• This Is How to Avoid Being Scammed (Erik Barker)
• Anatomy of a Con Artist (Book)
• Small-Town $95 Million Ponzi Scheme
• What is the ACAT System
• How to Protect Your Personal Information
• FBIs Internet Complaint Crime Center
• FTC Fraud Report
• SEC Scam Report
• FINRA File a Complaint

Three years ago, I shared the story of my late grandfather falling victim to the infamous “Grandparent Scam.”

In 2023, I highlighted a telemarketing scheme that’s still operating today — one where real people raise money for legitimate charities, but only a small percentage of the donations go to the actual cause—most of it ends up in the pockets of the organization’s executives.

Then last year, I told the story of a couple who, while in the process of interviewing our firm, lost nearly $2 million — almost their entire nest egg — to an online investment scam. Unfortunately, these stories aren’t slowing down. In fact, in 2024 alone, Americans lost a record $16 billion to scams — with investment scams accounting for nearly 40% of those losses.

The trend is moving in the wrong direction. So today, in an effort to continue doing my part to help protect the Stay Wealthy community, I’m sharing a recent story passed along by one of our amazing clients, Pam from Chicago.

Along with it, I’ll walk through eight warning signs that could indicate you’re being conned. Whether you’re worried about yourself or someone you love, these insights could help you spot red flags early — and avoid becoming another statistic in this growing, multi-billion-dollar criminal industry.

Welcome to another episode of the Stay Wealthy Retirement Show. I’m your host, Taylor Schulte, and every week I cover the most important financial topics to help you “stay wealthy” in retirement. Ok, onto today’s episode.

8 Red Flags You’re About to Get Scammed (And Real Stories That Prove It)

When everyone knows everyone, and reputations are built over generations, it’s easy to believe that your neighbor would never betray you. That’s exactly what happened in Hamilton, New York, a small charming college town of about 6,400 people near Colgate University. And for decades, Miles “Burt” Marshall was the go-to financial guy in town. He prepared taxes, sold insurance, and beginning in the 1980s, he started accepting investment dollars from local residents to supposedly buy and maintain rental properties.

The locals eventually coined it the “8% Fund” – a real estate investment that guaranteed 8% annual returns. The arrangement was simple, arguably too simple: investors would give Burt their money and receive promissory notes in return. They could make withdrawals from their investment with 30 days’ notice or choose to receive regular interest payments at the guaranteed 8% rate.

And for many years, Marshall made good on his promises. He paid the interest and processed withdrawals as they were requested. As word spread about this seemingly foolproof investment opportunity, more people joined in. One investor, Dennis Sullivan, described how it spread through his own family: first his parents invested, then he did, then his fiancée, then his fiancée’s daughter, then his son, and even his snowmobile club.

“Everybody gets snowballed into it,” Dennis told U.S. News.

It’s worth noting that when Marshall started this operation in the 1980s, an 8% return wasn’t anything remarkable. In fact, the average treasury bill yield for that decade was around 10%. But as interest rates dropped over the following decades, that guaranteed 8% return became increasingly attractive – and also increasingly suspicious to anyone looking closely at the numbers.

The house of cards finally collapsed in 2023. Marshall filed for bankruptcy protection, owing nearly 1,000 people and organizations approximately $95 million. And earlier this summer, at 73 years old, Burt Marshall was indicted on charges that his investment business was nothing more than an elaborate Ponzi scheme, one where he was using new investment money to pay off previous investors to try and keep the scam going. While the total losses fall short of Bernie Madoff’s multibillion-dollar scam, they are incredibly large by most other measures, and especially large in this small college town.

And no, the victims weren’t ultra wealthy investors who could absorb the loss – they were professors, office workers, and retirees—everyyday people who lost their life savings, or a large percentage of it. Christine Corrigan and her husband, who own a restaurant 30 miles east of Hamilton, were owed about $1.5 million dollars.

As Christine told US News:

“He would tell you about all the other people that invest…Churches invest. Fire companies invest. Doctors invest. So you’d think, ‘Well, they’re smart people. They wouldn’t be doing this if it wasn’t okay to do… Why are you going to be the suspicious one?'”

The ripple effects of these losses have been devastating throughout the community. And, unfortunately, while Burt Marshall’s assets were sold through the bankruptcy proceedings, investors only stand to recoup about 5 ½ cents for every dollar they invested. The bankruptcy trustee is currently pursuing additional claims against financial institutions to try and make investors whole (or close to it), but the reality is that most of this money is simply gone.

Before I share the eight red flags that could indicate you’re being conned, let’s quickly summarize what we can learn from this tragic story. Even if they sound like no-brainers, they serve as important reminders to all of us.

First, if an investment opportunity sounds too good to be true, it probably is. In today’s lower interest rate environment, any guaranteed return above short term Treasury Bill rates should immediately raise red flags. And this applies not just to potential scams, but also deceptive investment and insurance products marketed by reputable organizations. I recently shared an example of an advertisement from a company we all know by name with out clients that said “grow your retirement savings with NO RISK of market loss” and in the largest boldest font, front and center, “earn up to 9%.” If it sounds too good to be true, it probably is, and in this case, it absolutely was.

Second, be wary of investment opportunities that lack transparency and proper documentation. Real investments are held with regulated financial institutions and come with regular statements and a detailed prospectus – not self-generated promissory notes.

Lastly, trust but verify. No matter how well-respected someone is in your community, or how many of your friends and family members vouch for them, always do your own due diligence before making an investment.

The story of Burt Marshall is a painful reminder that financial fraud doesn’t always come dressed in designer suits or from faceless corporations. Sometimes, it looks like the neighbor you trust, your accountant, or a respected business owner who’s been part of your community for decades.

As one victim put it: “You look at life differently after this happens. It’s like, ‘Who do you trust?’” And that question — who do you trust — is where the real lesson begins.

Because behind every scam, there’s not just deception, but human psychology. And understanding that psychology is what can truly protect you moving forward. 8 critical warning signs that experts say could indicate you’re being conned.

On that note, to set the stage for the 8 critical warning signs that could indicate you’re being conned, I want to share an important truth: falling for a con doesn’t mean you’re careless, stupid, or gullible—it means you’re human. Scammers are experts at manipulating emotion, urgency, and trust. And the better you understand those tactics, the harder it becomes for anyone to use them against you. Contrary to what many assume, it’s widely documented that con artists don’t seek out unintelligent people—they seek out feeling people. Those who are hopeful. Those who are under pressure. Those who believe in fairness or goodwill.

In other words, they prey on emotional vulnerability, not intellectual weakness. Which is why one of the most dangerous beliefs you can have is that you’re immune—because confidence is exactly what scammers exploit. As Johnathan Walton, who lost nearly $100,000 to a sophisticated scam, put it: a con is essentially a “consensual hallucination” between someone telling a lie and someone who desperately wants to believe it. With that, let’s go ahead and unpack the eight red flags that could indicate you’re being conned.

These red flags come from Erik Barker’s wonderful article on the topic, and from Jonathan’s book, Anatomy of a Con Artist, both of which will be linked to on the show notes page for today’s episode. Ok, red flag #1 is the perfectly timed rescue (i.e., I’m here to help!).

Red Flag #1: The Perfectly Timed “Helper”

The FBI has a specific term for these people who somehow show up at precisely your moment of greatest need: they are referred to as “rescue merchants.” If someone appears out of nowhere with the exact solution to your problem, your internal alarm bells should start ringing. But here’s the challenge: when you’re stressed or desperate, your cognitive bandwidth shrinks. You’re focused on finding a fix, and everything else – like who this person is or whether their offer makes sense – gets pushed aside. The rescue merchant knows this and capitalizes on it. As Eric points out in his article, they’ll say things like, “I know exactly what you’re going through. I’ve been there myself. That’s why I created this program for people like us.” While it may feel like empathy, it’s not; it’s a sales tactic. And many times, people assume, “If someone wants to help me, they must be genuine.” But that’s not always the case—some people are simply skilled at appearing helpful. Now, to be fair, appearing helpful doesn’t automatically mean they’re a scammer. But if someone magically appears at the right time with the right solution to your problem, take a step back and be cautious.

Red Flag #2: Instant Intimacy

The second red flag is when someone new in your life is immediately and intensely thoughtful. They remember every detail you’ve mentioned, they’re extraordinarily attentive, and they make you feel special almost instantly. This of course feels wonderful – who doesn’t want to be seen and understood? But authentic relationships don’t develop at warp speed. Normal people gradually increase their support and investment as a relationship deepens over time. As Eric cleverly put it in his article, if someone’s moving too quickly with their kindness and generosity ,they’re not trying to get to know you; they’re trying to install malware in your soul. The point isn’t to doubt every act of kindness — it’s to be careful when things move too fast. People who rush to build a relationship often have another agenda.

Red Flag #3: The Overshare Trap

Building on number two, the third red flag to watch out for is when someone you’ve just met shares deeply personal information within minutes of meeting you. This isn’t a minor overshare, it’s a polished, emotional story that makes you feel instantly connected to them. And, in many cases, our natural response as humans is to reciprocate with our own personal confessions. As Erik put it, suddenly you feel like old friends. But you’re not. Oversharing creates a fast-track to intimacy. You think you’re bonding but really you’re just narrating your own downfall. And that’s because once you feel connected, you’re more likely to do favors, share information, or even send money when they inevitably ask. The big takeaway here is that real, genuine relationships develop gradually – they don’t explode into existence after one emotional conversation.

Red Flag #4: The Generosity Setup

This next warning sign, red flag #4, is extra crafty because it seems to contradict everything we would expect from a scammer. Erik calls this “Beak Wetting,” like to wet ones beak, or cut a bribe. As it relates to scams, this happens when a con artist gives you something of value – sometimes money – shortly after meeting you. This strategic act of generosity is designed to convince you they couldn’t possibly be trying to scam you. After all, if they were trying to take advantage, why would they give you money? As Erik says, “They’re not giving you money; they’re buying your trust at a discount. It’s not generosity. It’s investment. And they are so ready for the return.” If someone has been kind to you three days in a row, you might naturally assume the fourth day will be similar. Con artists exploit this psychological tendency. By giving you a small amount upfront, they’re setting the stage to take much more later.

Red Flag #5: Constant Chaos

The fifth red flag is when someone’s life feels like a never-ending soap opera. There’s always chaos. Always a new crisis. And somehow, they are always the victim. Their coworker is jealous. Their neighbor’s spreading rumors. Their “business partner” disappeared with the funds. And now they just need a little help—until things calm down. At this point, logic is often thrown out the window. You’re emotionally invested and defending the story you’ve been told: that you’re the one person they can trust in a world that keeps wronging them. But chaos is a tactic. It keeps you distracted, sympathetic, and too tired to see the pattern. Yes, bad streaks happen, but if someone’s life is a revolving door of crises with a new villain every week, you’re probably not witnessing misfortune. As Erik put it, you’re watching a production, and your role is “Gullible Mark #14.” And the next warning sign is what helps them finalize the scam.

Red Flag #6: Manufactured Urgency

Red Flag #6 is “Scarcity”—a manufactured sense of urgency designed to make you move before you think. It might sound like: “The window’s closing.” “Only a few people get access.” “Decide today or it’s gone forever.” Scarcity flips a switch in your brain. It shifts you from reasoning to reacting. All of a sudden you’re not evaluating, you’re racing the clock, afraid of being left behind. While urgency is a standard sales tactic, it’s also a con artist’s favorite weapon. The ticking clock, the final call before the offer ends, the “exclusive” seat—none of it’s about opportunity, it’s about control. And while some legitimate offers are time-sensitive, true opportunities should be able to withstand patience. So when someone tells you to act fast, that should be your cue to slow down.

Red Flag #7: Isolation Tactics

And because skilled con artists know you might slow down long enough to talk with someone you trust before acting, they’ll often work to cut off that lifeline. Red flag #7 is isolation. You’ll hear things like, “Let’s keep this between us.” “Don’t tell your financial advisor yet.” “Other people won’t understand it.” If you hear phrases like these, alarm bells should be ringing. Because what they really mean is: “This falls apart the moment someone else asks a single question.” Scammers often call your friends “naysayers,” claim your spouse is “too cautious,” or say your advisor “doesn’t think big enough.” The goal is to make you feel like you’re the only one who truly “sees it.” As Erik notes, “This is Con Artist 101: separate the mark from the herd. They need you in a vacuum where their nonsense doesn’t echo against anything harder than your own desperate hope.” If this so-called “opportunity” can’t survive a coffee chat with a friend, it’s already dead on arrival. So if anyone tells you not to run it by your spouse or your accountant or your attorney, that’s your cue to do exactly that. Because the one thing every scam can’t survive is scrutiny. In fact, finally talking to a family member is what ultimately helped us retrieve the envelope of cash my grandfather dropped off at the post office when he fell victim to the grandparents scam years ago.

Red Flag #8: The Wire Transfer Rule

Ok, the final red flag is perhaps the most concrete: and that is, being asked to send money via wire transfer. Here’s a basic rule of financial survival: Never. Send. Wires. Why do scammers love them? Because they’re instant and irreversible. The moment you hit “send,” your money is gone. Only in very rare circumstances, and only when it’s immediately reported, does the money have a chance at being recovered. As Johnathan writes in his book, Anatomy of a Con Artist, “In nearly every con artist case that I have investigated, when a large sum of money changed hands, it was usually through a bank wire.” Yes, there are legitimate uses for wiring money – like buying a house or a business, for instance. But for most everyday transactions, a request for a wire transfer should be seen as a massive red flag.

And to avoid any confusion, when you hire a new financial advisor and move investment accounts to a new financial institution, you aren’t wiring money to process the transaction. Advisory firms like mine use trusted custodians like Fidelity and Schwab to transfer money through the Automated Customer Account Transfer system. This system has multiple layers of industry safeguards and SIPC insurance to protect customers during the transfer process. To learn more, you can contact your advisor or the financial institutions you are moving money between. And if any of them ever ask you to wire them money outside the ACAT system to fund your new accounts, start asking questions and talk to your trusted advisors, friends, and family members in your life before taking action.

Bottom Line

Ok, I hope today’s episode was helpful. And I hope it’s clear that it’s not stupidity that makes us all vulnerable to scams. We’re vulnerable to scams because we’re human, because we want things to get better. Maybe we’re hopeful. Maybe we’re tired. Maybe we think we’ve earned a break. That’s what scammers feed on—not ignorance or foolishness, but hunger. The real danger is thinking you’re immune, that you’re too smart to fall for it. That’s the trap. Because, as Erik wisely puts it, “It’s not just about being vigilant—It’s about being honest with yourself. That, avoiding con artists isn’t about memorizing signs—it’s about recognizing yourself in the con. You think conning is about lying. It isn’t. Conning is about giving you permission to believe what you already want to be true.”

If you think you’ve been scammed, don’t let shame keep you from taking action. Start by immediately contacting your financial institution to report any unauthorized charges and freeze your accounts if necessary. If you paid through a wire transfer, gift card, or peer-to-peer app, reach out to those services immediately to try to reverse the payment. Then, file a report with the FBI’s Internet Crime Complaint Center and the Federal Trade Commission. You can also notify your state attorney general’s office and local police to document the incident, and if investment or financial products were involved, contact the SEC or FINRA. Finally, update your passwords across all financial and communication accounts to protect your personal information and limit further damage.

I’ll link to all of these resources and the others mentioned in this episodes show notes, which again can be found by going to youstaywealthy.com/256. Thank you for listening, stay safe, and stay wealthy.

Disclaimer

This podcast is for informational and entertainment purposes only, and should not be relied upon as a basis for investment decisions. This podcast is not engaged in rendering legal, financial, or other professional services.