Look at me. I live in luxury. I travel all over the world.
You have the third kind, we see all over social media.
Yes, you could be the same. You could be the same.
All you have to do is imitate me.
If you don't make this investment by Friday, others will.
And you will lose the opportunity of your life.
So let's say like limited amount of investments or something like that.
We call it the creation of artificial scarcity.
Once I have your name and your address and your social security number, I can get a credit card.
So you can apply with just those information in any bank. Online. And I can get a credit card.
If you receive a request to pay in advance with cryptocurrency, don't.
Period. Scammers and swindlers create a sense of panic, a sense of urgency, a sense of immediacy, a sense that you have to do something or you're going to miss an amazing opportunity.
You're going to miss a lot of money or something bad is going to happen to you.
Today in the studio, we'll be talking about financial frauds, scams, embezzlements with a well-known expert on the topic, Sam Wachman.
Thank you. It's great to be here.
So what kind of people are getting scammed usually?
Three kinds of people.
People who are greedy, they want to get rich quick.
They want to make money out of the air without any commendurate investment or commitment, hard work, no hard work, no studies.
They just want to wake up in the morning and make money.
These are the greedy people.
Then there are the kind people, people who are kind.
They want to help other people.
And so they are approached to help and they give money.
And the third kind is people who want to trust other people.
They have a trust deficit.
They're usually very suspicious and very doubtful and very paranoid.
But deep inside, they want to be able to trust someone.
And then the perfect person comes along, it's a swindler, a con artist.
And it's called con artist because con is confidence.
Confidence artist.
It's someone who triggers confidence and trust.
And then you give him your money or whatever.
So for this, the third kind of people, you probably have to use the slow approach.
It's a lot of investment and work.
You have to overcome their defenses.
You have to prove to them that you're reliable and trustworthy and responsible.
They can rely on you.
So at the beginning, you give.
This kind of scammer gives at the beginning.
And only much later takes.
But what he gives is a fraction of what he takes.
I understand.
So where is the red line?
How can we identify the frauds and scams?
Most frauds and scams start via communication.
And in the vast majority of cases, this is written communication.
The written communication is poor.
The grammar, the syntax, clearly written by people who are less than literate, ignorant people, criminals.
So your first warning sign is if the text that you're receiving is badly written.
The second warning sign, if the offer is too good to be true, because if something is too good to be true, it is not true.
If you're offered, for example, don't work hard and make a lot of money.
Or get rich quicker than you've ever imagined.
Or look at me.
I live in luxury.
I travel all over the world.
She had the third kind with you over social media.
Yes, you could be the same. You could be the same.
All you have to do is imitate me.
And so on and so forth.
So these kind of promises are a serious alert, serious warning sign.
And the last point is scammers and swindlers and con artists, they push you very hard.
We call it hard sale.
They push you very hard to make a decision.
And they want you to make a decision now.
They don't give you time to think.
So you have deadlines?
They bombard you.
They bombard you all the time.
And yes, they post deadlines.
They say if you don't enter this scheme, if you don't make this investment by Friday, others will.
And you will lose the opportunity of your life.
So let's say like limited amount of investments or something like that.
We call it the creation of artificial scarcity.
Artificial scarcity.
So if someone approaches you, makes you promises that sound unbelievable, incredible, too good to be true, and then pushes you to make a commitment or to give him money or to invest or then better walk away.
Well, maybe the Nigerian prince that needs some $200 maybe-- We'll come to it.
We'll come to it.
One of the scams is this type.
So what kind of scams there are?
You mentioned earlier when we talked that there are nine types or 13.
13, of course.
So can you tell me more about it?
Yes, but I will have to use the list, I'm afraid.
Of course.
The first type is known as a charity, a charity scam.
Now, most of these scams are not implemented all over the world.
Some countries have typical scams.
So for example, there is the famous Nigerian scam, also known as 419 scam because in the Nigerian criminal code, Article 419 deals with this kind of scam.
So it's known as a 419 or advanced fee scam.
This is a Nigerian thing.
In the United States, you have some types of scam that you will never see in Macedonia.
And in Macedonia, you have types of scam, which are very rare in Germany, et cetera.
But I'm going to review all the scams, regardless of their geographical locations.
So the first one is charity.
It is when someone approaches you and says, do you remember that we had a conversation a few years ago?
Or do you remember our last communication?
I'm just following up on your promise, or I'm just following up on-- and so you feel uncomfortable, you feel unpleasant, you come deny, and you say, yeah, can you just remind me?
And he drags you into a charity.
He says, this is a charity.
We're helping poor people.
We're helping children.
We're helping sick people, and so on.
Can you give $200, $2,000, whatever?
And this is known as a charity scam.
If you are approached ever by someone who says that you have met before or corresponded before and you don't remember it, say goodbye nicely.
That's a scam.
Number two, a banking scam.
And also, it's known as a debt collection scam.
A banking scam is simply when you receive an email from your bank, and the email says, can you fulfill your details?
Can you fulfill your identity, your password?
Never do this.
Banks never ask for your password online via email.
Period.
No bank does this.
I have a very conflicted relationship with the microphone.
You're not the first one.
No bank does this.
Similarly, if someone approaches you and says, I know that you owe money, I know that someone owes you money.
I can collect the money for you.
And I want 40% of the collection.
Never do this.
In the vast majority of cases, he will collect the money, and you will never see him again.
So that's a scam.
But the main reason for this is to collect information about you, your identity, your name, your address, your password.
So they collect this information, and they create a profile.
This is known as identity theft.
And what can they use those information for?
To get credit cards, for example.
Really?
Once I have your name, and your address, and your social security number, I can get a credit card.
So you can apply with just those information in any bank? Any bank, online, and I can get a credit card.
Period.
Now, to obtain your social security number, if I write to you as your bank, naturally, it will give me your social security number.
Be very careful to give information about yourself online. Never do this.
That includes even your address. Never do this.
Definitely don't give your bank account numbers.
So what are the information that we can provide to people that ask us? Like name, surname, that's it?
Once you are on a website of a bank, or a website of a credit card, first pay attention that the website is secure. You know that the website is secure because it's not HTTP. It is HTTPS.
Second thing, make sure that it is the website of the bank, or of the credit card. Play around. Travel. Search the website. Look at other pages. See what's happening. Because a typical scammer would create a facade website, which looks like the website of your bank, but it has only two pages. Then you will find that there's not much investment. Yeah, not there. There's no depth.
We call it no depth.
The next thing is people come to you and say, listen, I know that you owe money. And I can reduce the amount that you owe. I can settle it. I can restructure it. It's called debt relief. And how do they get this information? They don't.
They don't.
The vast majority of people owe money. So they randomly choose a victim? Yes.
If I were to tell 10 people, I know that you owe money. I would be right eight times. Eight out of 10. And then they say, OK, we're going to arrange this for you. We're going to reduce the amount, and so on and so forth. But you have to pay something. So we will give you a loan. And you use the loan to pay the reduced amount so that you get rid of your debt. But of course, they give you a loan. And then you owe the money. And the interest rate is 20% a month. And the money is never used to pay your debt. And you remain stuck.
This is called sharking. This is practice.
The next thing is the famous Nigerian scam, 419 advance fee. And I've come across this in Macedonia a lot. People are being approached. And it's usually a politician or someone pretending to be a politician or a prominent figure or a celebrity.
I have a lot of money. The money is stuck in a bank. I cannot transfer it because of this reason or that reason. I cannot transfer it. I would like to transfer it to your account. And then you give me 60% of it, and you keep 40%.
And it's $10 million. I've heard about it, like a literal example. A Canadian bank manager contacted a friend of mine. And he told her, you have the same last name as the guy who passed away recently. And he doesn't have any heirs. He doesn't have any close relatives or whatever. So if you pay $50, $100 to start a procedure for-- we can transfer the money to your account. And you will be the one who will get the money. And you will give me more than I have for the bank manager. And you'll keep less, but-- You will still make a lot of money.
This is called advance fee because you are required to provide some fee in advance before you receive the money. They tell you, OK, we're going to use your bank account. We're going to transfer $10 million to your bank account. But to do that, we need $15,000 for fees and commissions and so on and so forth.
So you send the money and you never hear from them again.
This was not a bank manager, the guy who wrote.
It's not a politician. It's not a celebrity.
These are scammers working in factories. These are called scam factories in Nigeria. There are thousands in Nigeria that are doing-- not only Nigeria, West Africa.
And this is known as advance scam.
Another variant of advance scam, your relative died. Someone died in the United States or Canada or Germany and so on. And we discovered via genealogical research that it's actually your relative. So he left you a lot of money and we want to transfer the money to you. But to do that, we need you to have a registration fee with us. It's $2,000. And your relative left you $2 million. And you have to pay $2,000 because we are lawyers. We have to get our fees and so on. And then we will invite you and we will open the wheel and you will receive $2 million. That's another kind of nonsense, of course.
The next thing is known as grandparent scam. Grandparent scam is when someone writes to you, I lost all my credit cards. I lost all my money. I'm stuck at the airport in Mombasa and I'm your long lost brother or I'm your cousin or I'm your uncle or I'm your grandparent. Can you send me $200 or $2,000 just to get me out of this trouble?
So there's an appeal to kindness and generosity. And these people identify as your relatives, as someone you know, as your friends. They hijack identity. So the message can really come from the Facebook account of your good friend.
Yeah, I've seen that. Or from an email, the email of your good friend. Because what they have done, they have hacked the email account and so on of your good friends and now they're using it to send you.
So this is known as a grandparent scheme. I'm in trouble, send me money.
A colleague of mine has been a victim of that. And all of a sudden, I mean, I haven't spoken to him at all. We see each other at work and that's it, high, high. How's the friends and family? That's it, like small talk. And all of a sudden he writes to me and says, I started doing cryptocurrency in 48 hours. I made like $50,000. This is my car right now. And he speaks in some Macedonian. But I don't know the guy, so I don't know some weird Macedonian. I don't know the guy. So I think, OK, he's using like-- Literary language. And not common, like say people in scopia speak. And it was weird. And when I contacted him in person, he said my Instagram account was hacked. So this is what I said at the beginning. It's badly written. Something is wrong. Something doesn't sound right. The language is too literary. Or on the contrary, it's extremely badly written. The grammar is wrong. Syntax is wrong. Words that expired in the 19th century are used. And so on and so forth.
You see that something is wrong. It was like literally Google Translate. Yes, it was Google Translate. Probably. No possibility.
Next thing is mail or prize fraud. You won a big prize. And now to receive the prize, you have to send $200 and so on and so forth.
Similarly, a jobs fraud. If you apply online, we will guarantee you a job with $100,000 salary in Singapore. Now all you have to do is fulfill the application online. And there is a processing fee or registration fee. And of course, you never heard from them again.
In the previous podcast, there was a TV presenter.
And she said, I applied for a job in Rwanda.
So she said like it was probably a scam.
But I wanted to know when did I apply for a job in Rwanda.
And it was funny.
So this is when it ends well.
When it ends badly, if you're a woman, they tell you to come.
They tell you, you got the job.
The job is yours.
Come over.
And then they prosecute you.
And this is known as human trafficking.
Never ever apply for jobs online with institutions or organizations you don't know or you've had no personal contact with.
Never do this because in the vast majority of cases, we are talking about criminal gangs that are dealing with human trafficking.
The next thing is romance, romance scam.
This is known as love a boy method.
This is when you make a woman-- usually the victim is a woman.
Not always, but usually.
You make a woman fall in love with you.
And then you ask her for a loan.
You ask her to move money for you in a money laundering scheme.
So you're using her account to move money.
Or you ask her to buy and sell cryptocurrency on your behalf.
We can discuss cryptocurrencies a bit later.
Next thing is money transfer or mobile payment services and apps and so on.
They offer it to sell you something.
So you pay for the goods and they are never delivered.
They never arrive.
It was a common thing here in Macedonia.
One of the mobile service providers had a price game.
So eventually, when you were the one chosen to get an iPhone-- so basically, you have to write an SMS or call some number.
It was a number that charges a fee and it's a fraud.
That's a separate type.
Oh, that is the one.
That's a separate type.
This is when someone comes to you and says, you're selling cups.
I want to buy 100 cups.
And he sends you the money.
He sends you the money for 100 cups.
So you send the mugs abroad.
You deliver the mugs, 100.
And then he cancels the payment.
Another option, he's selling mugs.
And he says, OK, this is the price for you.
I'm giving you a 60% discount, 70% discount.
You send the money and you never receive the mugs.
So these are known as trading scams.
Not only are there problems with delivery and payment, but they steal your identity.
And after that, they pretend to be you.
What you mentioned is something else.
This is known as SMS phone scam.
They send you an SMS.
If you respond to this SMS, then you are charged an enormous amount of money.
Or they call you.
And if you respond to the phone call, the number that you see is fake.
This is called spoofing.
I can spoof my phone number so that you see a number from Macedonia.
So they use some kind of software to do that?
So you see a number from Macedonia.
You call the number from Macedonia.
You're actually calling Tokyo.
And you're going through their exchange and they are getting commission.
And so they make thousands of dollars.
You have to pay $15,000, $20,000 for this phone call that you thought you were calling someone in the Di Balmalo.
So this is known as a phone or SMS scam.
It also involves phishing, phishing, phishing.
Phishing is obtaining information from you, including personal data, which could be compromising.
You're obtaining information to you by pretending to be someone else.
So it could be your bank manager, your boss, your colleague.
You receive a message from Victor.
Do you think it's from Victor?
It's not Victor.
And so on.
And then they obtain information from you by asking you all kinds of questions via email or by making you fulfill a form online.
This is exceedingly common.
Phishing is exceedingly common.
Actually, 50% of spam is about phishing.
It's an attempt to obtain.
Information about yourself is money.
It is monetized.
It is aggregated.
It is sold.
There's something called data brokers.
Data brokers collect information about many people and they sell it in packages.
Your information is valuable. Don't give it away like this.
Yeah, but let's say if you're a marketing agency, you need information about people.
How do you know if you're buying from a legitimate service provider?
Never give your information via phone, email, or online. Period.
And if somebody calls us, let's say he's doing a survey or he's offering a product.
Never give, which part of never is not there?
Yeah, but the thing is, he says like, I got your information by your phone number by random, it was randomly chosen.
Is it really randomly chosen or he had some information, my information, but bought from someone?
He bought your information, of course.
Data brokers.
So it's not randomly chosen when somebody is calling me to offer me a product.
It could be randomly chosen.
They buy huge databases and then they randomly sample numbers.
And in some cases, it's legitimate.
It's legitimate marketing effort or some prize or rewards, but you should assume it's not legitimate.
So it's a very simple rule.
Never give any information online, by email or by phone, unless you absolutely know who you're talking to and who you're dealing with.
If I call you, even that is not safe.
But if I call you, the chance that it is me because you recognize my voice is pretty high.
Yeah, but they, I can change your voice as well.
It can.
I said, even that is not safe, but let's say that's a 1% chance.
But we should avoid talking on the phone.
Yes.
In today's world, giving your identity is dangerous.
Constructing your online identity, identity theft, can lead to horrible situations and does lead to horrible situations.
They can impersonate you, not only to obtain credit cards, they can impersonate you in crime.
For example, if they are money laundering, they can use your identity as if you have the money, you're laundering the money, and you can be caught up with Interpol or there have been cases like this, drug couches, we're using stolen identities.
The next thing is lottery, lottery or prize scams.
You're informed that you want the lottery or you want some prize and you have to send some money in order to release the winning.
And gift cards and so on.
The last very important type of scam is cryptocurrencies.
The problem with cryptocurrencies, it's non-refundable.
If you pay with a credit card and you have some problem with the delivery or you regret your purchase, the policy of the credit card is to return your money fully.
No questions asked.
This is not the case with debit cards.
With a debit card, you cannot reverse the transaction.
And similarly, with a cryptocurrency, you cannot reverse the transaction.
You've paid, you're doomed.
And the problem is that the other party is anonymous.
It can hide its identity because you are dealing wallet to wallet.
It's number to number.
You don't know who you're dealing with.
So cryptocurrency is a very easy way to scam.
That's why terrorists and criminals are using cryptocurrencies.
If you receive a request to pay in advance with cryptocurrency, don't, period.
Nevermind how reliable and honest it sounds.
If Amazon itself approaches you and says, you can buy this book with cryptocurrency, paying now you'll receive the book in three days, don't.
Simply don't.
End of story.
No thinking here.
Cryptocurrency is not for payment.
It's too young technology, too underdeveloped.
And too open to crime and worse. - So you mentioned like the credit card policies to return your funds if you ask.
Let's talk about the bank and financial institutions.
They allow these scammers to open legitimate bank accounts.
Should they be held accountable if they allow this to happen?
Let's say they allow somebody with stolen IDs to open a bank account.
And he has deposits on his bank account and then he immediately transfers them by cryptocurrency or something else.
Should the bank be held accountable in due reimbursements to the victims in this situation?
Banks are not detective agencies.
They have something called KYC.
What is that?
It's Know Your Customer.
So they are obligated by law all over the world to ask you quite a few questions.
Who are you, address, your tax number, your identity number, social security in the United States, and so on so on.
Do you have accounts in other banks?
In which other banks do you have accounts?
These are all legitimate questions under the FATF.
FATF is the directive for money laundering, the global directive for money laundering.
So all the banks engage in KYC, Know Your Customer.
But this is limited because of course you can lie.
You can lie on the phone.
Let's say internet service provider, they allow you to have a legitimate email, let's say for a dollar a month, or you can buy a domain for $10 per year or something that you can buy a server to host the domain and website.
So basically, should they be also accountable if they allow these types of scam?
No, they are not and they should not.
They are not detective agencies.
In the United States, there is a law called the Digital Millennium Copyright Act, the DMCA, the law states clearly that service providers and online platforms such as Wikipedia, and forums and social media, they're not responsible for either the content or the activities which is carried on in the platform.
Because you can't verify identity in any meaningful way.
Facebook and others are trying to identify, to verify your identity by asking you to send a scan of your passport.
It's also nonsense.
It's also nonsense.
Today we can falsify, they can falsify whole videos.
And for the first time in the history of technology, these videos and definitely audio, falsified audio, definitely.
But even videos can no longer be told apart from real ones because what a marking technology is very primitive.
So we need to tell if a video is fake, you need NSA laboratories.
You need like, you know.
And no one has access to such laboratories, even in the commercial sector, even in the judicial sector.
No one has access.
So today you don't know if a video is real or not.
So basically you didn't mention AI in the 13 types of scam you mentioned.
So will there be another category in the future?
What do you think about it?
Right now there are no meaningful AI scams.
Deepfake is not AI.
Deepfake is video technology.
Similarly, when you falsify audio or when you create avatar, I can, for example, sample you, sample your image.
Then I can sample your voice if you are sufficiently.
For example, I have online thousands of videos and someone can sample my image, sample my audio and create a deepfake.
Actually, they have, I have a few deepfakes.
They create a deepfake of me and it's going to do with artificial intelligence.
Artificial intelligence can lead to scams because it imitates human speech and human interaction.
Artificial intelligence can pretend to be human.
And that's the big fear.
Today, chatGPT for Gemini, the new artificial intelligence technology of Google, they imitate humans to the point of failing the Turing test.
I will explain what it is.
The Turing test is a test whether if you're exposed to text, you know that this text has been written by human being or by computer.
Today, you cannot tell.
And so the Turing test has been passed.
When today you talk to artificial intelligence, you have no way of knowing whether it's human or not.
And so because of this, artificial intelligence can manipulate you psychologically to do many things that you wouldn't had you known that this is a machine.
Already many companies are using artificial intelligence in support services.
So when you call the support of some technology companies, you're talking to artificial intelligence.
And it sounds like a human being talking to you.
So it's starting, it's already starting.
Now imagine that you get a phone call and artificial intelligence agent pretends to be a technician. It tells you, listen, I'm from Microsoft. We would like just to verify or activate your windows. There's some problem with activation. What you're into. Can you please click here and click here and click there before you know it, your computer is infected and hacked.-
Luckily we here in Macedonia all use the cracked Windows software. So.-
Yep.
But even not cracked. So many applicable scams here in Macedonia. Even not, even not, it is very applicable because if you're using a hacked or cracked system and you get a phone call from Microsoft saying, something is wrong with your activation. We're going to disable your windows. You know that, you know you're using a cracked system. So it's a problem, you will panic.
Scammers and swindlers create a sense of panic, a sense of urgency, a sense of immediacy, a sense that you have to do something or you're going to miss an amazing opportunity. You're going to miss a lot of money or something bad is going to happen to you.
A process known as catastrophizing.-
So basically, how does this process work?
Let's say you're a scammer. How do you choose your victims? How, what's the psychology behind it?
Let's say if you're using internet, you're using email, you're using SMS messages, you're using phone calls.
How does this process work?
Each scammer specializes. Some scammers go on campaigns and they send thousands of videos. Nigerian scam is like this. They send thousands of videos and a thousand emails, I'm sorry, and they get a response on one email or 10 emails and that's enough, covers the expenses.
Some scammers target high net worth individuals. For example, Bernie Madoff or similar people. They target high net worth individuals and they create fake investment schemes or fake investment firms. And this is a very long-term process.
Bernie Madoff took 30 years to realize his scam. So you can generalize.
Some people canvas, canvas means to send thousands of SMSs, thousands of phone calls, thousands of emails and to capture 10 people, which is more than enough, you cover the expenses.
And some people target, they're targeted scammers. And some people use technology only and some people combine technology with personal touch. So they would deceive you via technology and then fix a meeting with you. And in the meeting, they would be charming, they would be, you know, they would-- - Like even in person or just via?-
In person, and they would study you. They would study what are your preferences, your beliefs, your values, and they would resonate with you. They would imitate you so that you think you found your soulmate. - Yeah, many of these information are available online. We have open Facebook, Instagram profiles, so yeah.
And I would like to also ask you about what's the victim's psychology?
Like we should come back to that as well. Like somebody offers something and I'm being greedy, I'm being-- - Kind or?-
Kind or?-
Or I want to trust someone. I feel alone, I feel lonely, I want to trust someone. - So where is the red line?
And someone says a phrase or we see something that's too good to be true.
When do we say that's enough?-
If you're greedy and someone offers you a lot of money with minimal investment and no work at all, walk away.
If you are kind and someone approaches you and the story sounds suspect, contact the person.
If you are, if you lack trust, if you're suspicious and paranoid and you feel lonely and you want to trust finally, this is the romance, the romance comes like that also.
These are lonely women.
They want to love, they want to trust.
They've been lonely for too long.
They will do anything, not to be alone anymore.
Then if you're suspicious and lonely and so on and so forth, realize that you're vulnerable and be a lot more alert and never ever create a relationship online.
It's funny that you mentioned the romantic scheme because for men, it's illegal to do so.
And for women, I can just say it's like legalized.
There's men that watch these women on OnlyFence and other platforms and they send them money and large amounts of money.
And that is legalized.
And when men are doing it, it's like a scam.
So there is a thin line about this subject, but I'm not going to move off the topic.
I would like to ask you, let's say, you realize you've been scammed.
Something doesn't end up.
You don't receive your product.
You don't have the amount of money that was promised to you.
What's your next step?-
First, you must realize your chances to recover your money are very close to zero.
It's gone.
Then whatever you do is for revenge or for justice.
But it's not in order to get your money back.
Then if you're in the United States, you can complain to the FBI.
They have several departments that deal with fraud.
They have a specialized department for Nigerian scams, for example.
All major law enforcement agencies deal with scams.
They have specialized departments which deal with scams.
But the retrieval rate and the ability to punish the scammers, they are extremely close to zero.
These scammers, to start with, they use artificial, they use stolen identities.
They use blockchain technologies.
So they use wallets with numbers.
They use bank accounts offshore, which are open for one day, money arrives, transferred, closed the next day.
Thank you, Sam.
This is it for today's podcast.
I hope you enjoy our conversation and I hope that the viewers at home will feel the same.-
Thank you for having me.