Ambrose said the communications between the client and the scammer, which takes place on sites such as Facebook and Words with Friends, may go on for weeks or months before the scammer manufactures a crisis. The relationships sometimes are clearly romantic, and some are more about companionship, she said.
Advisors, Ambrose said, are put in a difficult situation when a client gets caught up in a romance scam because clients are usually manipulated by scammers to not trust their advisors. “The scammers are so good at the emotional manipulation, and they really do isolate their victims and coach them on what to say,” she said. “What they do is coach our clients to lie to us about these scams.”
She said an advisor usually won't think anything when a client wants to use assets for a home repair. “But when they come back very quickly for another big amount or even larger amount and that pattern starts to emerge … then the advisor will say ‘this doesn’t seem right.’”
Sometimes the client will slip or talk about that person they met. “But often in these scams, it’s not until a pattern emerges that we really see that something is wrong and when we question them, they finally tell us what is going on,” Ambrose said.
In educating advisors on how to protect their clients, Ambrose offers her top three tips:
• Know your clients and their withdrawal spending habits. Advisors, she said, must be on the lookout for large unplanned withdrawal for something like a home repair or paying off debt, followed by another request for a larger amount two to four weeks later with a new explanation.
• Don’t be afraid to ask what the money is for, and if they are planning any more withdrawals. Clients, she said, are coached to lie to their advisor and to take their money to their local bank to avoid scrutiny. “It is okay to express concern and ask questions—even telling your client about the prevalence of fraud and scams and you just want to help protect them.”
• Make sure the client has a trusted contact on file. Ambrose said trusted contacts are critical for intervention with fraud and exploitation, especially with seniors and vulnerable clients.