Inside A Vicious Phishing Scam Targeting RIAs: Read The Emails That Nearly Defrauded A Successful Financial Planning Firm Of $35,000 Hot

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Perhaps because I write about tech news and have previously written for advisors about phishing scams, the advisor does appear to have been a little naïve. The initial email contained some telltale signs of a phishing scam — specifically, an abundance of spelling, punctuation and grammatical errors. In fairness to the advisor, however, we are looking at events with 20-20 hindsight.

Just yesterday, I received an email from a business contact who might turn out to be a huge breakthrough for my company or could turn out to be a fraudster. I've asked for a telephone call to verify. (Telephone verification is always a good safeguard.) Point is, it's hard to tell sometimes whether someone is scamming you, even for a sophisticated techie like me.

When an advisor reads an email from a client on a busy day, it’s understandable that it could draw an advisor to ask an assistant to help the “client” get $35,000 wired.

However, the advisor in this instance would come to learn later that a hacker was spoofing his client’s email address and name in the emails he was reading. He says he dismissed the spelling errors in the initial email he received, thinking the client was in a rush. The scam began with this initial email:
 
-----------------------------------
From: Keith
Sent: Monday, April 15, 2013 12:16 PM
To: Frank
Subject: Good Morning
 
Hello,
 
    A friend of mine needs to borrow 35,000 do i have enough cash to be able to lend that to her. she will be repaying it back in about 4 months. ive lent her money before and got every penny back.......so i would like to do this if possible. if it is possible, can you also arrange for the wire transfer once ive gotten all of the necessary information.
 
Thanks,
--------------------------------------
 
Asked in an email if he had any advice to offer to practitioners about setting up a procedure to defend against phishing scams, the now security-conscious advisor responded: “Upload all sensitive client data and information to the web vault and confirm all requests for money via a phone call to the client,” he says. ” No call? No confirmation of ID? No $$$!”
 
After reading the email thread below, please post a comment letting me know if you would have or could have fallen for this scam? If you could have fallen for the scam, then you’re not reading A4A regularly and that’s a mistake.
 
 
 
 
 
 
 
--------------------Begin email thread (names changed or redacted) -----------------------
 
From: Mindy
Sent: Tuesday, April 16, 2013 7:34 AM
To: Frank
Subject: FW: Loan
 
FYI . . . funny-strange…
 
From: Keith
Sent: Monday, April 15, 2013 5:21 PM
To: Mindy
Subject: Re: Loan
 
Mindy,
 
    Thanks the wire is not needed again, As Susie has taKeith care of it....
 
Thanks once again.
Keith.
-----Original Message-----
From: Mindy
To: Keith
Sent: Mon, Apr 15, 2013 10:35 pm
Subject: RE: Loan
Dear Keith:
 
Attached is the completed form.   Please sign and have Susie sign in Section 4 of the form.  Scan it and email it back to me. 
 
If you send this back signed today, I will take care of it in the morning.  Have a great evening.
 
Sincerely,
Mindy
 
 
From: Keith
Sent: Monday, April 15, 2013 4:18 PM
To: Mindy
Subject: Re: Loan
 
Mindy,
 
      I am not at the office, but you can fill in the form scan and email it to me then I will sign it off and then scan and have it sent back to you. Here is the wire instruction below:
 
Bank Name: NAME REDACTED
Bank Address: REDACTED
Bank Phone #: REDACTED 3
Account #: REDACTED
Routing #: REDACTED
Account Owner: REDACTED
Holder Address: REDACTED
Wire Amount: $35,000.00
 
Kindly fill the form and send it to me then I can sign and email it back to you.
 
Thanks,
Keith.
 
-----Original Message-----
From: Mindy
To: Keith
Sent: Mon, Apr 15, 2013 10:12 pm
Subject: RE: Loan
Dear Keith:
 
Sure, I can complete the form with the wire transfer instructions you collect from your friend.  I will then email it to you but we don’t have a fax machine.  Actually, are you in your office now?  How late will you be there?  I have an appointment in your complex this evening, I could stop by your office tonight for your signature and then I will complete the form with your friends wire instructions tomorrow for you.  Let me know.
 
Mindy
 
 
From:Keith
Sent: Monday, April 15, 2013 4:04 PM
To: Mindy Smith
Subject: Re: Loan
 
Mindy,
 
      Can I send you the information then you can help fill the information then you can send me the form or fax it then I can sign and fax back as I dont want to have any errors on the wire form.
 
Thanks,
Keith.
-----Original Message-----
From: Mindy
To: Keith
Sent: Mon, Apr 15, 2013 10:01 pm
Subject: FW: Loan
Dear Keith.:
 
Attached you will find a Schwab Wire Transfer Authorization form.  Please print this form and complete all of Section 3 and sign Section 4.  I would need to have the completed, signed form either emailed back to me or dropped off at our office by 12:00 tomorrow afternoon in order for the funds to be transferred by the close of business tomorrow.  Please note the cost is $25.
 
Please let me know if you have any questions.  Have a great day.
 
Sincerely,
Mindy
 
 
From: Frank
Sent: Monday, April 15, 2013 1:57 PM
To: Keith
Cc: Mindy
Subject: RE: Loan
Importance: High
 
OK….I will see to it that Mindy will get back to you right after lunch.
 
Frank
 
From: Keith
Sent: Monday, April 15, 2013 1:49 PM
To: Frank
Subject: Re: Loan
 
Frank,
 
    She needs it for business purpose and she just sent me an email asking the status of the loan and I said I will get back to her today so I will be glad if this can be done for her today, Kindly get back.
 
Thanks,
Keith.
-----Original Message-----
From: Frank
To: Keith
Sent: Mon, Apr 15, 2013 7:44 pm
Subject: RE: Loan
Keith,
 
I’m sorry…is this something that is of an emergency nature, that needs to be attended to immediately?
 
I didn’t understand that you were waiting for Mindy to contact you immediately with those requirements.
 
What is the deadline for this action so we can figure out how to work this into our schedule for today?
 
Frank
 
From: Keith
Sent: Monday, April 15, 2013 1:31 PM
To: Frank
Subject: Re: Loan
 
Am still waiting for you to send me the requirement
 
thanks
-----Original Message-----
From: Frank
To: Keith
Sent: Mon, Apr 15, 2013 6:54 pm
Subject: RE: Loan
Keith,
 
Will do.
 
Frank
 
From: Keith
Sent: Monday, April 15, 2013 12:54 PM
To: Frank
Subject: Re: Loan
 
I will prefer a wire transfer, Kindly ask Mindy to send me the wire information.
 
Thanks,
Keith
-----Original Message-----
From: Frank
To: Keith
Cc: Mindy
Sent: Mon, Apr 15, 2013 6:50 pm
Subject: RE: Loan
Keith,
 
Good day to you as well!
 
There is enough cash in your joint account to make that loan.
 
We can arrange for the wire transfer, but there is a fee for that service. Wouldn’t it be easier just to give her one of your Schwab checks?
 
If you confirm you must wire transfer her that money, I will have Mindy of my office send you a separate e-mail to let you know what all the information you will need to gather in order to complete that transaction.
 
Sincerely,
 
Frank
 -----------------------------------
From: Keith
Sent: Monday, April 15, 2013 12:16 PM
To: Frank
Subject: Good Morning
 
Hello,
 
    A friend of mine needs to borrow 35,000 do i have enough cash to be able to lend  that to her.  she will be repaying it back in about 4 months. ive lent her money before and got every  penny back.......so i would like to do this if possible.  if it  is possible, can you also arrange for the wire transfer once ive  gotten all of the necessary information. 
 
Thanks, 
 

 

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