International fraud awareness week is observed 11-17 November 2018. Only the week prior I saw first hand a person who has fallen victim to an elaborate international scheme set up by dishonest individuals. An elderly man popped into our office asking for advice on investing a large inheritance he was going to receive.
The AML/CFT rules now apply to accountants. So I asked him for some further details regarding the inheritance as well as some personal identification. Apparently, the inheritance was coming from somebody the victim has never known but “shared the same last name.” The inheritance (which was in the millions) was brought to his attention by a letter received unexpectedly in the post from overseas. On top of that, the funds were frozen and required a court order to unfreeze them to make them available for distribution to him as the beneficiary of the estate. In order to do this he was required to pay money by wire transfer to the lawyer who had contacted him to cover the legal costs to do this. Unfortunately, the man happily obliged and parted with a significant sum of money. This was done without seeking any advice from any professional in New Zealand such as a lawyer, accountant or financial planner.
I advised him that he had probably been a victim of a inheritance scam. Unfortunately, I am under the impression he didn’t believe me. He didn’t come back with the details I needed so that I could act for him. When he left the office he said was going to contact the “lawyers” to see if he could provide that information. I did, however, offer some parting advice. This was to not pay any further money if requested unless he consulted a professional.
So after seeing this first hand I thought I would point out some warning signs of an inheritance scam. Remember to stay safe out there!
- You are contacted out of the blue by a scammer posing as a lawyer or banker and offering you a large inheritance from a distant relative or wealthy individual.
- There may be requests to pose as next of kin to an unclaimed inheritance.
- The offer comes on official looking letterhead, however, contains spelling and grammatical mistakes.
- The size of the inheritance is large.
- You are provided with fake bank statements, birth certificates and other documents if you question the legitimacy.
- You are asked to provide your bank account details, copies of identity documents as verification.
- You are asked to pay a series of fees, charges or taxes to help release or transfer the money.
- The fees may initially be for small amounts, however, you are then asked for further larger payments.
- The scammer offers to meet you in person to verify the proposal, but this rarely eventuates.
How to protect yourself:
- Never send money or give credit card, account details, copies of personal documents to anyone you don’t know or trust.
- Avoid any arrangement with a stranger that asks for up front payment by money order, wire transfer, pre-loaded card or bitcoin. It is very difficult to recover money this way.
- Seek advise immediately from an independent professional such as a lawyer, accountant or financial planner if in doubt.
- Do an internet search using the names, contact details or exact wording of the letter/email to check for any references to a scam.
- If you think it’s a scam, don’t respond.
- Remember if it sounds too good to be true it probably is.
What to do if you have been scammed:
- Contact your bank immediately and see whether they can cancel or reverse the transaction.
- Report it to the police.