Barefoot Investor: Scott Pape offers assistance to family defrauded of family home by scammers
A crook stole our family home!
Natalie and Nathan ask: My husband and I have seven children, ages 1-13. Five weeks ago, we finally took the plunge and bought a large family home!
After the transaction was completed, our lawyer, Jenny, called us and ordered us to put our deposit of $165,000 into the trust account. Then at 6:47 the next morning, Jenny emailed us with a “correction” to that account. I thought that was a little weird, so I emailed back to confirm. Jenny returned almost immediately. All good.
So my husband took his morning off and went to the bank to transfer the money to the account. He paid the $35 wire transfer fee and made sure the cashier checked and double-checked the numbers. That night we celebrated!
Then, two days ago, Jenny called to ask where the deposit money was! Unbeknownst to her, hackers had taken over her computer and communicated with us from her exact email address, impersonating her, using her exact language!
So we immediately called the police. They did an investigation and found out the scammer was in Kenya so it was out of their jurisdiction. They also told us that Interpol does not deal with “small sums”. “There is nothing you can do,” the police told us.
We spent hours on the phone with our bank. They gave us $5,000 on the condition that we drop all claims against them. To say we are gutted is an understatement. Please alert all your readers to the risk of hackers gaining access to online transactions.
Barefoot answers: My heart absolutely breaks for you.
Here’s what you learned the hard way…that most people don’t.
When you transfer money, your bank always asks you for the name of the account you are transferring the money to. Logically, you’d think it’s for their systems to match and verify the account name.
But they don’t. You can write “IMA BANK ROBBER” in the account name and it would still pass.
But wait, aren’t banks investing billions of dollars a year in cutting-edge artificial intelligence so they can sell you credit cards every time you log on? Surely matching the account name would be a fairly basic code to add?
Well, it turns out it is, and it works! Five years ago, Dutch banks introduced account name verification and reduced this type of fraud by 81%.
So… why don’t our banks do it? Well, it just seems like it’s not a priority for them.
But it’s for me.
Nathan and Natalie, let’s have a row this week, and see what happens.
Rich child, poor child… Worried mom
Worried mum asks: We have binoculars and we recently bet on the Barefoot pocket money strategy. One of the twins is very motivated when it comes to working and earning her pocket money, while the other doesn’t care at all. Like AT ALL!
Its “currency” is relationships, not money. She barely gets pocket money every week and we don’t make up the difference, but she still doesn’t care. What do you do when financial or future motivation is not an incentive for a child?
Barefoot answers: So you have a child who is completely unmaterialistic and values people over money?
Sounds like a great kid to me!
Here’s what I learned: lecturing and bullying your kids doesn’t work.
That’s why my brand new book (coming out in November) is written directly for children.
I gave a review copy to a child who looks exactly like your daughter.
He’s not money driven at all… Yet he read it cover to cover and started building his own small business, not to buy stuff, but to donate at Food Bank.
Draw your own path!
DISCLAIMER: The information and opinions provided in this column are general in nature and have been prepared for educational purposes only. Always seek personalized financial advice tailored to your specific needs before making financial and investment decisions.