How not to get scammed like the financial-advice writer who lost $50,000 to fraudsters: ‘There are a million things I wish I had done differently’

Charlotte Cowles, a columnist for New York magazine, was tricked into believing she was a victim of identity theft and under investigation for federal crimes, and was pressured to withdraw cash for living expenses before her bank accounts would allegedly be frozen. Over the course of several hours on the phone, she was transferred by a fraudster claiming to be from Amazon
AMZN,
-1.43%
to one claiming to be from the Federal Trade Commission to one claiming to be from the Central Intelligence Agency. 

She recounted her story in an article that highlighted how even a well-informed, “maddeningly rational” person can get caught up in the panic stirred up by skilled con artists.

After X users roasted Cowles and questioned her authority as a personal-finance writer, she deleted her X account. But experts say that rather than criticizing the victim, the public could take away some important lessons from her story. 

“For every person who’s called me an idiot in public, there’s been another one emailing me in private to say that a similar thing happened to them,” Cowles said in an email to MarketWatch. 

Last year, American consumers reported losing more than $10 billion to fraud, according to the latest numbers from the FTC, up 14% from the previous year. A significant share, $2.7 billion, was lost to impostor scams like the one Cowles got mixed up in.

There were moments during her experience in which she felt something was wrong, and questioned the criminals on the other end of the phone. “How do I know you’re not just spoofing this?” she asked about the alleged FTC number the criminal was using. Yet she still complied with their requests.

MarketWatch spoke to privacy and identity-theft experts about what to do if you find yourself caught up in a transaction that you feel, somewhere in your gut, might not be legitimate.  

1. Get off the phone

It’s essential to interrupt the surge of adrenaline that leads people to make decisions based on impulse rather than reason. Get off the phone — politely, if that helps — and tell the person you’ll call them back after you’ve thought about it.

Cowles’s con started off with someone claiming to be from Amazon checking on some suspicious activity on her account. She could have hung up the phone at many points, and wrote in hindsight, “Were my tendencies toward people-pleasing, rule following, and conflict aversion far worse than I’d ever thought?”

It can feel unnatural to stop engaging with people who are trying very hard to captivate your attention, said James Lee, the chief operating officer of the nonprofit Identity Theft Resource Center. One way to get off the phone, he advised: “Say, ‘OK, you’re calling from Amazon, I’m going to contact you. Thank you very much for bringing this to my attention.’ That’s the end of the conversation. There’s no reason to go further until you have verified that this is a real circumstance.”

The same is true for anyone claiming to be a relative or friend needing money urgently, as there are programs that can clone voices and spoof phone numbers now, too. Tell them you’ll call back. 

Take your time after that. Breathe. Calm down and don’t rush.

2. Verify the identity of the caller

Next, tell someone what’s going on. Don’t handle this alone.

“Scammers often try to isolate you by asking you not to speak with other people, and such a request is a major red flag,” said Michael Steinbach, global head of financial crimes and fraud prevention at Citi.

“In retrospect, there are a million things I wish I had done differently,” Cowles told MarketWatch. “I think the most effective thing anyone can do if they’re caught in the midst of a bad situation is tell someone they trust what’s going on. More than anything, that’s what I wish I’d done. But these scammers were very effective in making me feel like I couldn’t tell anyone. I’ve since learned that this technique is known as ‘blocking the exits.’”

If a friend or relative seems to be calling you for money, hang up and call them back from your phone at the number you usually use for them. Or find the real customer-service phone number of the entity claiming to contact you. Ask if they have initiated contact with you for whatever the stated issue was. 

Amazon said in a statement that customers should be wary of false urgency, and “if you’re ever unsure, it’s safest to stop engaging with potential scammers and contact us directly through the Amazon app or website.” “Do not call numbers sent over text or email or found in online search results,” the company said. “Remember Amazon will not ask you to download or install any software to connect with customer service nor will we request payment for any customer service support.”

By initiating the call to a real and trustworthy phone number, you are seizing back control of the situation. Cowles, on the other hand, was transferred from the fake Amazon agent to someone claiming to be an FTC investigator, who transferred her to someone claiming to be a CIA investigator. 

These are not agencies most people have any interaction with, so it can be hard to discern whether the interaction is suspicious. But there’s one important thing to know: These investigators will not call you out of the blue, and Amazon will not transfer you to a government agency. 

After the story was published, FTC chair Lina Kahn said in post on X, “A reminder that nobody from @FTC will ever give you a badge number, ask you to confirm your Social Security number, ask how much money you have in your bank account, transfer you to a CIA agent, or send you texts out of the blue.”

The FTC also offered guidance on when the agency would and wouldn’t reach out to consumers, saying, “The FTC won’t demand money, threaten you, or promise you a prize.”

While tax scammers often say they are calling from the Internal Revenue Service, the agency specifically says on its website it “doesn’t initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information.” In general, the IRS initiates contact “through regular mail delivered by the United States Postal Service.”

“If I’m really under investigation, someone’s going to come to my house and show a badge and have paperwork. They’re not doing this over the phone and texting you,” said Mark Kapczynski, a privacy expert at OneRep, a company that removes clients’ private information from the web. If a scammer is threatening action against you, “Wait for them to show up at your doorstep. They just don’t operate that way.”

And while it may seem obvious, a government agency or law enforcement will not pressure you to transfer money to them in a hurry.  

3. Maintain zero trust

If you’re somehow still on the phone, maintain zero trust: Hang up and verify with a legitimate and known entity at every stage. Scammers exert pressure and make you feel like you have to act immediately. You don’t.

Every step along the way “is another opportunity for you to take back control, and say, ‘I don’t know anything about that. I’m going to have to get back to you,’” Lee said. Especially if these are entities you don’t do business with, or people you’ve never spoken to before, requests for money are a huge red flag. Stop there.

Say, “I’m going to go find an independent person at my bank, at some other institution that I trust, and I’m going to have them tell me this is how this works,” Lee said. The person on the other end of the phone may sound angry, but remember, their anger is not a real threat.

Cowles wrote about what she learned from this experience and shared her own tips in a separate post.