We recently had a client fall prey to a sophisticated Schwab Bank scam. They've graciously allowed us to share their story to help others avoid falling into the same trap. This fraud began with a seemingly innocent text message that led to significant financial loss.
The Scam Unfolds
It started with a text message:
"Charles Schwab Bank Fraud Dept: [Name], Did You Make A Scheduled Transfer For $2,500.00 To Jessica Johnson? Reply Yes or No. CA 345768/ To Opt Out Reply STOP"
The scammer used the client’s first name and a fictitious recipient, "Jessica Johnson". The message seemed legitimate, so the client replied, "No". Shortly after, they received a follow-up message:
"Charles Schwab Bank Fraud Dept: Thank You. No Further Action Is Needed. A Customer Service Representative Will Be Contacting You Shortly."
The scammer then called the client, posing as a Schwab representative, and guided them through the process of making two wire transfers of about $5,500 each. The scammer claimed these were to "return the funds" to the account. Thankfully, the client contacted us immediately after the first transfer, and together we were able to work with Schwab to cancel the second wire transfer.
How the Scam Works
These scams are often called "Imposter Scams" because they impersonate trusted institutions. The fraudsters send thousands of such messages, hoping to find someone with a Schwab account, making the scam seem more legitimate.
Protect Yourself: Tips to Stay Safe
- Silence Unknown Callers: Silence calls from unknown numbers. This prevents scammers from reaching you directly. Silenced calls go to voicemail, giving you time to verify any messages.
- Distrust All Incoming Calls: Unless you initiate the call, be skeptical. If someone calls claiming to be from Schwab, ask for a case ID, hang up, and call Schwab back using a verified number from their official website.
- Never Wire Money: Avoid wire transfers whenever possible. They are often used in scams because they are hard to reverse. Legitimate institutions usually offer safer alternatives.
- Report Immediately: If you suspect a scam, contact your financial institution immediately. Quick reporting can sometimes stop fraudulent transactions before they are completed.
Final Thoughts
Scams like this are sophisticated and can happen to anyone. If you fall victim, remember you are not alone. Report the scam to your financial institution, the FTC, and the FBI's Internet Crime Complaint Center. Stay vigilant and help spread awareness to protect others.
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