Fraud Today, April 20, 2015

Our local CBS affiliate has provided very good coverage of the Money Smart Week events at http://wlfi.com/2015/04/14/tippecanoe-countys-events-for-money-smart-week and http://wlfi.com/2015/04/17/learn-identity-protection-at-financial-fraud-seminar.

This morning it also reported about a local business that was a victim of fraud – one in which a caller claimed to be from the electric company and the business owner, even knowing that she had paid the bill, applied nearly $2,000 to a prepaid card.

I’ve met very bright people who have been victims of fraud and in hindsight they feel foolish.  But it’s very easy to become a victim and it takes guts to publically admit when you’ve been taken.

Desperation, fear, and a sense of urgency seem to get many people into trouble, as with the Grandparent scam and the payment of phantom or nonexistent debt.  Add feelings of helplessness and hopelessness, and we’re more highly susceptible to fraudulent foreclosure services and credit card debt reduction schemes.  Every time someone does fall, it empowers the cons and puts even more of us at greater risk (and in the case of robocallers, greater annoyance).

Several years ago a local insurance agency failed to report an embezzlement, which led to what the newspaper later described as the “pass-along problem of embezzlement”.  It all came out into the open a few years later when the individual embezzled from a local nonprofit agency.  I was working in this agency at the time and had known the individual since elementary school, and never would have dreamed it of her.  On the Friday that she was escorted out of the building I was away at a conference, and on Monday I was puzzled that the normally upbeat atmosphere was gloomy.

This agency did report it, and when the investigation was completed a year later she was arrested in Arizona where she was working as a bookkeeper.  One long-time small business owner that I had talked with seemed to shrug it all off, explaining that embezzlement is just another type of employee theft.  Once you discover a hole you plug it, and then wait for the next one to spring.  Even though the agency took a lot of heat, some good that resulted is that local nonprofits learned how to tighten up internal financial controls.

Since there’s so much that is out of our control it certainly makes sense to at least control what we can.  Keep learning, and think through financial decisions with as little emotion as possible.  The fewer personal details that you put out there – and the fewer places where you do – the better.  Be vigilant, and help friends and loved ones when it looks like they’re headed for trouble.