Scammers are getting better at taking advantage of rich people in a time when technology changes faster than ever.
Fraudsters love to target wealthy people because they have a lot of money, a lot of social power, and sometimes a lot of attention from the public.
The Federal Trade Commission (FTC) says that scams cost Americans $8.8 billion in 2022, which is 30% more than in 2021. Rich people are at even greater risk because scams often involve six- or seven-figure amounts of money.
A recent GOBankingRates report named 7 of the most common scams aimed at wealthy Americans.
This article breaks down these scams and adds actionable insights, real-life examples, and expert tips to help you stay safe.
1. Whaling: Phishing’s Elite Cousin
Whaling attacks are phishing schemes that are very specific and are aimed at CEOs, celebs, politicians, and other well-known people. Whaling, unlike generic phishing emails, requires a lot of study.
Open-source intelligence (OSINT) is what scammers use to find out about their target’s family, hobbies, or work connections.
How It Works:
- Attackers impersonate trusted entities (e.g., a colleague, bank executive, or government official).
- They craft convincing emails or messages, often referencing real events (e.g., a recent charity event the victim attended).
- The goal is to trick the victim into wiring funds, sharing login credentials, or approving fraudulent transactions.
Recent Example:
In 2023, the CEO of a Fortune 500 company lost $750,000 when he got an email that seemed to come from the company’s CFO and quickly asked for a wire transfer for a “confidential acquisition.”
The email used the CFO’s real writing style, which was gathered from earnings calls that were open to the public.
Prevention Tips:
- Verify unusual requests via a separate communication channel (e.g., call the sender directly).
- Train executive assistants and family members to recognize red flags.
- Use email authentication tools like DMARC to block spoofed emails.
2. Relationship Impersonation Fraud: Trust Exploited
A lot of the time, scammers pretend to be accountants, lawyers, or private bankers who are close to the target. With the rise of deepfake technology, these scams look more and more like the real thing.
The Deepfake Danger:
Deepfakes, which are videos or audio clips made by AI, can copy someone’s voice, facial movements, and body language.
In 2024, a billionaire got a video call from his “lawyer” talking about an important investment in another country. The client lost $2 million because the lawyer was a deepfake.
How to Spot It:
- Be wary of sudden urgency (e.g., “Transfer funds within the hour or lose the deal”).
- Confirm identities through pre-established codes or phrases.
- Use encrypted communication apps for sensitive discussions.
Expert Insight:
“Never trust a single form of communication,” says Steve Tcherchian of XYPRO. If someone asks for money, make sure they are who they say they are in more than one way.
3. Investment Scams: AI-Driven Deception
Fraudsters are using AI to copy voices, write in different styles, and make fake papers. A lot of the time, these scams involve fake real estate deals, “opportunities” with cryptocurrency, or exclusive hedge funds.
Real-World Case:
A tech executive in California lost $500,000 by putting his money into a fake AI company. Using AI tools like ChatGPT, the con artist copied her broker’s email domain and sent fake success reports.
Red Flags:
- Promises of “guaranteed returns” or “zero-risk” investments.
- Pressure to act quickly to “secure your spot.”
- Unsolicited offers from unverified platforms.
Protection Steps:
- Cross-check investment opportunities with regulatory bodies (e.g., SEC’s EDGAR database).
- Avoid clicking links in unsolicited emails; manually type official website URLs.
4. Tax-Related Scams: The IRS Impersonation Trap
When tax season comes around, con artists pretend to be IRS agents or tax preparers and tell their victims they owe back taxes or fines. The IRS says that from January to April, tax scams go up by 40%.
Common Tactics:
- Threatening voicemails warning of imminent arrest or asset seizure.
- Phishing emails with fake tax forms (e.g., “Click here to review your 2024 filing”).
Recent Trend:
When it came to Employee Retention Credit (ERC) claims in 2023, the IRS warned of a rise in scams. In exchange for upfront fees, fraudsters offered to help businesses claim fake points.
How to Respond:
- The IRS never contacts taxpayers via email, text, or social media.
- Report suspicious calls to the Treasury Inspector General for Tax Administration (TIGTA).
5. Fake Seller Website Scams: Luxury Goods That Don’t Exist
Fraudsters make fancy websites that sell expensive things like private jet rentals, rare watches, and boats. This kind of websites often use stolen pictures, fake reviews, and one-time deals to get people to sign up.
Spotting Fake Sites:
- Check for HTTPS encryption and a padlock icon in the URL bar.
- Look for grammatical errors or inconsistent branding.
- Search the domain’s registration date using WHOIS—scam sites are often newly created.
Victim Story:
An auction site sold a “rare Picasso sketch,” and a person from New York paid $200,000 for it. The site went away a few days after the payment was made.
Safe Shopping Tips:
- Use credit cards for purchases; they offer better fraud protection than wire transfers.
- Stick to reputable platforms like Sotheby’s or Christie’s for high-value items.
6. Charity Scams: Exploiting Generosity
During disasters or holidays, con artists make fake organizations. For example, after the wildfires in Hawaii in 2023, more than 50 fake nonprofits sprung up on crowdfunding sites.
Verification Steps:
- Use Charity Navigator or GuideStar to confirm a charity’s legitimacy.
- Avoid donating via gift cards or cryptocurrency.
Expert Advice:
Heather Mattison of Woodr Insurance says, “Real charities will never make you give right away.” Take your time to find out more.
7. Loved One Scams: AI Voice Cloning Nightmares
Scammers use AI voice makers to make voices that sound like family members. They often say they are in danger, like being kidnapped, arrested, or hospitalized.
Heartbreaking Example:
A Florida couple wired $50,000 to “save their daughter from kidnappers.” The voice was an AI clone trained on her TikTok videos.
Prevention Plan:
- Establish a family password or code phrase for emergencies.
- Call back using a known number (scammers often fake caller IDs).
How to Stay Safe: Proactive Measures
- Multi-Factor Authentication (MFA): Enable MFA on all financial and email accounts.
- Password Managers: Use tools like 1Password to generate and store complex passwords.
- Education: Regularly discuss scams with family, staff, and advisors.
- Monitor Accounts: Set up transaction alerts with your bank.
- Report Scams: File complaints with the FTC (ReportFraud.ftc.gov) and FBI’s IC3 portal.