Alexei Horowitz Ghazi
Today's episode was produced by Willa Rubin and edited by Keith Keith Roemer. It was engineered by Neil Rauch and fact checked by Sierra Juarez. Alex Goldmark is our executive producer. Special thanks to Kieran Raj and Scott Ferber. I'm Alexei Horowitz Ghazi, I'm Jeff Guo.

Jeff Guo
This is NPR. Thanks for listening.

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