The Right Way to Dodge Scams, Plus Learn How Robo-Investing Works

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0:56Sean Pyles:It seems like you can't go anywhere, whether it's a webpage or a store, without encountering some kind of scammer nowadays. I agree with that. You can't even go on your phone without encountering a scammer these days, Sean. It's exhausting, but together we can hopefully fight back at least a little bit.

1:18Sean Pyles:Welcome to NerdWallet's Smart Money Podcast, where you send us your money questions and we answer them with the help of our genius nerds. I'm Sean Piles. And I'm Elizabeth Ayola. This episode, we're going to answer a listener's question about whether RoboAdvisor accounts are riskier to invest in than traditional brokerage accounts. But first, we are kicking off a new series called Scam Stories, where we share real stories from folks like you who've experienced a scam, identity theft, or fraud, and how they handled it. We've all gotten those text messages from someone offering a job or an email with an urgent message from our bank that we can only get if we click the link in the email.

1:53Scams are seemingly everywhere, and honestly, it's all too easy to fall for them.

1:57Sean Pyles:My favorite are those random text scammers that just say, hey, and like nothing else in there. Like they're hoping that I strike up a conversation with them. But even though scams are everywhere, there's still a lot of shame and guilt tied up with actually being scammed. So we want to break down this stigma and help people know how to spot and recover from scams. And hearing your stories is one of the best ways to do that. So this episode, we're going to hear a story about credit card fraud and how scammers are putting a new twist on this classic form of fraud. Joining us to tell their story is a friend of mine, Scramble Hughes.

2:31Sean Pyles:Scramble, welcome to Smart Money. Hey, thanks for having me. I'm excited to be here. Scramble, before we get into your scam story, I want to know, and I'm sure the people want to know, how you got the name Scramble. Yeah, so I'm a circus performer, specifically a juggler, acrobat, and kind of variety entertainer. And I work mostly in a duo these days. But when I first started, the first tour I did was with a group in Northern California. And I was part of a clown duo. And we were Ramble and Scramble the Clown. He was the talker and I was the mute. And our goal was to save Lenny the Bigfoot from an evil mercenary trying to collect Lenny's foot for some rich entrepreneur type that wanted to start a museum of Bigfoot's feet.

3:15Naturally, as you do. Right, exactly. Yeah, naturally.

3:19Sean Pyles:I've known you for how many years now? I've never heard this story. I feel like I know you in a whole new way. Yeah. So that's how it started. And then I went on a different tour where there was three different Nates. And so it was natural that everybody just called me Scramble. Nate is your legal name. So you just kept Scramble. Nate is my legal name. Yeah. So Nate Hughes is my legal name and Scramble James is my performance slash casual name. It's the name we all know and love you by. And I must say, if I had to take a wild guess, I would have never guessed that. The only thing that comes to my mind when I think of scramble is eggs because I love eggs.

3:49That's most people's first response. Are you an egg enthusiast, Scramble? I do like eggs. They got excellent omegas and the cholesterol is actually the good type of cholesterol. And you need that for all your circus performing.

4:01Sean Pyles:There you go. Yeah, that's right. Okay, perfect. So like I said, you experienced credit card fraud, which is not nearly as fun as performing in the circus. So can you start at the beginning and tell us the story of what happened? So it was a dreary night in October. No, it was a fine night. Yes, that's a stage for it. So yeah, it was a night in October and I was just going about my business. I had a meeting with my business partner. And so we were having our business meeting, talking about the next convention we were going to. And we had to book all this stuff and draft these emails to send to people, you know, kind of normal sales kind of business stuff, which is half of running a circus business.

4:42all of a sudden I got a text message from my bank that I luckily saw right away and I was like oh fraudulent purchase and then I was like oh I maybe have to deal with this and then all of a sudden I got vibration after vibration after vibration and I had 30 40 50 60 text messages rolling in and I was like oh my god what is happening and they were from like totally random sources and entities and people. It wasn't just like, hey, it was like, thanks for signing up to our Pilates gym. Thanks for signing up to our equestrian ranch service center. It was like so random. Like the most random and like most of them were in English.

5:29Some of them were in Spanish. And so I told my business partner, I was like, I got to get off the phone and figure this out. And so there was, of course, a link in the text message that the bank sent me to follow. But I was pretty skeptical of that due to all the other messages I had received. Smart. So I went onto my computer just very briefly to check, did I get an email from my bank? And I found out I had like over a thousand emails in one of my email accounts. That must have been overwhelming. Yeah. I just immediately was like, cool, number on the back of the credit card. I am calling this now.

6:05Yes. I'm not clicking or touching anything.

6:08Sean Pyles:It's the wise thing to do. Go straight to the source. Yeah. Don't click any links. Yeah. But I was definitely, like, freaking out a little bit, Elizabeth. I was like, oh, my God. I would be. A thousand emails? Where do you start? They were coming in like that. It was like the number was actively going up as I was just, like, on. And these are from different sources, right? Yeah. And, like, the emails were a broader spectrum of origins. so like there was like asiatic language sub subjects and like german and spanish and like some french and of course english it was kind of like i was i was like wow i just had my information sold to the entire world but so i call my bank right away because i'm like first off i gotta deal with this credit card thing and then i can try to process how to do the rest of this so i call my bank you know that's the kind of the normal stuff you connect with the fraud department and And, you know, she's verifying my identity, which I was actually like kind of like, man, all I had to do was give her my name, my birthday and my address.

7:11If I had somebody's license, I would have all of that stuff.

7:15Sean Pyles:Right. It's almost too easy. This maybe needs to be updated a little bit. I'm sure they could tell that it was you calling, but we know that people can spoof the numbers that they're calling from. Right. So that may bypass any verification measures that they have, too. Yeah. So banks, if you're out there, try to figure out something a little better. So what did the person say when you were talking to them? They obviously were like, we're sorry, which transactions and they were all the transactions were from TikTok shops. So I was like, oh, it's those transactions. And then they kind of were like, OK, well, we'll review these.

7:49Let me put you on hold. I'll check with whatever team or person she needs to check with or process that they had to go through on the other line. they put me on hold. And then when they come back from hold, they're like, Hey, did you authorize anyone to use your credit card? And I was like, no, definitely not. And they were like, Oh, we have someone talking to another agent that is saying that you have authorized that and they're on the line right now. And I was like, that is the person who is trying to steal from me. Like get them off the line.

8:20Sean Pyles:Yeah. Like that is not real. I can't believe that. That is just the wildest thing. You were on the phone trying to resolve this as the scammers were trying to resolve it in their own way too, to make sure these purchases went through. Yeah. And you called like that, you called instantly. Instantly. Yeah. Cause they probably had a couple of transactions went through and I imagine they had more lined up and one of them got blocked and then they were trying to say, Oh, you shouldn't be blocking this transaction. Right. In whatever way. As if TikTok shop wasn't sketchy enough. I know. Yeah. Yeah. You know, I'm just curious what they bought.

8:53It was like a couple hundred bucks. I'm like, man, did they buy a cool massage gun? Or was it at least something cool? Always the most random stuff. Oh my goodness. I'm not a huge six. But when I scroll TikTok, I see things that I could have never perceived would exist in the world. So it could be anything. Right. Was it some giant water balloon filler for industrial purposes? We'll never know.

9:16Sean Pyles:So did you get any pushback when you said that you didn't have anyone authorized to use your card? Or what was that conversation? The agent was actually very accepting of that. They just were like, okay, you're sure? And I said, yes, I'm sure no one's authorized. And then they basically said, okay, let me put you on hold again. When they came back, they were like, okay, yeah, we got you. We'll investigate this. We can't refund your money right now, but give us seven to 10 business days and we'll let you know, basically. And you did get the money back. Yes, it did take around the maximum amount of time to get the money back.

9:50How long was that? Can you remember? Seven to 10 business days. But it was odd. They completely removed the account from my online banking portal in that time. So it just completely disappeared. So you couldn't see your balance or anything? At all. Yeah. It was just gone. And so when that happened, I did call them and was like, Hey, is this okay? Because I was like, am I being robbed? I was like, is something else happening?

10:17Sean Pyles:Yeah, and also, this was your business card, right? So you probably couldn't conduct your business transactions as you normally would, given that it was taken out of your online portal. Yes. So I got a new credit card, they refunded me money, and they sent me the new credit card, which I activated and started using. But after a couple weeks, there was more fraudulent purchases on that card. And it turned out that the bank had sent me a card with the same card number. And so somehow the people that had the card information were able to still use it. So then I had to kind of restart the process and tell the bank which the ones were the fraud purchases and this and that.

10:59And so I was refunded for those as well. And then the bank finally sent me a totally brand new card with totally different number and everything like that. And then that card has been working just fine. I just want to ask Ramble how you were feeling Because I know when lots of people get scammed, they sometimes feel feelings of shame or embarrassment. So how were you feeling when all this craziness was happening? In the moment, I don't want to say panic because I do feel like I was relatively measured and focused. I was like, I will not have these people steal my money. You know, like it's like I was determined.

11:35Circumstantially in that moment, it was really hard and overwhelming. But when I get focused, I kind of like enter a tunnel that no outside forces can enter for a little while. I've had my information stolen before. So this isn't my first rodeo, I guess. So I didn't necessarily feel shameful about it. I can identify with someone feeling that way for sure. I mostly felt relieved that I had acted quickly and not engaged in any of the content that was sent to me other than what the bank had told me to do. and just like right away done that and not tried to go through any of the emails or text messages and just call it the number on the card.

12:16And that's the essential thing to do

12:17Sean Pyles:because so many people, they may get that text message or the phone call from purportedly their bank and it's actually the scammer contacting them through text or phone call. So you did the right thing calling the number on the back of your card. Do you know how they got your card information, let alone your email and email address? I believe that they got my card information through a corrupted or hacked credit card reader. I think it's either that or they had RFID scanner because I had basically traveled from Portland, Oregon, where I live, to South Central California for this fair, the contract I was working.

12:55And so I used the card along the way. I used it at the fair and I used it back. And then it was the week after I had gotten back on like a Tuesday or Wednesday that this happened. and I hadn't really made any online purchases at that point. And then what was weird about the email is that the email that they got was not linked to the card in any way. I believe what they did is they like saw the name on the card and then like looked for my website off of that name. Wow. Because the email that they got was my performance email for my solo juggling that they could find if they found my website. But that email has no link through my bank to the credit card or through the credit card provider to me at all.

13:38That is fascinating. You're not still getting all these text messages and emails. The text messages have slowed down. The way that I dealt with that was I actually had to block each individual contact because the report junk feature on your iPhone, if you have an iPhone, doesn't actually ban or like stop contact from that person. Like you would think reporting junk in your email does, for example. Over time, it took me like maybe a month and a half, two months, but I eventually got every one of these spam numbers blocked. Now I just have a normal amount of text message spam that say like, hey, or like our recruiting service has found you.

14:19You know, like that kind of stuff. Scramble, it sounds like you are pretty cognizant of steps to take when you are in a situation where you've been scammed. Is there anything new that you've learned from this experience in terms of maybe how to prevent a scam or what to do when you do encounter a scam? Yeah, I think it confirmed a couple of things. I used my credit card, which has some fraud and theft guarantees on it. So that process, I feel like, was made a little easier because I wasn't using a debit card. The thing that I did that I learned a little bit about was doing credit freezes. So after I had called and everything like that, I checked my other accounts that I have and I was a little worried about all of that.

15:00So I went to the three credit bureaus, Experian, TransUnion, and Equifax. There you go. Ding, ding, ding. And so I did the credit freezes on all of those. And some of them, the thing that I learned is that they have temporary credit freezes too. So on the ones that allowed that, I did like a month of credit freezing just so that you have an immediate block and then it would alert me when my credit was being unfrozen basically.

15:28Sean Pyles:Well, the good thing that folks should know is that freezing your credit is really easy, about as easy as you mentioned it was, Scramble. And I keep my credit frozen all the time, actually. And I only thought when I think I'm going to apply for a new line of credit, everyone should assume that their social security number is floating out there on the Internet somewhere. And it, as you pointed out, can be really easy to try to do something fraudulent with your information. So I think that's a pretty simple step for everyone to take to just try to stop what fraud they can. So look into it. It would take you maybe 30 minutes to do at each of the three bureaus, and that way you can stay safe long term.

16:05Sean Pyles:And then again, thought, next time you need to use your credit, stop scammers in the interim. It can also be helpful, I think, as a parting tip to be mindful or aware of the different scams that are out there because these scammers are very innovative and they're always coming up with new things. So just keeping your eye out for the scams that are out there can help you be mindful in case that scam is coming your way. And Scramble, do you have any parting words of wisdom you want to leave our listeners with? Don't panic. Try to do the most logical basic step that you can think of because they are going to try to overwhelm you in a lot of situations and induce panic, which often creates a decision that you may not make in a normal or calm headspace.

16:47So just try to work your way through that, take a couple breaths, and then do the baseline response first.

16:54Sean Pyles:Well, Scramble, thank you for coming on and sharing your story. Yeah, of course. Thanks for having me. And if you folks out there listening have an experience with a scam that you would like to share with us, let us know. Leave us a voicemail or text us on the Nerd Hotline at 901-730-6373. That's 901-730-NERD. Or email us at podcast at nerdballet.com. And again, sharing stories can be one of the best ways to fight back against the scammers. So let's hear what you got. We're about to get to this episode's money question segment where we go into whether robo-advisor accounts are any riskier than traditional brokerage accounts.

17:27But before we move on, we have one last announcement. We are running another book giveaway sweepstakes ahead of our next Nerdy Book Club episode. Our guest is Dana Miranda, author of You Don't Need a Budget, Stop Worrying About Debt, Spend Without Shame, and Manage Money with Ease.

17:44Sean Pyles:To enter for a chance to win our book giveaway, send an email to podcast at nerdwallet.com with the subject book sweepstakes during the sweepstakes period. Entries must be received by 1159 p.m. Pacific time on July 31st. Include the following information, your first and last name, email address, zip code and phone number. For more information, please visit our official sweepstakes rules page. All right, let's get to this episode's money question segment. That's up next. Stay with us.

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