The New Face of Financial Fraud
It started with a connection request on LinkedIn.
A 75-year-old chemical engineer—we’ll call him Bob—received a request from a woman who said she was impressed by his profile. Her profile picture showed a young woman posing beside flowers, and at the time, it seemed like a polite and harmless exchange.
Then it became more personal. The woman said her name was Violaine Chen, and she lived in San Francisco and worked for a wealthy uncle. She sent photos of fine restaurants, designer clothes, and a luxury car. There were good morning notes, late-night exchanges, investing discussions, and increasingly romantic plans.
Eventually, she described a life they could build together, including an RV trip to California and a small house near Los Angeles.
Then came the money.
At first, “Violaine” guided Bob through a small investment on what appeared to be a trading platform. The early withdrawal worked, which made the platform seem real. Bob was no novice to investing, and he was also mentally sharp, according to his son. He worked full time, had built up a nice retirement fund, and lived what many would consider a stable, responsible life.
But over time, the deposits grew larger. Bob started to sell stocks and mutual funds, he increased bank transfer limits, and he continued sending money even after bank employees warned him the transactions had the markings of fraud.
When he tried to withdraw what he believed was roughly $700,000 from the account, the platform blocked him. Customer service said his account was frozen and demanded additional payments to release the funds. By then, he had sent more than $716,000, which was virtually everything he had.
Unfortunately, Bob’s story is not an anomaly. It is happening every day.
Financial scams have evolved dramatically over the past several years. What once looked like obvious spam emails or suspicious phone calls has become something far more sophisticated, emotionally manipulative, and technologically convincing.
Consider these statistics:
According to the Federal Trade Commission, consumers reported losing more than $1.16 billion to romance scams in just the first nine months of 2025 alone.
In the third quarter of 2025, more than 11,200 people reported losses tied specifically to romance scams, with total reported losses approaching $400 million during that three-month period.
The median reported loss exceeded $2,200 per victim, though many losses were far larger.
Adults age 60 and older reported losing approximately $2.4 billion to various scams in 2024, up dramatically from roughly $600 million in 2020.
According to the FTC, older adults were nearly twice as likely as younger adults to report six-figure fraud losses.
Financial scams are not succeeding because victims are unintelligent or financially irresponsible. In many cases like Bob’s above, the opposite is true.
The reason is that modern fraud operations increasingly resemble professional organizations. Experts describe highly organized overseas scam centers operating with scripts, escalation teams, performance metrics, and increasingly advanced technological capabilities. Some reportedly involve dozens or even hundreds of workers communicating with potential victims around the clock.
The most effective fraud attempts are emotional before they are financial. They attempt to build trust, or to create urgency, intimacy, fear, or isolation strong enough to temporarily override skepticism and critical thinking.
In romance scams, perpetrators may spend months building emotional relationships before requesting money. In tax scams, fraudsters impersonate government agencies and threaten legal action or arrest unless immediate payment is made. Investment scams often create fear of missing out around supposedly exclusive opportunities involving cryptocurrency, artificial intelligence, or private investments.
Earlier this year, the FTC warned of a surge in tax-related scams involving callers impersonating IRS agents or fabricated “tax resolution departments.” Many victims reported that callers already possessed partial Social Security numbers, home addresses, or other personal details obtained through prior data breaches or online sources, lending false credibility to the scheme. The victim is told they must act immediately, but the pressure is very intentional. Emotional urgency narrows decision-making and discourages verification.
Most legitimate financial institutions, government agencies, and professional organizations do not demand immediate payment through cryptocurrency, gift cards, wire transfers, or obscure payment apps. The IRS does not initiate contact through text messages or social media. Banks do not ask clients to move funds urgently to “protect” accounts without extensive verification procedures. And legitimate investment opportunities rarely depend on secrecy or immediate action.
In many cases, simply pausing the conversation and independently verifying the request can prevent enormous financial damage. Calling a known phone number directly, consulting a trusted family member, or discussing the situation with a financial professional can provide perspective that is often difficult to maintain in emotionally charged moments.
Protecting personal financial information has also become increasingly important as mail theft, phishing attempts, and account takeover efforts continue rising.
In response to these evolving threats, our custodian, LPL Financial, will soon introduce updated Account View security and delivery preference enhancements. Clients will be prompted to review updated Terms & Conditions and delivery settings, with eDelivery becoming the default option for account communications.
We strongly encourage clients to utilize secure electronic delivery whenever possible. Accessing financial documents through authenticated digital channels can help reduce exposure to physical mail theft while providing faster and more centralized access to important account information.
In Conclusion
Our goal here is not to make clients fearful of every message, phone call, or online interaction. It is to remind readers that financial fraud has become more sophisticated, more personal, and more difficult to detect than it was even a few years ago.
The best defense is often a simple process: pause, verify, and involve someone you trust before moving money or sharing sensitive information. That may mean speaking with a family member, contacting a known institution directly, calling us, or simply taking time to step away from the urgency of the moment.
As scams continue to evolve, we will also continue monitoring the latest forms of financial fraud and periodically updating clients on new risks, warning signs, and practical steps to help protect their financial lives.
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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. This material was produced for Kari Skedsvold’s use. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
Investing involves risk including loss of principal. No strategy assures success or protects against loss.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.