BY ROGER SMITH
MOUNTAIN CITIZEN
INEZ — In an era where scammers constantly devise new ways to defraud the public, everyday citizens are losing their hard-earned money to increasingly sophisticated schemes such as phishing, spoofing and romance scams. At the Kiwanis Club luncheon held Thursday at Masterpiece Kitchen & Café, local banker James Ayers of First State Bank in Inez provided advice on recognizing and avoiding these fraudulent activities.
“Fraud has always been an issue, but with the advancements in technology and AI [artificial intelligence] now, it’s become so much more,” Ayers remarked. “There’s actually a three-and-a-half-day fraud academy that is nothing but discussing what I’m going to talk about—how these scams take place and what we can do as bankers to prevent it.” He noted that education is the key to combating these threats.
Focusing on scams targeting older adults, Ayers shared alarming statistics: from June 2022 to June 2023, losses known by the federal government amounted to $27 billion, a figure he believes is likely much higher. He distributed literature to the luncheon attendees, pointing out that in Kentucky alone, senior residents lost over $3 billion in 2020, double the amount from 2019. He speculated that this number has possibly tripled by now.
“The biggest scams affecting seniors today are computer tech support and romance scams,” Ayers noted. He recounted a harrowing story from a recent Wall Street Journal article about a 71-year-old man who, within three months, lost his life savings of $800,000 to a scammer in China. The man had developed a relationship with a scammer he met online, demonstrating the manipulative nature of such frauds.
Ayers revealed that many scammers are themselves victims of human trafficking, operating from warehouses in South Africa, the Ivory Coast and the Philippines. These individuals are coerced into perpetuating these scams, with the Philippines and Ivory Coast being major hubs for these operations.
The banker also warned of the psychological toll these scams can take, mentioning that the elderly victim in the Wall Street Journal story had even contemplated suicide. Scammers build trust with their victims, creating a sense of urgency and pressure to extract money under false pretenses.
“It could be, ‘I was on my way to see you and my car broke down,’ or ‘My airplane was canceled and I need $1,000.’ Or somebody’s in jail and needs money for bail … With that sense of urgency, they are putting pressure on: ‘I thought you liked me. I thought we were friends.’ Once it starts, it just keeps building.”
Ayers noted that scammers do not want their victims to mail checks to them but prefer bank wires and gift cards.
“Once a wire goes, the money is gone and there is no getting it back,” stated Ayers.
“Technology is great. The technologies that we have now can be used for good, but they can also be used for ill,” he added. “Something really scary is AI voice cloning. If you ever want to get shocked and scared of the different technologies that are out there, Google AI voice cloning.”
Ayers noted that scammers do not target just seniors.
“The last article I read said there had been 28 suicides among young males, typically aged 14 to 17, who were victims of sextortion,” he said.
Kiwanis President Melissa Phelps, the Martin County Attorney, corroborated Ayers’ warnings, sharing her experiences with young people being extorted through shared photos. “They threaten to put that picture out there for the world to see and come and kill their parents if they don’t send money … It’s scary out there,” said Phelps.
Ayers cautioned against clicking on links in phishing emails, as this could allow scammers to access personal information. He also advised skepticism towards any online interactions that seem too good to be true.
“You look at articles like the one in the Wall Street Journal and wonder how this could happen, but it’s a very manipulative, psychologically taxing thing that these people do,” commented Ayers.
As a crucial piece of advice, Ayers stated, “Anybody that wants paid by a gift card is not legit. Tell them the local bankers said that. Don’t ever pay anybody by a gift card.”
He outlined the three “Ps” of scamming: problem, pressure and pay, explaining that all scams share these elements. “They are presenting you with a problem and pressuring you to pay,” said Ayers.
He further advised that banks will never ask for login information and warned against the risks of sending checks through the mail due to potential check washing.
For those who suspect they are victims of scams, Ayers recommended seeking help from various resources, including the Kentucky Attorney General Consumer Protection Hotline at 1-888-432-9257, the Federal Trade Commission at 1-877-382-4357, the FBI-Internet Crime Complaint Center at ic3e.gov, filing a complaint with the Better Business Bureau at bbb.org, reporting Social Security phone scams by calling 800-269-0271 or online at ssa.gov or oig.ss.gov, and for identity theft visit ag.ky.gov/identity-theft and identitytheft.gov.