Watch Out! How to Avoid Financial Scams with Dan B!

Hey, credit heroes. Today we're talking with finance expert Dan Benvenisti. He's here to talk about a terrible financial scam that caused a whole lot of damage to his family. So we're going to talk about that. We're going to talk about all different kinds of financial scams, and we're going to learn the best ways to protect ourselves from financial scams. So you better stick around.

My name is Daniel Rosen, and welcome to Credit Repair Business Secrets.

Okay, before I dive in, this is the number one show about credit repair. The number one show about running a credit repair business. We cover every aspect of credit repair. We have a new show every single week, so be sure to click to subscribe and turn on notifications so you don't miss any of the secrets that we share each week here on the Credit Repair Business Secrets podcast. And if you want me to hold you by the hand and as you launch your very own credit repair business, go to creditherochallenge.com okay, let's get into this. Dan Benvenisti is my good friend of 25 years. He created our popular course on how to become a personal finance coach, and he's here today to talk about financial scams and how they affected his family and how we can protect ourselves and our clients. Please welcome to the podcast Dan Benvenisti. Hey, Dan. Thanks for being here.

Hi, Daniel. It's great to be here, too. Thank you so much for inviting me to your podcast.

Oh, I had to have you on when you told me what happened. So tell everybody. What is it that happened with your family?

Okay, so, you know, scams are affecting. They're so prolific that they affect so many of us. And recently they affected myself personally. So I have an aunt, an elderly aunt, well into her 80s, and she lost her entire life savings due to a scam. And we didn't find out till all the money was gone.

She lost her entire life savings completely.

She lost everything.

That's horrifying.

It was a terrible thing that's happened. It didn't just happen, you know, to my family. It happens to many families. You know, their scams are just so common now that they're targeting, you know, the vulnerable. Essentially, every member in our society is being targeted right now for different types of scams. And, you know, sooner or later, a lot of us get. Get impacted by it. And in my personal case, my aunt, who is living off of her retirement savings, lost everything. And, you know, there's different types of scams. This particular scam worked on emotions and romance and got her thinking that she was romantically connected to a particular person. This person was in dire need and needed help. So of course, like most people, let's.

Go really, really slowly through this. First of all, how old is she?

My aunt's about 83 years old.

Is she online? Did this happen online?

It happened through email. So a lot of these scams, they, they, they connect through email. In, in this particular case, they sent her an email making her think that she was, she was talking to a celebrity or someone that she highly respected. Respected. I don't actually recall the name, but they made that personal connection. And when they make that personal connection, that emotional connection, you know, that, that's when they engage the victim. And when you gauge the victim, the victim feels personally, you know, responsible and wants to help out. And when they got that hook, they create the drama, they create the need for, for money. And it just go, it just rolls from there. It just feeds onto itself.

So she thought it was someone famous that was reaching out to her?

Correct. She thought it was someone famous, a famous author that she somehow connected to. And that was in some personal drama. You know, that's how it works. There has to be drama in order for the scam to work. And this particular person needed funds to get out of a situation, but was going to get funds later. So all this person needed was a short term loan from. And of course, you know, like we all do, we all want to help each other, we all want to help. So you know, my, my aunt felt that she was helping this particular person and because it was an embarrassing situation, she didn't want to tell anyone. She wanted to tell anything. That's another very key component of a scam. If they try, if they try to create an environment where you feel you can't tell other people about it.

So how was she to loan this person? How was the money to exchange hands?

Oh, so scams work in different ways. Sometimes you wire transfer, in this case, there was a wire transfer that was involved. But there was also the common scam of gift cards. So how this particular scam works, and it's very common, is they convince people that they need funding. And the way to do that is to purchase gift cards and then give those gift card numbers to the scammer. And then the scammer will empty those gift cards, you know, buy products and then sell it. And that's how they make their money. So it was a combination of wire transfer and when all that was consumed up using credit cards, maxing out credit cards to purchase gift cards.

And this went on for a very, very long time until all her savings was. Was gone.

It likely went on for about one to two years. And that's exactly how it stopped is essentially all the. All the credit cards were maxed out. You know, you couldn't pay your own bills because you didn't have anything. My aunt felt that she was moments away from being refunded, but haven't been refunded yet. And the scammer will constantly come up with more and more drama and excuses of why she needs to give more money and why they're only days or weeks away from getting all paid back whole.

Do you remember what any of the drama or excuses were in this particular case?

This supposed famous person was going through a personal divorce, didn't have access to his money. You know, this is always a complicated story. So he needed the money to float a particular, you know, expense or health issue, whatever. And then when this, when it would settle, he would get access to all this money and then repay back with interest, and all would be good. The issue would be closed and my aunt would feel satisfied that she helped out this famous person. Of course, none of that is real. You know, it's all playing on people's emotions. It knows what people connect to, which is helping others. And it knows kind of that they. That they react differently when there's a dramatic situation and when they can't tell the story to others. And that's what all these scams have in common. The drama, the rushness of it, the need to do something quickly, and then the ability to be paid back in whole or more.

How much did they take?

Oh, it was about $120,000. It was quite a bit of money.

Oh, my God, that is so horrible. And what was this like for her? What was it at the end? What was this like for your family? What did you go through?

Well, I don't think she's unique in this. At first you don't believe it's real. You believe that you haven't been scammed, and this particular person just is having trouble. So there's that whole time period where you have to kind of accept. Accept that you were scammed. And then when you realize you're scammed, there's an incredible embarrassment that occurs. So you don't want to tell people about it. You don't want to. You feel embarrassed that you got kind of snookered into this deal. And then after that, there's the guilt and the impact and the consequence to all this because you still have to pay your bills and you lost all your savings. So there's a lot of repercussions that occur. And one thing I want to emphasize is this is not a one, two person situation. This happens to millions of people across our country. And these scam artists are just professionals. You know, they know what buttons to push and what, you know, what keywords to use to make the, you know, make these deals happen.

Oh, and with this happening for a year and a half or more, she had a. It was a relationship, basically. She built a relationship with. With him.

Yeah, absolutely. Yeah. And that. It's. The relationship is how they get that emotional connection. And, you know, most of the conversation is nothing to do with the financial need. And then they build that relationship. They create that bond, and then when they have that bond, they create the drama, and that's when they create, you know, the need for money.

Wow. My mother is 94, and she spends her whole day. She lives alone. She spends her whole day on her computer. And she's always calling me, saying AOL is threatening to cancel her service and they need a new credit card. And every single time, and the same thing happens again and again. Every single time. I have to tell her AOL is free. That email is not from aol, they are free. So don't pay attention to that. But she opens everything, and she opens attachments to everything, and she believes every email that she gets is. And they look really, really legitimate, even when they aren't. I wonder if this guy got your aunt's information in one of these ways.

Yeah, that's a phishing expedition. I mean, they do that for several reasons. That could be identity theft in which they tried to copy the identity and then create credit cards, max out the credit cards. Often the victim doesn't even know it's happened until they see their credit report has been destroyed. Right. And that's where credit repair is so valuable. So that's one type, one of the many, many, many types of scam.

I'll tell you one other thing that happened with my mother. One time she was on the phone with hours and hours or four hours and hours with someone she thought was Apple Support, but it wasn't. It was someone in another country. And they spent. They logged into her computer, she let them in, and they spent hours and hours rooting around in her computer. It was very scary. I guess they were looking for information. I don't know what they found. Luckily, there was nothing bad happened, but that was really, really frightening.

Did they get any money from Your mother?

No, no, they didn't, as far as I know.

Wow. As far as you know. Because if they were in there, I mean, and your mother was believing them, it sounds like it was at risk. At least I could tell you. A scam that happened to my mother, which was really interesting. One of the scams that occurs is. Is, you know, the get rich quick scams. So my mother, who was not the most financially savvy person, was convinced that she had these stock advisors that were advising her to jump onto the marijuana bandwagon. You know, marijuana became legal. There was all these startup companies that were jumping into it, and if she invests into it, she'll make a ton of money. And in reality, what this was is these are called pump and dumps, where you have all these characters that will promote these failing companies that either exist or don't exist, or whether it's on paper or their nothingness. And they promote them like crazy to drive up the stock, they sell the stock and then it dumps. That's the pump and dump scheme. And the incentive on the victim's end is they think they're getting rich and they see the stock going up, but what they don't realize is that it will drop in a second and they'll lose everything. That's a very, very common scam. And what made this one so frustrating is despite the fact that I was explaining to her at the time that this was a pump and dump and that it was a complete scam, she was too allured by the prospects of getting rich quickly that she wouldn't believe anything I said. And that is such a common story. You know, there's that old saying, it's easier to scam somebody than it is to convince somebody that they're being scammed.

And did they take her for a.

Lot of money in that case, she lost about, I think, $8,000. Yeah, correct. Oh, wow. Yeah. I was successful to save other amounts of money, but, yeah, absolutely, because you don't win in these pump unless your timing is just perfect, which is essentially luck. It's nothing to do with your skill. You're going to lose money in a pump and dump because that's how they're designed. And right now, there's a lot of that in the crypto stock world. There's all these get rich quick investors schemes in which you invest in the crypto world. And those two are pump and dumps, where they're heavily promoted. You get all these characters that invest their money into it, drives the stock price up and then what happens at a certain point is the company folds, it disappears, the stock price goes to zero. Somebody made a ton of money and it's not you.

Terrible. Terrible. I know you and I have a friend in common, was recently scammed.

Oh yeah, that was a bad one.

I don't think we should mention his name, but let's call him David. Can you describe what happened to David?

So that was a romance scam. So this is a person who's in his 70s, right, but is still actively dating. And he's a colorful personality and he likes to go to all these dating sites and date people. And what happens is there's all these fake accounts that, that, that attack characters like this and pretend to be very young, beautiful women. And they too create this long term, you know, connection with their victims. And they get their, their victims to believe that they're, you know, moments away from this character, you know, flying over and having this great relationship with them. But in reality, it's a total scam. And just like the scam that I talked about with my aunt, they create a drama in which they're in trouble and all this issues are going to occur and they ask for help. And because they're, you know, emotionally involved, potentially romantically, you know, hopeful, and all these characters, they're vulnerable to it. And so they, they transfer money over and of course there's no person on the other end.

And I remember you kept warning him. Yeah, you kept telling him this is a scam. Have you actually talked face to face with this person and somehow it went on without him ever having a face to face conversation? Am I right?

It's always that way. Or it's often that way, I should say, you know, there's always an excuse about why it can't be, you know, a verbal conversation or video conference. And the reason is because the person's is, you know, probably some guy in Nigeria or whatever or some other place that, that's, that's scamming these people. It's, it's, it's alluring them and they, and they essentially get, you know, like a mini form of brainwash. So even when you try to convince them that this is a scam, this is not real, and the reasons why it's not real, they'll question it, they'll say, no, it's not true, you know, because they've already invested their time, they invested their emotion into it. It's like convincing you, you know, you know, something that you really love and cherish isn't real. And that's a very hard thing to take. And sure, at a certain point, you know, he did recognize it was a scam, but as you know, he also, you know, almost became victim to the second scam. Was almost identical. Because certain. And I want to make this point very clear. It's not like some people are more, you know, much more vulnerable than others, which is. Which is true. It's just that there are so many scams out there that eventually all of us could become victim to it. You know, none of us are completely immune from being emotionally tricked or going in over our feet, whatever, going over our neck on something that we don't fully understand. You know, there's always a little bit of trust in all of our transactions. And scammers take advantage of that.

Oh, absolutely. And in his case, I'm sure they were texting round the clock. They had this whole love story happening. He ended up spending. It was tens of thousands of dollars, wasn't it?

It must have been. It must have been. It was the most. If you were to describe the story to anyone, everyone would say it doesn't make any sense. But what happens is they give you. It starts off innocent. It gets a little bit deeper and deeper and deeper in the end, and they just get to more and more fanciful concepts that just sound completely absurd. I think you might remember this. They had him believing that he would transfer money and that she would ship gold to him. But gold can't be shipped in the mail, so it has to take a longer time to ship by boat. So it takes a while. So it was just absurdity that anyone who listened to the story thinks it's crazy, but everything sounds crazy when you just hear the end. But when you're prepped for, like six months of hearing little bits, little bits, little bits, and then it makes sense. Oh, yeah.

Plus, he showed you pictures. Yeah, he was talking to.

Yeah. If you. If you jump to the end, if you jump to the conclusion, none of that makes sense. But if you follow the whole story. Oh, yeah, you kind of see it and, you know, I guess the question that's out there is, you know, how do you protect yourself and your loved ones with that? And what needs to happen is you got to follow, you know, the basic rules. Is this too good to be true? You know, you should do research. There's lists on common scams. Does this follow some of those characteristics? Is there drama involved? Are you being pressed for time? Do you know the background of this person? Are there references? Can you talk to other people that can Back it up. Are they independent? It's good to have a critical mind. Not overly critical, because then you'll go crazy on the other end of the spectrum. But you need to be able to be. You know that classic term trust but verify.

Absolutely. Now, how common are these kinds of scams?

They are everywhere. Anyone who has a cell phone knows that they are getting multiple calls a day from various scam artists. And these are people that are just calling millions and millions of people a day, hoping for that one or two hits. And there are scams across the board. There's the identity theft scam scam that you were describing with your mother. There's the romance scam that we talked about with those, you know, our friend and my aunt, which. And then there's the get rich quick scams, and there's a dozen other types of scams that are out there, which is, you know, again, is it too good to be true? Is there, you know, are there references to this? Are there examples of it, you know, working successfully? Are they preventing you or discouraging you from telling your friends and family about it? You know, that's always a key thing.

Absolutely. And so besides draining your life savings, it leads to identity theft. It ruins your credit. I heard a story about someone who, he was doing credit repair, and this happened to his client. The client had a scammer remortgage their house. They weren't even aware of the remortgage. They took out a HELOC home equity loan against the client's house, and all the money was drained from the house.

Yeah. So that's identity theft. So, I mean, there's good and bad. Identity theft is the least of the two, because in identity theft, they're not taking your life savings. And you could essentially tell the mortgage company or the credit card, hey, this wasn't me. You guys didn't do your part. You know, and there's, as you know, there's a whole kind of bureaucratic system to be made whole in that situation. So while it is, you know, horrific and pain in the neck and in many ways could, like, prevent you from getting a loan or prevent you from renting a house, there's a lot of negative aspects of that. There are techniques that you could do through credit repair to repair that aspect. The other type of scams, in which they physically take your money and in many cases, it's willing. Right. In our friend's case, they willingly transferred it. In my aunt's case, they willingly transferred the money. So in that case, you're liable for that because you made this choice. It wasn't that your card numbers were stolen, you bought those, what do you call those things, those money cards, those gift cards, knowingly. So you are liable for it. So it's a very different, very bad situation.

Wow. Well, we should talk about some of the other ways people can protect themselves. I mean, I think most of all, if an offer or a person or a situation looks too good to be true, it probably is, right?

Absolutely. Another thing is don't do things in secret. It's okay to discuss when you got these big issues. Like I have this friend that desperately needs money, you know, and you want to talk to people about that, make sure it makes sense. If you're going to do, if you're going to loan somebody money, make sure that there's, you know, some kind of recourse about it, you know, and then hopefully a friend will say, have you met this person? Have you seen this person in real, you know, and that could often, you know, you want someone outside of your bubble to kind of, you know, double check your thoughts, talk to family members like that. And then the other thing is, do some googling in the case of the pump and dump stocks. You know, those are very well documented, you know, so you should kind of understand, you know, you know, when you're being exposed to that, you could, you could Google it and figure out, you know, this falls under that category. Now, I agree some of this is complicated. It's important not to get in over your head. Don't invest in things that you don't fully understand. Right. If you can't understand how the process is working, it's probably best you avoid it. You know, the stock market is considered a long term investment. So if you're trying to get short term gains out of it and you don't really understand how that works, you're likely not going to be successful.

Yeah, that's really good advice. And also, don't trust every email you receive. Some of them look very, very real. Yeah, I get all kinds of very official looking emails from banks that I don't bank with.

Yeah, absolutely. So that gets into, what do you call it, Spear phishing techniques where they mimic an organization that you trust, like a bank or AOL or whatever have you. And they say you got to log in and then you click on the link and it makes something look just like AOL or just like the bank. You type in your username and your password and bam, they had that information. And once they had that information, then they could access the actual bank. So emails are bad. I think telemarketing, phone activities is just as bad. There's probably less in person scamming than there was in the past, but occasionally that happens as well. Again, it's not just like the other people are vulnerable to this. You shouldn't walk away thinking, well, that's a crazy story. That would never happen to me. You know, I'm sure that all of us can be victim to some form of scam. And there are great stories, you know, about Ponzi schemes that allured, you know, professional money marketers to invest all their money into something that was completely complete. Vaporware didn't even exist.

The list goes on and on and on. What are some more tips that people can use to protect themselves?

Well, I mean, first of all, you should be aware of your credit score, right? So that kind of addresses the issue of identity theft. Theft. Because identity theft could occur when you com. When you're completely not aware of it. You could do nothing wrong and still get identity theft. They could take out credit cards in your name, and you just. You reap the consequences of that. So you should have visibility and kind of regular routine looking at your credit report. That's. That's one way. The second thing is, you know, when you're dealing with, like, relatives that are all elderly, like your mother or my aunt, all that stuff happens. Have honest conversations with them. Explain how, you know, you could be vulnerable to this. You were definitely being, you know, sought after and attacked routinely. But by scams, have those open conversations. That's something that I probably should have done better. Right. So you want to get ahead of it and you want to be able to explain, you know, what are the different types of scams, you know, so that when they are exposed to it, they say, oh, you know, I kind of remember this. So that's, you know, very important. And then the third thing, which is, you know, just kind of good is think about, you know, the deals that you're doing with yourself. And, you know, where. Where are my risks? You know, where are my weaknesses? You know, we all have kind of emotional connections with ideas, and the scammers know that, so they try to take advantage, you know, of that.

Yeah. Also, you should never give money or credit card details or online account details to anyone that you don't know and trust. You should check your bank account and credit card statements regularly for unusual activity. You should be doing credit monitoring to check your credit report to make sure there's not weird stuff on there that's not yours. That would be a sign of identity theft. You should report any unexplained transactions to your bank. You should make sure no one else knows your PIN number. Right. Those are all good things.

And here's actually a big advantage to credit cards. So when you purchase something on a credit card, there's insurance that goes along with it. So if you purchase something from a credit card and you never received the item, or the item was a total scam, or you know, 10 other numerous things, you can complain to the credit card company, say, hey, this was a scam, I never received it. And if that's true, you'll get your money completely back. That's very different than if you use your debit card, send them, or write them a check or something like that. Then you don't get that money back. So when you're dealing with things that are questionable, the credit card can provide a layer of security. Now, in the case that we talked about, my aunt, where she knowingly bought gift cards, well, you know, where's your argument? You don't have an argument there. You knew what you bought, you gave it to someone else. And that's actually the reason why the scammers know this. And that's the reason why the scammers don't ask for credit card numbers. They want the gift cards because gift cards cannot be refunded or returned. Essentially they're a one time transaction.

There are some really smart evil people, aren't there?

There are a lot of smart, evil people out there. Correct.

Well, if you're out there listening and you've got a credit repair business and you have clients with identity theft, these are things you want to talk with your clients about for sure to prevent this from happening again.

Absolutely. And if you're helping them with their personal finance and you want to be a personal finance coach, these are big issues for a lot of people. You know, when you're often you're trying to protect people's savings and protect people's, you know, credit score. Right. So when you're protecting people's savings, this is one of the biggest risk to their savings is essentially they would lose their whole savings because of one or two very bad decisions.

So crazy. Thanks for being here, Dan. I really, really appreciate you. This was really awesome. It was really informative and I really appreciate you coming by.

Oh, it was my pleasure, Daniel. I always love coming by here and discussing shop with you. Thank you so much for inviting me.

Sure. And those of you listening, if you want to learn more about Dan's course on how to become a personal finance coach, just go to creditrepaircloud.com training and we're also going to put a link to all the courses down in the description of this podcast and in YouTube. Again, thank you again for being here. And if you're finding value in this podcast, be sure to click below to subscribe. And if you have any questions, drop a comment or ask a question because I read each and every one of them and I will see you on next week's podcast. And in the meantime, be a Credit Hero and keep changing lives.

Hey everybody, it's Daniel again, and really quick. I'd like to invite you to join what I believe is the best thing we have ever created inside the Credit Repair cloud community. And it is a challenge that we call the Credit Hero Challenge. If you're just planning out your business or you're just getting it started and you dream of having a successful business of your own so you can quit your 9 to 5 and fire your boss and have financial freedom, or so you can add another revenue stream to your existence existing business. If that's your dream, you need to get into this challenge. We created this challenge to help you to create and launch your very own credit repair business to build a proper foundation for a really successful business. This challenge is going to help you to understand the strategy, the tactics, and all the things you need to be successful at Credit Repair. It really is the greatest thing we have ever built and it will change your life. So I recommend you do it right now. Stop everything, pause this audio, go online and go to creditherochallenge.com that's creditherochallenge.com and join the next challenge. And there's a challenge that's starting in just a few days. So go get started right now@creditherochallenge.com.