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Fend off financial fraud

How to protect yourself and your Rotary club from becoming victims

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Don Griffing realized something was wrong when he received a text from a fellow Rotarian asking: “Is this really you?”

The question was about an email that appeared to have been sent by Griffing asking for help, but the wording seemed off. As a retired software developer, Griffing immediately suspected he was being impersonated by a scammer trying to swindle money from his network and alerted his contacts not to respond to the request.

His suspicions were bolstered when he learned that another Rotary district leader had likely crossed paths with the same scammer requesting Amazon gift cards. “I’m a retired IT person; I’ve been down this path. I know what to do. But I still had that little bit of a pit in the stomach, an ‘OK, here we go again’ kind of thing,” says Griffing, a past governor of District 6270 who lives in Oshkosh, Wisconsin.

This wasn’t Griffing’s first or last brush with fraudsters.

In the early 2010s, someone claiming through Facebook to be his uncle said he was in Europe and needed Griffing to send money — something he quickly debunked by checking with his cousin. In retrospect, he says, it was an early version of the popular “grandparent scam,” in which someone posing as a distressed relative, often a grandchild, asks for money.

More recently, he received a questionable email sent to Rotary club and district leaders asking for project funding. After some digging around, he couldn’t confirm that the person who sent the email was even a Rotary member.

With the impersonator emailing his contacts, here he was again, an IT expert, having to send a warning to members throughout his district. He worried a little about causing annoyance by adding another fraud alert to the inboxes of people who receive so many emails each day. But he knew how important it was to protect his network from fraudsters and quickly brushed his hesitations aside.

Scammers’ tools – from text messages to AI

The number of scammers on the prowl is proliferating.

Americans lost a record $10 billion to fraud schemes in 2023, an increase of more than $1 billion compared with 2022, according to the Federal Trade Commission. The most money was lost through investment scams: a total of $4.6 billion that year. Impostor scams had the second-highest reported losses, totaling $2.7 billion in 2023.

But even these big numbers are an underestimate, experts say.

“We know that fraud and scams often go unreported because people may be ashamed or embarrassed, or not know where to report,” says Lisa Schifferle, senior policy analyst in the Office for Older Americans at the Consumer Financial Protection Bureau, a U.S. government agency. “This is really just the tip of the iceberg.”

Image credit: Mojo Wang

Criminals usually get away with the cash they’re able to take through fraudulent phone calls, emails, texts, and social media interactions, experts say.

“Fraud complaints continue to go up because the crime is so lucrative and so low risk for the criminals who perpetrate it,” says John Breyault, vice president of public policy, telecommunications, and fraud for the National Consumers League. “The vast majority of fraud goes unpunished. So unfortunately, when we talk to consumers, most of the time, we simply have to say, ‘Your money’s gone.’”

Moreover, it’s getting more difficult to spot fraud, as scammers use artificial intelligence to appear legitimate. People hawk tools through the dark web with names like FraudGPT, a deviant cousin to the popular AI tool ChatGPT, Breyault says.

Consumer advocates like him are watching carefully to see how criminals use AI to come up with well-worded messaging or deepfakes that impersonate someone’s voice or likeness in their schemes, he says. The technology also could help criminals develop targeted lists of potential victims, based on location, income, and other demographics, he adds.

“I can imagine punching [a query] into an AI that says, ‘I need a list of 100 women with net worths of more than $250,000, who recently lost their significant other and live alone … and their phone numbers.’ And an AI could spit that out for you,” Breyault says. “We’re dreading seeing the data starting to roll in as these tools become more accessible.”

Choosing targets

A common misconception is that scams primarily affect older people, but young people too report losses, especially to online shopping fraud and bogus offers of work-from-home jobs or help starting a business. Instead of earning a paycheck, you end up paying for useless training kits or certificates. Scammers also target people who are vulnerable by the nature of their work or circumstances: those recovering from natural disasters, for instance, or those involved in humanitarian service who regularly see appeals for aid.

How to report fraud

To report fraud in the U.S., visit the Federal Trade Commission’s website. In Canada, visit the Canadian Anti-Fraud Centre.

Another channel for reporting fraud in the U.S. is AARP’s Fraud Watch Network Helpline at 877-908-3360, where trained volunteers across the country also can help consumers — even as the fraud is in progress. The helpline fields 400 to 500 phone calls every day.

At the heart of Rotary’s mission is the goal of serving others and fostering goodwill throughout the world. That’s exactly what puts Rotarians at an elevated risk of fraud, members say.

“As Rotarians, we’re such trusting, giving, warm-hearted people. We want to help,” says Amelia Stansell, governor of District 7610 in northern and central Virginia. That makes Rotary members an easy target for people looking to profit from phony charity appeals, she adds.

Recently, members of the Rotary Club of Herndon-Reston, part of Stansell’s district, suspected they had been targeted by a scam. A person identifying himself as a Rotarian on Facebook bombarded people with messages requesting help.

But interactions with this person felt suspicious. And the misspelling of “Rotary” on his profile seemed like a red flag to people who took the time to closely inspect it.

When Stansell found out about the situation, she notified members to not only unfriend this person but to report the account to Facebook.

In another case, at the beginning of the Rotary year in July, Stansell received an email that a Rotary Foundation global grant was approved — a message that included instructions on how to wire funds for the project.

“It was not a real global grant number. It was totally not legit,” she says. But an inexperienced Rotarian giving the item a quick read could easily be tricked, Stansell adds. “It’s the beginning of the year, all of a sudden districts have money for grants. All this stuff comes in July, August, September. And you have new leaders who are eager to get things done, don’t have that experience, and may not have that Spidey sense,” she says.

Stansell’s Spidey sense is finely honed; she only agreed to an interview for this article after confirming that the request was legit and not part of a scam.

‘A double punch in the stomach’

All around the world, senior leaders of Rotary are routinely impersonated on Facebook, Instagram, and WhatsApp, says Andy Sternberg, manager of social media and audience development at Rotary International. Once the impostor is a contact in your network, a direct message often follows.

“It seems like members might be talking to the president, but then after a few messages, the scammer would say: ‘You know, I’m in a bind. I need some money. Can you send me money via Cash App or via PayPal?’” he says. “If you receive a direct message or even a text message from someone claiming to be our president or our general secretary, that immediately should be a red flag,” he says. This is not how senior leaders would reach out to people for the first time.

Even if a fraudster doesn’t fool you into parting with money, allowing the person into your social network gives them access to other members, and more potential victims. That’s why it’s important to carefully evaluate each friend request you receive.

Image credit: Mojo Wang

“Last year, I almost got caught with a scam of somebody trying to impersonate Gordon McInally,” Griffing says, referring to the 2023-24 Rotary president. But upon closer examination, he saw that McInally’s last name had been misspelled. “Something that I try to do more of, is just practice pausing,” he says.

For charitable donations, create a giving plan at the start of the year and stick to it, so as not to stumble into scams when they arise, says Amy Nofziger, director of fraud victim support for the AARP Fraud Watch Network. Criminals can exploit GoFundMe and other crowdfunding sites, so people should only give to one of these accounts if they personally know who’s behind it and can verify its legitimacy, Nofziger says.

Taking these extra steps could protect your money — and your heart.

When “giving-hearted” people get taken advantage of, “it’s like a double punch in the stomach,” says Derrick Kinney, a personal finance educator, author, and Rotarian from Arlington, Texas. “It’s not just I got money taken from me. It’s money that I wanted to also give to help other people, and now I feel almost doubly bad.”

Warning signs

While the median amount that Americans lost through an individual scam was $500 in 2023, according to the FTC, some people lose much more.

Experts say that instead of trying to spot specific trickeries, people should look for common red flags that span the universe of deceptive plots.

One of those warning signs is a sense of urgency, Schifferle says. “Scammers try to push people into getting in a state of frenzy,” she says. They try to convince you that you must act immediately.

Don’t fall for it. If you aren’t sure what you should do, call the AARP fraud helpline or a friend you trust for some advice.

Another tip: Pay close attention to what’s being requested, Nofziger says. “If they’re asking for a prepaid gift card or directing you to go to a crypto ATM machine, if they’re asking for money through Venmo or Zelle, if they’re asking for your Social Security number, your Medicare number — it’s, let’s say, 99.9 percent of the time a scam,” she says.

In the U.S., methods of payment including cryptocurrency, gift cards, and peer-to-peer networks like Venmo and Zelle aren’t protected in the same way as credit and debit cards. And when people lose money through these channels they’re likely to incur a higher financial loss, experts say. In contrast, credit and debit cards have stronger consumer protections. “Groups like mine have been very vocal in saying we need the services that scammers are relying on to defraud consumers to have more skin in the game,” Breyault says.

With credit and debit cards, the financial institutions can be on the hook if someone steals your account number and runs up charges, thanks to U.S. laws that hold the companies accountable for charges they authorize. “Most of the banks and credit card companies have adopted zero-liability policies that basically say you’re not liable for anything, as long as you report it,” Breyault says. “Consequently, the banks and the credit card networks invest a tremendous amount of money to identify fraud.” That’s also why you will get a call from your credit card company to alert you when fraudulent activity is detected, he adds.

Mitigate risk

There’s no way to stop fraudsters completely, says Joe Ruskey, a cybersecurity expert who owns a technology protection firm and a Rotarian in LaCrosse, Wisconsin. But there are ways to mitigate the risk.

The question experts want people to consider is: “How can we slow it down as much as possible, or make sure that when it does happen it’s not as much of a disaster?” he says.

Ruskey has given presentations on the subject to Rotary clubs, underscoring how important it is to verify contacts, properly vet pleas for donations, and use multifactor authentication for communication and financial websites, requiring more than just a password. For Rotary members to follow The Four-Way Test, they need a system of evaluating requests from people to ensure that those inquiries aren’t fraudulent, he says.

Keep in mind, criminals will often lurk for a while, watching how you communicate with people in your network and even learning nicknames before they strike — which can make them very convincing, Ruskey adds. They’re also indiscriminate, targeting people of all ages and income levels.

“You also have to understand that nobody is too small. They’re coming after everybody,” he says. “They’re coming after you because you’ve got very valuable data.”

In the end, Griffing doesn’t know of anyone who lost money during the scams he has dealt with. But even when there are no financial losses, the experience comes with some amount of stress and headache. The fact that people must carefully vet everyone also says something about the realities of modern communication and how little faith we can afford to have in new interactions, he says.

“Without getting too philosophical or anything, it goes to the eroding of trust we have going on in society right now,” Griffing says. “Getting everybody to pause and take a breath before they respond to an email, that’s really all we can do. Calm down and prevent damage going forward.”

This story originally appeared in the January 2025 issue of Rotary magazine.

The most common scams

  1. Text message scams that lure people to click on a link, perhaps tricking the recipient into thinking it’s related to a package that wasn’t delivered to them.

  2. Romance scams that often begin on dating sites or social media apps, with a scammer nurturing a sham relationship to take advantage of someone looking for companionship — right up until the deceiver gets money, personal financial data, or both, then disappears. “This is not just financially devastating; it’s emotionally devastating as well,” Nofziger says.

  3. Wrong-number texts that start with an innocuous message, perhaps what time someone is coming to dinner. After the recipient tells the person they have the wrong number, a back-and-forth conversation starts, a sort-of friendship ensues, “and the next thing you know, they’re asking you to invest in crypto-currency,” Nofziger says.

  4. Impostor scams including ones that involve people pretending to be entities such as Amazon customer service or the Internal Revenue Service. The popular grandparent scam involves the scammer posing as someone’s grandchild on the phone, pretending to be in trouble and asking for funds.

  5. Tech support scams where criminals allege the victims have viruses on their computer when they don’t, then make them pay for a worthless software package. “They say you’re going to lose all your data or all your photos, or your computer will be blocked, but oftentimes you just turn your computer off and on, and it’s fine,” says Schifferle, of the CFPB.