Transcript
Speaker: Why? Why are we allowing this to happen unabated? Why are we not putting everything we can into the crime of fraud? And part of it is because we don't even look at it as a crime anymore.
Speaker: Have you ever almost replied to a scam text message about a delivery address update or clicked a link to check why your PayPal account is going to be charged? Do you know someone who did? There's a notion that people who fall for scams are vulnerable or elderly or maybe have lower intelligence, which is why people are ashamed to report if they get scammed. The reality is one moment off guard and it can happen to anyone.
Speaker: Scam Rangers, a podcast about the human side of fraud and the people who are on a mission to protect us. I am your host, Ayaarat Bigar Levine, and I'm passionate about driving awareness and solving this problem.
Speaker: Hello and welcome to the first episode of Scam Rangers. Online scams cost people and institutions billions of dollars globally every year. And this number is growing year over year. Scammers are getting more creative in their trickery and have shifted a lot of focus from hacking into online banking systems to simply convincing people to transfer their money to the criminals.
Speaker: In each episode, we will interview a scam ranger who is on a mission to help victims of online scams. I'm delighted to welcome our first guest on the podcast, Kathy Stokes. Kathy is the director of fraud prevention programs at AARP and is a nationally recognized leader in the consumer fraud arena.
Speaker: Kathy leads ARP's social mission to educate older adults on the risks that fraud represents to the financial security. Since taking the helm of the ARP Fraud Watch Network in 2019, she and her team have vastly expanded ARP's leadership in this space, including the creation of a new victim support program, a multi -year campaign to end the use of gift cards and fraud,
Speaker: Kathy, welcome to the podcast. It's a pleasure to have you here. I'm so glad to be here. Thank you for inviting me. Great. So let's dive in. Actually, before we dive into today's topic, I wanted to ask you if you can tell me a little bit about yourself and your work. What does a day in your life look like? There's so many facets to the work that we do. On a day to day basis, I'm a manager of a team. I'm dealing with budget issues.
Speaker: connecting with people all around AARP. Our enterprise has so many different pieces of the fraud work. You know, there's that we have the bulletin from AARP and AARP the magazine and they cover fraud. And that we have our perfect scam, which is a hit podcast that I hope other folks have heard about because it's really a great program. And we have the website where we have all of our education materials and we're doing webinars. We have a lot that that we're doing. So in addition to sort of the management
Speaker: and doing everything we can to work within all of the many channels AARP has to reach consumers, particularly older adults, but it really applies to everybody with a message of fraud prevention. We know that if an individual knows about a specific scam, they're 80 % less likely to engage with it. And if they do engage, they're 40 % less likely to lose money
Speaker: or sensitive information. So that's our calling card for the Fraud Watch Network. And it's why we're out there doing so much education because we know it has impact. But we also know that education is not going to solve the problem. So we look at bigger issues. What is the societal reality of a fraud in the United States? And to try to tackle some of the just fundamental issues in the way our country does or importantly does not.
Speaker: respond to consumer fraud. So when did you decide to focus on this topic on fraud and driving awareness? And what was the point where you said enough is enough. I need to be an activist. I need to focus on this. Well, it's funny. I have a varied career, but it all ends up tying together pretty nicely. I was a communications expert in government affairs for a bunch of years and really got interested in retirement security.
Speaker: and end up sort of following a path to teaching employees through their companies how best to make use of their retirement options, you know, the 401k. And if you have a pension, understand how it works and how many years you need to vest and all that kind of stuff. And then when I came to AARP, I was in a different role, but the fraud watch network program got moved in close to the area that I was working in. And I ended up being like the interim leader.
Speaker: And I'm like, well, that's interesting. So I'm kind of moving from talking to people about how to prepare for retirement. And now I'm talking for those people who have prepared, your finances are at risk because consumer fraud is at an epidemic level. And I initially took the job as sort of like a manager. And then I got in deep and I'm like, why, why are we allowing this to happen unabated?
Speaker: Why are we not putting everything we can into the crime of fraud? And part of it is because we don't even look at it as a crime anymore. And so that's what got me going.
Speaker: Yeah, you know, it's kind of like I always think about cyber security in general, kind of like, you learn about it, it's kind of like the matrix, you swallow the pill, and now you have the knowledge so you can't not act. And it's absolutely the same with scams and even more so. So I totally understand that kind of passion. So tell me about one particular victim story that changed you. Well, there were many.
Speaker: But the one that has continuing impact on me is one told by a woman who now works with us to try to get the message out. Her name is Kate, Kate Kleiner. She's a regional minister. She spent 12 years taking care of her husband before he passed. She's in her sixties. She takes care of hospice dogs. I mean, she's just this wonderful, wonderful human being.
Speaker: And she's always on Facebook checking her social media feed. And one day somebody wants to talk to her and sort of hits her up. And she never says yes. She just always ignores it. But that one day she didn't. And it turned into a $40 ,000 loss in a very short amount of time to someone who she believed she was real and that was in love with her and he was coming and they were going to
Speaker: have a home together. She was looking for real estate for him and his children to come and live once he was done with this mission he was on in, I don't know, Afghanistan or wherever. And it was a tragic loss for her emotionally. She lost everything she had, was embarrassed to tell anybody. She called the police and never called her back. She called the FBI and they said, we'll get back to you. That was on January 6th.
Speaker: there was nobody calling her back on January 6th. So she just let that part of it go. But what she says is that the pain, the loss didn't stop with the last gift card she bought and shared the numbers on the back with. Because this past summer, she is in her home, her AC dies, she doesn't have money to fix it. She uses a portable air conditioning unit. It explodes. It burns her house down. And it takes
Speaker: the six hospice dogs that she was caring for. They died too. She was saved, but she lost everything. And it continues, continues even to today. And she's such a resilient woman. And she knows that by telling her story, she's going to have impact. And she does. And so we're working with her to get her story out in front of as many people as we can to help them understand, look, this is woman who is she's an executive secretary, she's smart,
Speaker: She leads ministry. I mean, it happened to her and it can happen to anybody. Wow. That's an incredible story and what resiliency and what courage to share that. And it's so important. And today I wanted to focus on that topic of shame. And I wish we could just tell everyone it's okay, you should be safe, but it's not so easy, unfortunately. We know that the FBI got over,
Speaker: 800 ,000 complaints about online scams in 2021 and we have an estimate of almost 7 billion dollars also by the FBI report lost to online scams by Americans in 2021. But those numbers represent the people actually reported and we also know that there are different numbers in different places. What do we know about the unreported? We know that because
Speaker: largely because of the shame the victim feels because we blame the victims, you know, they should have known something better. They should have done something different that there's the shame that they don't even want to tell anybody, let alone report it. And then if they do want to report it, where do you go? I mean, we don't say if you're a victim of a scam, call the police. Because for so long, people call the police and the police were like, well, you know, you gave them your money or no, that's a civil matter.
Speaker: And there are a lot of police on the beat out there that don't think that way, but way too many do. And people just kind of started giving up. And so what did they do? They would find that they could report it to the FTC or to the FBI or even to AARP. We have a fraud watch network helpline where we actually get to talk to a human on the helpline at AARP. But the others, it's simply reporting. And it's not for your own benefit. It's so that
Speaker: the people that are going after bad actors can tie cases together and try to make sense of what's going on. And if you report, that's great, but it isn't a value to you individually. So we know that the FTC saw $6 billion in losses in the same year that the FBI saw $7 billion just in cybercrime. And we have Javelin Strategy and Research. They do an identity fraud study.
Speaker: And their totals were in the neighborhood of $56 billion. So we don't know how big it is, but we know it's a heck of a lot bigger than what's being reported. Absolutely. And you mentioned others saying either police and definitely encourage people to report of absolutely and hopefully some of that money can be recovered.
Speaker: You said that people criticize other people when they fall victim to scams or are not empathetic. And I think even people start by criticizing themselves. How could I be so stupid? I can't believe this happened to me. I think the first line is like their own emotional or perception of themselves because of the impact of the external. So why are people hesitant to report, you think? And also what's the media's role in this?
Speaker: I think that we are so used to using sort of common vernacular about scams in our country. We don't, we did some research on this and it turns out, yeah, we say people that can't believe she got duped, she fell for it. You know, we see headlines, woman scammed of $35 ,000. And when fraud is an article in a media piece, the focus tends to be at least in the title of the article that someone was duped or swindled or scammed and you're like,
Speaker: okay, that was the victim, right? Where's the criminal and the crime? And we're not focusing on it that way. And so the article may go on to say, what happened to the victim? And then they'll interview a fraud expert or FBI or somebody, and then they'll do tips on how to protect yourself. Well, that's also fun and good. But what if the, first of all, that the title didn't say woman scammed of 35 ,000, maybe
Speaker: criminal stole woman's life savings. I still think people would want to read that article. And maybe instead of talking to the fraud expert and hearing what you should and shouldn't do, why don't you go to the platform owner where the person was victimized and find out what they're doing about it. Call the local police and say, hey, when this was reported, what did you guys do? Try to agitate those elements of what allows the crime to happen.
Speaker: to start stepping up and having to talk about what they can do if they're not doing enough. Yeah. And I think that person that was swindled or that it happened to them is just one of many. And I think if we take a broader perspective, if the media takes a broader perspective, okay, that happened to this person, but the same crime, the same scam happened to so many people. So let's take a step back and take a broader look and
Speaker: do a better job of investigating to find the criminals, to find, I think we just don't know enough about the criminals to name them like we do in physical crime, right? We have assumptions, right? And those assumptions hold us back from investigating. If you lost money to the grandparent scam and you call the police, more than likely they're going to say, well, maybe they'll file a report, but they're not going to investigate because they're going to say, well,
Speaker: those are things that are happened from India or somewhere outside of the country and we can't get to them. So case closed. Well, you don't know until you start investigating. And all of those bad actors around and in other countries have people in the United States working for them, right? Money mules, money launderers, people picking up the FedEx package that somebody sends the $10 ,000 in. And if you start going after the networks in the United States and making it harder,
Speaker: for the transnational criminal enterprises that put them there, then maybe they're going to stop doing some of this. Right. And then really talking about those elements, the mules, the delivery people's crime ring. There's a well -defined structure and hierarchy there. And yes, there are operations overseas, but there are definitely ties and liaisons here. And if we catch more of them, we talk more about them, we normalize
Speaker: the existence of the scams to the victims and not make them feel like they're the only ones. Exactly. And you mentioned the things that we need to do about it. And I look at the FBI and there are some good people who want to put these cases together. But like you said, they're looking at the single case like maybe the reporter is. And they need to broaden that scope and say, well, let's see if that same M .O. is happening around the country. The San Diego County did their first successful
Speaker: a RICO case and went after the grandparent scam. Did they get the guys in India or wherever? I don't know that they did, but they got some people here and six out of eight of them are already in prison serving lengthy prison sentences because the judge was like, you're
Speaker: horrible people for doing this and you deserve punishment. So there's hope and in the future, we might talk to the FBI on this podcast and hear a little more from them. But another element of going back to the emotions and the thoughts and the fear of reporting, another element is the actual demographic. So I read a report by Javelin Research that was done in collaboration with ARP.
Speaker: and discusses the targets of online scams by age groups. And people often think that the elderly are most likely to be the target and more susceptible to fall victim for a scam. That's not actually the case, right? That's not the case. Javelin showed it. Even the FTC data show it. Young people report falling victim to fraud and losing money far more than older people.
Speaker: But here's the difference. When an older person loses money from a scam, they lose a lot more, which stands to reason because older adults tend to have a lot more money than young people. And they experience this at a time when they're least likely to be able to recover financially. Remember, when people lose 70 ,000, 100 ,000, even 10 ,000 to a fraud, they're not getting that money back by and large. Imagine being 87 years old and losing everything that you had
Speaker: and not having any means of restitution or way to earn that money back. It's profound financially and emotionally and sadly, too many people die by suicide because of the impact. What can they do? What can someone do if they lost everything? Well, the first thing you have to do is file a police report. We have to get back to that thread that this is a financial crime and it must be reported.
Speaker: And if you call the police and they say, well, you gave them your money, you know, yeah, you were socially engineered by a sophisticated transnational criminal enterprise. That is true. But you were, you were deceived. You were made to believe something that wasn't true and persist. Force the issue, file the police report, because maybe someday down the road, there will be a means of restitution. We don't know. File that report. And then, you know, you can call the Fraud Watch Network helpline. You don't have to be over 50, which is typically our constituency.
Speaker: And you don't have to be a member. You can call 877 -908 -3360. And we have trained fraud specialists. Many of them are staff. Many of them are fraud fighter volunteers from around the country that are doing this to help people because they know the impact and they will help walk you through what happened, what you can do to protect yourself going forward. I think the average call is 22 minutes long. You know, a lot of them are even longer. So.
Speaker: you really get to talk to a person who empathizes and understands the emotional impact.
Speaker: Absolutely. You've been an advocate for changing how we speak the language that we actually use about both scammers and victims. Yeah. Tell me about that. By the way, you also did a TED Talk about this topic. I don't know if you know, but actually, I watched it online and it inspired me to reach out to you a few months ago when we first talked. And I wanted to ask if you can give some examples of changes that we can make, criminals,
Speaker: versus scammers, things like that. How can we leverage language in our industry, research, the media to shift focus from victims to criminals to reduce the shame? Yeah, I mean, there's some people will look at this and they'll say, you know, that's just semantics. Those are just words. And it's not true. Words have power. Words carry baggage. I was trying to explain to somebody that to say somebody was scammed puts
Speaker: the responsibility of that activity on the person, because that word, scammed, is loaded with, like, you got duped, right? But in the argument, well, we say people got robbed. Well, yeah, but there's no sense of personal responsibility really there. There was a criminal that came after you and robbed you. It's the same thing in financial crimes. So instead of saying scammed or duped or swindled or fell for it,
Speaker: try to find a way to talk about what the criminal did and that it was a crime and that the victim wasn't responsible. And instead of being like, oh my God, how did you get duped? Instead of saying that, just saying, oh wow, I'm so sorry this happened to you. This is a crime and we're going to figure out what to do about this and lead with empathy and not judgment. The paper that we did, it's called Blame and Shame in the context of financial fraud. There's some examples in there, but
Speaker: It's not that we mean it, as I said before, it's just that we're so used to using the language. And we can change that narrative. We can talk about some case studies that we did about how in the past in our country, we've been able to evolve how we talk about something so that we evolve how we think about it and how we deal with it.
Speaker: as a society. So for example, what did we do in the past that you think changed that we could do with scams as well? Well, I'm a kid of the 80s. I was in high school in the 1980s and four sisters of the four of us, my mom and dad at the dining room table. And I can remember, you know, we'd talk about the headlines. And if there's a story about someone being raped, the immediate thought from both my parents is, well, what was she wearing? Or what was she doing out alone at night?
Speaker: And I remember then, 15 years old, thinking, wait a minute, wait a minute, does that really matter? That got us into some really interesting conversations in the 80s. But there was a societal change that happened. And it began with books that were produced, I think it was in the early 90s, to really sort of help people understand that rape is a crime, that the victim is a victim, and not somebody who deserved something to happen to them. And that rape is not a part of
Speaker: masculinity. And over time, we've done a lot to change that and you have rape crisis centers and people don't, I mean, yeah, some people do, but by and large, we don't look at rape the same way anymore. And it's the same with suicide. And it was families of suicide victims who were like, we've got to do something about this and stop like looking at suicide is like, well, you know, they did it to themselves, whatever. And they rallied.
Speaker: and they were able to make change in our society. And we have a suicide hotline, which is now a three -digit number, I believe, finally. You see federal and state and local outreach and nonprofit outreach to help deal with this horrible situation that people find themselves in, to help them pull back from that and go on to live healthy and stable lives.
Speaker: Absolutely. And one important question that I wanted to ask you is what do you think can make the biggest difference in the lives of victims by government and private sector organizations? What needs to be done to make real change so people feel safe and not shamed when they fall for the scams? Well, yeah, we need fundamental change. I mentioned this before, you know, fraud is at a crisis level in this country.
Speaker: And we got, we have to put more attention on that. And part of that is changing the way we talk about it. So we changed the way we think about it. And I believe that if we're successful, that we'll have more people report because instead of withering and shame, they're going to realize that they are a victim of a crime. A transnational criminal enterprise did this to them. They've lost this money and they're going to get angry and they're going to want to report cause they're going to want to see something being done. I think that families.
Speaker: who deal with the issue with say an older parent who has fallen victim to a social engineering scam, those families will stay together instead of being torn apart. I'm sure you've seen this too. The blame, the shame, the intense anger that happens tears families apart. We can keep families together. If we're successful in this, the police will understand that this is a crime and not just a civil matter and they'll at least take the reports and prosecutors will understand
Speaker: horrible this situation is and how many people are being affected and they're going to want to take these cases to a jury where they can win them. And we'll have public policymakers finally understand, no, it's not just a $5 billion issue. No, it's not just a $6 billion issue. This is organized crime. People are losing their lives. People are losing everything and ending up on welfare programs and social support programs, and they would do something to change
Speaker: what is happening in this country. I believe all of that is possible when we begin with narrative change. Absolutely. And we'll hear from some prosecutors and people in different realms of government that will talk about what they're doing, but I definitely think there's more to be done there. So to wrap things up on a positive note, Kathy, what are you hopeful about? I'm hopeful that we may be at a moment of sea change.
Speaker: I've only been in this space really since 2019. I was an interim lead in 2018. I don't really count that because I don't know what the heck I was doing. But I'm seeing in my social media, I'm on LinkedIn a lot. And in the research that we did about blame and shame, I'm coming to understand that a lot more people are aware that fraud just doesn't happen to older adults. It can happen to anybody. It doesn't have to do with cognitive decline.
Speaker: It's that these are sophisticated criminal enterprises. This, at a grassroots level, is starting to be understood. And when I see fraud investigators for corporations and for -profit companies talking about it this way on LinkedIn, instead of just looking at the loss of the company that they're protecting, that gives me great hope. We can all come together in this sphere and make real change. Absolutely.
Speaker: Well, thank you so much for coming to the podcast and sharing your thoughts. And I think it all starts with really changing the way we speak, encouraging people to share. And it can happen to anyone. It can happen to me, it can happen to you. And there's no shame in this. It's protecting ourselves, protecting each other. And I think one key word that you said, and I want to reiterate, is empathy. It's all about empathy.
Speaker: with empathy, the people that this is happening to in your circles, you love them. They love you. Treat them with the empathy and the respect that the relationship deserves. Thank you so much, Kathy.
Speaker: In the next episode of Scam Rangers, we will talk to Aaron West, who is a prosecutor at Santa Clara County, California. We will talk about a new class of relationship investment scams called pig butchering and how it relates to crypto and blockchain analytics tools that can help us trace the money.
