In the world of finance, we often talk about various kinds of risks: market risk, credit risk, operational risk, and so forth. However, today I'd like to take a moment to discuss a risk that's less spoken about in our circles but has grave financial implications: the Romance Scam.

According to the Federal Trade Commission, scams cost Americans over $8.8 billion dollars. What do you need to know and what are the simple steps that you can do to protect yourself?

How are people falling for these scams at such an alarming rate?

Well folks, I sure hope you're buckled up because we're diving deep into this today. Firstly, let me tell ya, we should never underestimate the power of scams. See, scam artists are a cunning bunch. Their craft is ancient, and they've honed their skills to certain perfection.

Take my mother-in-law, for example - she's a retired CPA, her specialty was being an auditor...ie her job was to catch the people stealing. She lives and breathes numbers...But even she fell victim for a romance scam!

What is a Romance Scam A romance scam is a deceptive practice where fraudsters feign romantic intentions towards a victim, gaining their affection and trust, only to exploit them financially. It's like buying a bond that promises great returns, but instead of yielding profits, it erodes your principal.

How does it work?

The Introduction: Just as you'd be introduced to a new investment opportunity, the scam often begins on dating websites or social networking platforms. The scammer creates a fake profile, akin to a glossy investment brochure full of misleading information.

Building Trust: Once contact is made, they'll work diligently to earn your trust. It's akin to those investment seminars where they wine and dine you, presenting rosy projections. Only, in this case, they're selling a fake future, not stocks.

The Ask: Once they believe they've got your trust, the scammer will concoct a financial emergency. It might be a sudden medical bill, a business opportunity, or even a chance to meet in person. The stories are as varied as they are heartbreaking.

The Loss: Victims, believing they are helping a loved one or a future partner, transfer the money. Sadly, this "investment" will never yield returns, and often, the scammer disappears, leaving the victim both heartbroken and financially damaged.

Why People Fall Prey to Scammers We gotta rewire our thinking here. These ain't your average Joe con artists, you know. This isn't the old Sting movie we're talking about. Gone are the days when scams were conducted by individual con artists. Today, scams are backed by organized syndicates, some with hundreds of employees and vast resources. It's almost like a formalized industry, and they're incredibly good at what they do.

These scammers are full-on illicit corporations, hundreds of people, and would you believe it...even governments, like North Korea, raking in money by the truckload from scams. Their sole mission: to make you part ways with your hard-earned cash.

See these scammers, they are smart and sophisticated, they’re not running up to you and saying, "Hey, hand me a hundred bucks, and it's gonna magically turn into two hundred!". Nope, they’re subtler than that. They got their ways, their tricks to make everything look legit, to make you feel like you're making a rational choice. That’s the catch right there!

These scammers, they know our brains better than we do, quite literally. Over time, our brains are hardwired to function a certain way. We've been taught to trust, to make connections, to believe in the good. The scam artists, they leverage this predisposition to their advantage. They manipulate us into a place where we believe that we are not being scammed. Clever, right?

How to Spot a Scammer So, I hear you asking, Leibel, how do we spot these scams? My friend, there are two ways these vultures operate.

The first one, they come at you with something that looks familiar. Might even look like it belongs to your daily grind. You’re minding your own business, then bam! An email from your company's head honcho asking to foot a bill lands in your inbox. Feels legit, right? Until your money ends up lining their pockets instead of your vendor's.

They’ll make you believe that it isn't a scam. For example, the latest scam is to send an email from your bank or saying there's been a fraudulent transaction and they want to refund you money, or confirm. You hit the link and bam...they have instant access to your accounts. Or worse yet, they install malware and connect to your computer after-hours, logging in to your saved accounts, banks and stealing all your valuable information.

So folks, here's the one thing you’ve got to remember - always be skeptical. Get an unrecognizable charge on your credit card? Dispute it! An email that rubs you the wrong way? Ignore it! Always remember, if you call the number in that email, you're falling right into their trap.

The point is, these scams bank on us letting our guards down. They look just like something we'd expect, and we end up taking actions that under normal conditions seem perfectly fine...but when initiated by them cause us a world of pain.

How Your Advisor Can Protect You A good financial advisor is really the first line of defense, we're like your friendly neighborhood watch, keeping an eagle eye on your hard-earned bucks. Now, I'm not one to toot my own horn, but we've got the experience, we've got the know-how. We don't just sit around crunching numbers and planning budgets all day. No, no. We're all about building that trust, becoming your go-to confidants. We'll be there, playing the devil's advocate if we ever sense you’re walking into what could be a bad situation.

And folks, trust me when I say, you want us in your corner. You'd be surprised how quickly these scams can suck you in faster than a whirlpool. And the scary part? They'll do it right under your nose, right when you think you’ve got full control.

So, you got a phone call from a prince promising you millions? Or maybe a new investment scheme with unbelievable returns? Or a lover who need help buying a plane ticket..or a pen-pal that's found themselves in a financial pinch. Look, before you shell out a single dime, do us both a favor, pick up that phone and give your trusty advisor a call. Let's make sure that aroma of get-rich-quick doesn't turn into the stench of a scam, huh?

Remember, my friends, even the smartest, most tech-savvy folks can get roped in by these vultures. So, let's stay vigilant, let's stay sharp, and above all, let's keep that hard-earned money where it belongs – funding your dreams, not a scammer's.

So sit back, relax, and let your financial advisor do the worrying for you. After all, we're here to make sure your journey to financial freedom doesn't get derailed by some low-down dirty scam.

If you think you've been a victim of a financial scam call your local PD, call the FBI, and visit AARP's Fraud Watch Network. https://www.aarp.org/money/scams-fraud/about-fraud-watch-network/