June 25, 2024

There are numerous stories of the innocent, such as credulous grannies or job seekers, getting defrauded online. However, one high-profile person’s story stands out. Andy Cohen, CNN’s New Year night host and “Real Housewives” executive producer, experienced such misfortune when he was tricked into losing plenty of cash from his bank account.

Andy lost his debit card one day. Then, he received an email that appeared to be from his bank’s fraud department. He soon found out that cyber criminals had fooled him and made off with his money through wire transfers from his bank accounts. He said that once the money is wired, it’s gone for good.

![Andy Cohen and Anderson Cooper speak onstage during the Times Square New Year’s Eve 2024 Celebration on Dec. 31, 2023 in New York City. (Photo by Noam Galai/Getty Images)](https://investmentshoax.com/wp-content/uploads/2024/05/72194560007-gty-1898866044.jpg)

## Impersonation scams: A growing menace

Andy shared his experience of falling victim to an intricate banking scam on his podcast, “Daddy Diaries,” and on the “Today” show. Unless we tighten security measures and become cautious about responses to seemingly genuine emails, texts, and calls, such scams will continue to rise.

Impersonation scams ranked second among fraud cases reported by consumers in 2022. Consumers reportedly lost close to [$311 million via wire transfer in 2022](https://www.ftc.gov/system/files/ftc_gov/pdf/CSN-Data-Book-2022.pdf) and $1.587 billion via bank transfers or payments. In comparison, the amount lost via gift cards was $228 million.

A year ago, I warned about scammers impersonating bank personnel to empty your savings. Increasing incidents of fraud expose weaknesses in the financial system that criminals can easily exploit.

## Scammers implement urgency to outsmart victims

We tend to respond quickly when alerted about issues with our bank accounts. This impulsive nature plays into the hands of the scammers. Andy acted hastily because he recently reported his debit card lost, so the email appeared authentic.

Upon reflecting on the incident, he wondered whether previous warning texts about peculiar bank activities were genuine.

## Recognizing the telltale signs of scams

Andy is used to dealing with unpredictable circumstances, but even he was deceived by someone pretending to be from his bank. The scheme’s success owes largely to cybercriminals’ ability to mask their identities as established institutions.

Andy admitted that he did not scrutinize the sender’s fake email address that appeared to be from his bank. He clicked on the link, which led him to inadvertently granting the fraudsters access to his bank accounts.

![Celebrity Andy Cohen attends iHeartRadio z100’s Jingle Ball 2023 (Photo by Manny Carabel/Getty Images for iHeartRadio)](https://investmentshoax.com/wp-content/uploads/2024/05/72194559007-gty-1841426130.jpg)

Andy noticed a red flag when the scammers requested his Apple ID and password, following which he severed communication. He advises being cautious to avoid such scams during his [“Today” show appearance](https://www.today.com/video/andy-cohen-recounts-ordeal-of-losing-money-in-elaborate-scam-201669701981).

## FAQ

### Why are banking scams on the rise?

Banking scams are increasing because of growing digital transactions and associated security loopholes. Scammers exploit these gaps and orchestrate intricate frauds that often appear legitimate, fooling even the most cautious individuals.

### What measures can individuals take to avoid falling victim to such scams?

To avoid scams, don’t click on unverified links or share confidential data online. Take time to verify the authenticity of an email sender or caller, especially if they request urgent action. Report misleading emails to your bank and never share your banking credentials with anyone.

### How can the financial system enhance its security to prevent such scams?

Banks need to enforce robust two-factor authentication, monitor accounts for suspicious activities, implement advanced encryption methods and educate customers about possible scams. Technologies such as biometrics, artificial intelligence, and machine learning can significantly enhance fraud prevention.Celebrity figure Andy Cohen got caught in a sophisticated scam conducted by fraudsters posing as his bank employees. The scammers contacted him, expressing concern about fraudulent activity on his credit card. Being authentic-sounding, they succeeded to gain his trust.

They fooled him by recounting fake transactions, as well as some legitimate ones. Cohen confirmed these purchases, giving hackers effective control over his accounts. The scammers then asked him for codes his bank had texted him, ostensibly for authorization of money transfers.

Cohen undergoing, what he thought was, a transaction verification process, inadvertently gave the fraudsters the access codes. An identification system he overlooked arose when the fraudsters requested to forward calls from his bank. These calls warned of sizable money wires, a clear red flag.

Once victim to the scam, he identified it but by then the money was already transferred. In this con, Cohen became one of many falling prey to tech-savvy heists globally. He advised the public not to trust unsolicited calls.

Sophisticated scams are increasingly becoming standard, with texts and calls falsely claiming to be from trusted entities, like banks, or IRS. One essential rule is to never relay any personal codes or information to unknown callers. Remember, scams aren’t just about wire transfers, they often involve phishing attempts via Cash Apps, PayPal or other popular services.

The scams vary highly, sometimes falsely claiming debit card loss, seeking verification of banking details, or access to your phone. These deceptive practices highlight the need for increased vigilance and consumer protection in banking regulation. Unlike consumer protections for credit card fraudulent charges, bank account transactions authorized by deceived customers rarely get refunded.

A new form of regulations comes from Zelle, who recently required bank participants to return customer money lost to ‘qualifying imposter scams’. This includes instances where fraudsters convincingly portray themselves as trusted entities, like a bank. However, the details of the new regulation remain concealed to prevent scammer adaptation.


**What was the scam conducted on Andy Cohen?**
Cohen was targeted by fraudsters pretending to be bank employees, warning him about fraudulent activity on his credit card. They then presented a mix of fake and legitimate transactions, winning his trust, and acquiring the codes needed to authorize wire transfers.

**What pointers to avoid falling for such scams?**
Never share personal information or authorization codes over the phone, especially when contacted via unsolicited calls. Treat any unexpected request as a red flag. Always verify the caller by independently reaching out to the institution they claim to represent.

**What are the protections for such scams?**
Regulations and consumer protections on such scams vary by bank and geography. Some private banks and services like Zelle have introduced requirements for associated banks to reimburse customers for losses from ‘qualifying imposter scams’, but the specifics are often case-dependent.
Zelle, the peer-to-peer payment platform, has reportedly amended its policy in late June to offer refunds to customers who fall victim to scams on the platform. Even if you are not a Zelle user, you can still fall prey to scams associated with it as the platform is available to any banking customer who has a checking or bank account.

“Yo don’t need to have the app to make transactions with Zelle”, says Jennifer Murray, a financial advisor. The problem lies in the fact that many choose to ignore the potential risks associated with Zelle simply because they don’t use it, unaware that once hackers gain unauthorized access to their bank account, they can initiate transactions without their knowledge.

Often, consumers are deceived into revealing their two-factor authentication number, allowing fraudsters to get into their bank accounts and carry out fraudulent activities.

According to Lauren Saunders from the National Consumer Law Center, the alterations made by Zelle are praiseworthy and other payment systems should take the same measures to further protect their users from malicious activities. As of today, the federal law offers protection to peer-to-peer payment apps against unauthorized transfers. Zelle, by implementing these recent changes, has extended this protection shield to cover certain fraud-induced transfers.

Despite these measures, Saunders believes there is still room for improvement. “Banks and payment companies need to assume responsibility for the fraud they let into their systems”, she said.

In terms of wire transfers, consumer protection is still at a disadvantage. Saunders further explains that wire transfers are exempt from being governed by the federal Electronic Fund Transfer Act, making them susceptible to loopholes and ambiguity, and subsequent denial of reimbursement by the banks. Consistent progress is imperative to make the virtual payment platforms safer and more reliable for users.

##### Frequently Asked Questions
**Q1: What is Zelle’s new policy on refunds to scam victims?**
Zelle has recently amended its policy to offer to reimburse its users who have been conned on the platform. This is a considerable step forward in safeguarding consumer’s funds and maintaining trust.

**Q2: How can non-Zelle users be defrauded?**
Even those who don’t use Zelle can become victims of associated scams. If a bad actor gains access to a person’s bank account information, they can carry out transactions via Zelle without the account holder knowing it.

**Q3: Why is there a need for stronger protection measures?**
Despite federal laws and recent policy changes by Zelle, consumers remain exposed to potential fraud. Effective and enforceable rules need to be implemented which obligate banks and payment companies to tackle the fraud that infiltrates their systems. Furthermore, wire transfers, which currently aren’t robustly protected, need to be subjected to stronger regulations to minimize instances of fraud.