[00:00:00] Speaker A: Hello and welcome to behind the Scams the podcast where we pull back the curtain on the dark world of fraud to keep you informed, aware and one step ahead of the scammers.
I'm Nick Henley, founder of Stamp Out Scams. Since this is our first podcast, I just wanted to briefly tell you who we are. Stamp Out Scams is a non profit organization dedicated to fighting fraud, educating the public and protecting individuals from becoming victims of scams. We were founded on the belief that knowledge is the best defense against fraud and our mission is to empower people with the tools and resources they need to recognize and avoid scams before they happen.
I have 25 years experience as a special agent with the federal government investigating financial crimes. I am also a licensed California private investigator and a certified fraud specialist. So I know a few things about scams, cons and frauds. Joining me for this episode is someone I'm thrilled to introduce. It is none other than my beautiful wife. Her name is Sue. Like me, sue is deeply committed to stopping scams and helping others. I am so happy she is joining me on this scam prevention journey. Her opinions and feedback are crucial to achieving the goals of our nonprofit. Welcome to behind the Scam, Sue. It's great to have you here and helping out with our very first podcast episode.
[00:01:34] Speaker B: Thank you so much Nick for having me on our very first podcast. I am so, so excited and I really am looking forward to doing more of these and helping people from being scammed and victimized. One thing I do have to say up front is that I will try and avoid calling you sweetheart or honey during our podcasts.
[00:01:55] Speaker A: Thanks for that honey. Anyways, now that we have got business out of the way, time to move on to today's topic which is the history and evolution of fraud. As the old saying goes, those who cannot remember the past are condemned to repeat it. Since we are a non profit scam prevention organization and this is our first podcast, revisiting the background and history of scams and frauds seemed like a logical place to start. With scams being so prevalent nowadays, I often wonder how did we get to where we are today in the dangerous arena of frauds, cons and scammers? It just seems as if scams are everywhere in today's fast paced world. Surely people in the past didn't treat each other like they do today.
Scamming each other out of money and ruining people's lives with such regularity and little to no remorse certainly has to be a relatively recent phenomenon.
Well, of course it is not. Fraud has Been part of human history for centuries, Constantly adapting to changes in technology, society, and even human behavior. Today, we're uncovering how it started, how it's evolved, and the lessons history teaches us about staying protected. So let's get started with our looking into the history of scams and cons. Here's something that'll blow your mind. The first documented fraud case wasn't some digital scam or credit card theft, but two Greek merchants trying to sink their own ship for insurance money over 2,300 years ago.
[00:03:37] Speaker B: That's fascinating. How much has fraud really changed since those ancient times?
[00:03:41] Speaker A: Well, the methods have evolved, but the basic principle remains surprisingly similar. Those Greek merchants, Hegistratos and Xenosthenes, Took out what we'd now call an insurance policy on their ship and cargo, planning to sink it and pocket the money.
[00:03:58] Speaker B: So they were running an ancient version of insurance fraud. So just how did that work out for them?
[00:04:04] Speaker A: Not well at all. They got caught in the act, and Hestratus actually died trying to escape. But you know what's really interesting? That same basic scheme is still being used today, just with modern twists.
[00:04:22] Speaker B: Hmm. It seems like fraudsters keep recycling the same old tricks with new technology. What do you think?
[00:04:28] Speaker A: Exactly like, take Victor Lustig, who managed to sell the eiffel Tower in 1925. He noticed a newspaper article about maintenance issues and convinced a businessman he was a government official authorized to sell it for scrap. He got away with 70,000 francs. So not a bad little scam.
[00:04:47] Speaker B: That's incredible. How did he pull that off?
[00:04:50] Speaker A: Well, he made it seem completely legitimate by exploiting people's trust in authority. And here's the wild part. He was so successful that he actually tried to sell it again, but got caught the second time around, thank goodness. By the early 90s, fraud took on new dimensions When e commerce platforms became a thing.
Fraudsters took advantage of the weaknesses of online credit card use.
At the time, credit card verification technology was still in its infancy. So they managed to steal the credit card information of celebrities to purchase expensive items. This was only the beginning of a tactic that would continue to wreak havoc even today.
As more digital transaction channels for credit cards became available, identity theft became rampant. Fraudsters targeted businesses with large volumes of credit card transactions. For example, one of the biggest scams in fraud history took place from 1995 to 2000, as casinos were hit by fraud by scammers, which were known as the Roselli brothers.
[00:06:01] Speaker B: Wow, that's real interesting. So just what was the scam? The Roselli brothers did The Roselli brothers.
[00:06:06] Speaker A: Targeted people who had good credit scores and many bank accounts. Using the credit history information, they took out loans from casinos. And because they spent large sums of money on gambling while still maintaining a healthy cash balance on the cards, they received more credit from the casinos. The Roselli brothers were able to steal approximately US$40 million from casinos.
[00:06:33] Speaker B: Wow, that is totally insane. I had no idea this type of stuff was going on back then. I really thought the social media world is what started it all. You know, with romance scams, phishing scams, catfishing scams, QR code scams, and a ton of others. It's hard to imagine it ever being worse. I know I should have known more about the world of scamming and its history, but I just didn't. Maybe that's why so many people like you and I have been scammed.
[00:07:02] Speaker A: Well, believe it or not, college age students are often targeted the most by scammers because they are financially inexperienced, highly active online, and sometimes in urgent need of money or job opportunities. But older adults, just like you, sue, typically lose the most money per scam, while younger adults fall for scams more frequently. Go ahead and include me in that older demographic too.
[00:07:30] Speaker B: So, Nick, I wanted to ask you about cryptocurrency fraud. Since crypto is fairly new and always in the news, is it being used in a lot of scams?
[00:07:38] Speaker A: Good question, Sue. You're really good at this podcasting thing. Yes, cryptocurrency is a big time problem. Since 2017, cryptocurrency exchanges have provided a platform for digital financial transactions. This too has created an opportunity for fraud. Cryptocurrency fraud is now a significant cause for concern for regulators. Crypto based transactions for digital assets such as Bitcoin and non fungible tokens NFTs have also attracted fraudsters as they use their tactics to fish for their victims personal information to take over their crypto accounts and wallets to steal their funds and assets. Cryptocurrency has become a major tool for money laundering, offering anonymity, speed and borderless transactions.
While crypto itself isn't inherently illegal, criminals use it to hide the origins of illicit funds, evade law enforcement and move large sums undetected.
[00:08:43] Speaker B: Wow Nick, this is depressing. Seems like scams, frauds and cons have been around forever and aren't going anywhere.
[00:08:49] Speaker A: You're right, sue, it's definitely a sobering thought. But while scams, frauds and cons have been around forever, so have people fighting back against them. Knowledge is our greatest defense. And the more we understand the history and tactics of scammers. The better equipped we are to protect ourselves and others. So let's not be discouraged. Let's be informed, vigilant and proactive. Together, we can stamp out scams one step at a time. So let's talk more specifically about some of the common cryptocurrency scams that are out there. One very prevalent type is the investment scam. Fraudsters often create fake cryptocurrency investment platforms or opportunities promising incredibly high returns with little to no risk. These platforms might look very professional and sophisticated, making it hard to distinguish them from legitimate platforms. They might even use fake celebrity endorsements or testimonials to build trust and credibility. Once victims invest their money, they often find they can't access it, or the platform simply disappears.
[00:10:01] Speaker B: So it's like a Ponzi scheme, but with cryptocurrency.
[00:10:03] Speaker A: Exactly. Another common scam is the giveaway scam. Scammers often impersonate well known figures in the crypto space, like Elon Musk or Vitalik Buterin. On social media platforms. They promise to double or triple any cryptocurrency sent to a specific address.
It plays on people's greed and the desire for quick riches. Unfortunately, many people fall victim.
[00:10:33] Speaker B: That's just awful. Are there any other scams people should be aware of?
[00:10:37] Speaker A: Yes. Phishing scams are also quite common in the cryptocurrency world. Scammers often send emails or messages that appear to be from legitimate cryptocurrency exchanges or wallet providers. These messages might claim there's a problem with your account or that you need to update your information.
They contain links to fake websites that look almost identical to the real ones. When you enter your login credentials or other sensitive information on these fake sites, the scammers steal it and gain access to your accounts.
[00:11:14] Speaker B: So what can people do to protect themselves from these types of scams?
[00:11:18] Speaker A: A few key things. First, be very skeptical of any investment opportunity that promises unusually high returns. If it sounds too good to be true, it probably is.
Second, do your research. Verify the legitimacy of any cryptocurrency platform or project before investing any money. Check for reviews and feedback from other users. Third, never share your private keys or seed phrases with anyone. This information gives complete control over your cryptocurrency holdings. If someone asks for it, it's a scam. And finally, be cautious of unsolicited messages or emails, especially those claiming to be from cryptocurrency exchanges or wallet providers. Always double check the sender's address and the website URL before clicking any links.
[00:12:13] Speaker B: It sounds like vigilance and caution are key.
[00:12:15] Speaker A: Absolutely. And remember, if you do fall victim to a cryptocurrency scam, report it to the appropriate authorities immediately. You can file a complaint with the FTC or the FBI's Internet Crime Complaint Center. While recovering your funds might be difficult, reporting the scam can help prevent others from becoming victims. So beyond cryptocurrency, what are some general tips people can follow to protect themselves from scams?
[00:12:44] Speaker B: That's a great question, Nick. One of the most important things is to be aware of the different types of scams out there. We've talked about a few already, but there are many others, like phishing scams, romance scams, tech support scams, and government imposter scams, just to name a few. Staying informed about the latest scams can help you recognize them and avoid falling victim.
[00:13:09] Speaker A: Absolutely. And a key part of that is being skeptical. Don't trust everything you see or hear, especially online. If something seems too good to be true, it probably is. Verify information from multiple sources before acting.
[00:13:25] Speaker B: On it, and be cautious of unsolicited contact. Don't click on links or open attachments in emails or text messages from unknown senders. And never give out personal information like your Social Security number, bank account details or passwords over the phone or online unless you initiated the contact and are sure you're dealing with a legitimate organization.
[00:13:52] Speaker A: Another important tip is to protect your online accounts with strong, unique passwords. Use a password manager if you have trouble remembering them all, and enable two factor authentication whenever possible. This adds an extra layer of security to your accounts, making it much harder for scammers to access them even if they have your password.
[00:14:16] Speaker B: And don't forget about your physical mail. Shred documents containing personal or financial information before throwing them away. And be wary of unsolicited offers that come through the mail. Oh, and one thing I would like to take a second to talk about is our website
[email protected] I am so proud of this website. It's not just another prototypical website that are all over the Internet. Our site is full of progressive and modern tools designed to help everyone avoid scams. And of course it was designed and maintained by by my wonderful husband Nick. So Nick, take it from here and go ahead and brag about our website.
Before I leave. I want to thank everyone for listening. We are here to help. If you have any questions, please email us@info stampoutscams.org Bye for now.
[00:15:19] Speaker A: Well, thank you so much. That's quite a compliment. I think I am going to have you do every podcast. I hope you don't mind, but you are good at this. Anyways, you did mention our website. The Stamp Out Scams website is one of the most advanced scam prevention platforms available today. We've built a scam education library filled with expert resources to help you recognize and avoid fraud. Our Scam News feed keeps you updated on the latest scam trends in real time so you're always one step ahead. Plus, we've developed an AI powered database trained on both old and new scam data, allowing us to detect emerging fraud tactics and provide smarter, faster scam prevention tools. It's not just a website, it's your best defense against scammers. Oh, and before we go, I want to mention the AI Chatbot on every page of our website. He is located at the bottom of each page in the right hand corner. His name is Sam and he connects directly to our AI database and can answer just about any question relative to scams. If he doesn't know it, we feed him the relevant data and he is trained on it within minutes. So please visit our site and test out our Ask Sam Chatbot. It's pretty, pretty, pretty cool to our listeners. Thanks for joining us on this episode of behind the Scams. Stay tuned for more podcast episodes from Stamp Out Scams. We will be using different hosts on our podcasts, including myself, Nick Henley, and my wife Sue. Additionally, we will be using our student and law enforcement volunteers to assist in our upcoming podcasts. Finally, if you think you've been scammed, report it immediately. Contact the appropriate authorities like the ftc, the FBI, or your local police department. You can also report the scam to the company or platform where it occurred. Like your bank, credit card company, or social media platform, reporting scams can help prevent others from becoming victims and can help law enforcement track down the perpetrators. Until then, stay safe, stay alert and stay scam free.
