Financial Fraud Fallout

In late 2019, when retired librarian Fran Shepherd went to transfer money from her savings account into CDs, she was stopped by the term "insufficient funds." She and her husband, who live in Wappingers Falls, New York, were shocked to learn that their account, which had more than $30,000, was empty.

Disbelief became powerlessness, and alarm became fear. Over 1½ years, the thief drew even on a substitute account, and their bank was less than cooperative. "The most frightening part was not knowing whom to trust anymore," Shepherd says.

Two years ago, a pair of thieves stole $5,000 from my credit union account; they appear to have known my foreign, spoken-only phone password, which I've never used elsewhere. The two then spent the next five months going after almost every account my spouse and I have in three states. I felt frustration, anxiety and occasional fury. Trying to foil them week after week seemed like a paranoid game of Whac-A-Mole.

"Victims of identity theft will feel overwhelmed at times by the psychological pain of loss, helplessness, anger, isolation, betrayal, rage and even embarrassment," writes the Georgia Attorney General's Consumer Protection Division. "This crime triggers deep fears regarding financial security, the safety of family members and the ability to trust again."

According to a Bankrate Financial Fraud Survey published in March, 34% of Americans have experienced financial fraud or a scam in the past 12 months. Of those, 37% lost money.

Few Americans think that they will fall for a swindle or that a thief will get through security precautions. But if it's happened in the past year, Bankrate finds, more than half those ripped off — particularly baby boomers — now believe it will happen again soon.

Where the victim was hacked or did not play an active role — cases of ID theft, mainly — a range of emotions is common, says Marti DeLiema, an assistant professor at the University of Minnesota School of Social Work who studies financial fraud and older adults.

Add the layer of a scam — where the victim was persuaded to buy gift cards or cryptocurrency, make an ACH transfer or wire funds to a thief — and "there's a lot of anxiety and shame," says Mona Terry, COO of the nonprofit Identity Theft Resource Center, which aims to reduce identity theft and offer victims aid and education.

"People focus internally: 'How could I have done this?' 'How could I fall for that?' It's especially hard to recover emotionally from that," Terry says.

Even though many victims are depressed, weepy, ashamed and embarrassed — "almost like sexual assault survivors — financial crimes in general are treated as less severe than physical and sexual crimes," DeLiema says.

One suggestion for victims of physical and sexual crimes can also help those who have had data or funds stolen: Take back your agency. Though nuts-and-bolts advice such as "freeze your credit" and "file a police report" is more about doing than feeling, "there's empowerment in taking those protective actions. It's helpful," says Terry.

Second, "recognize and accept your fears, apprehensions and frustrations," advises the Georgia Attorney General's Consumer Protection Division. "Remember, no one deserves to be a victim of identity theft."

Third, consider finding someone to talk with about all this. Friends and family may be good for a bit, but anything serious might require a professional.

So far, few services exist to help most victims with the emotional aspects of fraud. Romance scams are one exception, DeLiema says. Romance and investment scams prey on victims over the long term, "often feeding some unmet need in the person — feeling wanted or needed, a sense of purpose, a personal connection.

"These criminals might be talking to or texting the victim three to five times a day," DeLiema adds. "If you pull the victim away, forcing them to 'break up' with someone they have this deep connection with, you have to offer them something to replace that. The scammers are providing more emotional connection than their family is" — even though the purported "fiancée," "animal rescue worker" or whatever may actually be a computer or call center overseas.

Thus the usefulness of peer support or one-on-one counseling. "We need similar models [of support groups] for other types of rip-offs and fraud because the effects can be lasting," DeLiema says. General fraud helplines, clinical counseling or the resources below may help.

Suppose you're looking after a parent or other relative whose identity is stolen or account tapped by a cyberthief. You may feel the burden of having to clean up the mess — plus some blame for any mistakes the victim made, plus your own guilt for blaming the victim.

Blame is why many victims don't report financial fraud, writes Washington Post financial columnist Michelle Singletary: "They are rightfully concerned that they will be judged for 'allowing' themselves to be scammed."

But both caller ID and voices can be faked, and as Terry emphasizes, fraudsters make a business of sophisticated manipulation.

"Always start from the position that [your relative was] a crime victim, not a willing participant," Singletary writes. "How you respond to someone who has been the victim of a crime can either help them heal or push them to retreat in silence."

Terry says "the key is to give a lot of grace and to focus on recovering what's lost, including peace of mind and confidence." DeLiema finds it helpful to tell victims of these crimes "I'm so sorry this happened to you" and "I'll work with you to fix things."

Once our passwords were stronger, our credit was frozen, police reports were made and the thieves stopped talking our banks into mailing them "replacement" credit cards, I stopped telling friends and neighbors I was going to track these guys down and wring their necks. Taking precautions made me more secure, but I haven't forgotten the trauma.

Fran Shepherd took the recommended steps, too, but "it's always in the back of my mind. I worry," she says. "Time has helped. It hasn't happened since. I guess you just have to be vigilant all the time."

It's a good takeaway. "Just like with any negative life experience, you can get past this," DeLiema says. Even people who lost their life savings: "They've said it took time to come to terms with this, but peer support helped them regain their self-image and self-worth. Humans are incredibly resilient."