The Investment Scientist

Email Scam Targets Financial Advisor Clients

Posted on: February 4, 2013

Email scam

Email scam

I recently received an email from a client of mine. The mail contained only one line: “What’s the balance of my account?”

“It’s $978k as of close of yesterday,” I replied.

“I need $500k for a business transaction,” my client responded.

I went into an explanation of the tax consequence of selling long-held investments to fund a business transaction, but my client insisted that he needed the money urgently. So I emailed him: “send me your wire instruction, and I will make sure the money will be in your account tomorrow.”

I received this:

Bank Name: OCBC Bank
Bank Address: #301-11A Oversea chinese Banking cooperation,1 pasirris Central Street, White Sands Singapore 518457
Bank Account Number: 555-7-037586
Swift Code: OCBCSGSG
Account Name: Recto Mariecel Dejesus

I immediately noticed this was an overseas wire and was an account not under my client’s name. I was suspicious, so I emailed back: “Can you give me a call to verify your intention?”

“I am overseas now and away from any phone, I can’t call but I can write you an authorization to wire the money.”

I became more suspicious and called my client immediately. I left a message asking him if he indeed needed half a million dollar for a business transaction. A few minutes later, my client called back. He was at his California home. Apparently, somebody hacked into his email account and tried to lure me into sending half a million dollars overseas.

Rest assured, I am very alert to this type of scam. On top of that, all of my clients are set up with what we call level 1 authorization, that is, I am only authorized to send money to accounts under my client’s name. I purposefully do not use the less secure level 2 authorization, which would give me the authorization to send money to accounts not under my client’s name. Because of my ex ante precaution, my client’s money was never at risk.

After this incident, I now insist that my clients not use Yahoo mail. It seems to me 80% of email scams originate from hacked Yahoo accounts, with the rest coming from hacked AOL and hotmail accounts. Gmail is by far the most secure email server, especially if you use its two-step verification for login.

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5 Responses to "Email Scam Targets Financial Advisor Clients"

Wow! and once it goes out on a wire transfer, it’s gone.

Good thing I have precaution. If I get level 2 asset movement authorization from clients, I can send money to outside accounts. Even if clients want to give me level 2 asset movement authorization, I would not accept it. When money is moving out of client accounts, I want them to sign on to it every time. This way, both my clients and I get peace of mind.

Dearest Michael Zhuang,
I am having a wonderful opportunities to invest in a Nigerian oil prospectus, but only if I transfer a fee today to my new found relative. He is a lawyer at an overseas bank with no financial laws and lots of lost assets. This makes me want to trust him immediately even though I have never met him. Please send me 70.273% of my assets.
Bester regards, your client. Prince Paul A Jerry
P.S. I am out of town on vacation at my timeshare in the Congo.
P.P.S. These scammers will try any trick, won’t they?

Dear Prince A Jerry,

Say Hi for me to your new found relative, he sounds like a trustworthy guy. The opportunity to invest in Nigerian oil prospectus is once a life time. If there is any slot left, I’d like to put in a million of my money too. Please call your relative and put in some good words for me. Oops I forgot you are in Congo where there is no telephone.

Your advisor Michael

a sucker born every minute & never give a sucker an even brake–invented by Carnies and Circus people right in the USA; don’t blame the Africans or anyone else. greed, avarice and selfishness eventually lead to total destruction of self

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Michael Zhuang is principal of MZ Capital, a fee-only independent advisory firm based in Washington, DC.


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