Beau Friedlander:
Adam.
Adam Levin:
Travis, I’m glad you started this because boy, do I have stuff to talk to you about Beau.
Beau Friedlander:
Oh really?
Adam Levin:
Yeah.
Beau Friedlander:
Tell me Adam.
Adam Levin:
Wait a minute. That voice sounded a little higher than Travis’s voice now.
Beau Friedlander:
No.
Travis Taylor:
No, this is Beau. I’m right here.
Adam Levin:
Hi.
Beau Friedlander:
If that’s Beau, what’s the name of your bear?
Travis Taylor:
I think it’s Kenneth.
Beau Friedlander:
Oh, okay. Cool.
Adam Levin:
I’m so confused.
Beau Friedlander:
Well, last week I said, if you have your personal information out there, you’re probably going to get hacked. It’s almost as irresistible as the coronavirus, COVID 19, which two days later I got. So I guess that’s why I sound like this today. Hi, it’s Beau.
Travis Taylor:
Can we call it Beau-vid?
Beau Friedlander:
Beau-vid COVID.
Travis Taylor:
Yes.
Beau Friedlander:
I sent something to you, Travis just now. I got an email asking what manager they should use. I said, I’m not going to tell you a particular one, because if it goes wrong, I don’t want to have you come back to me and complain, but I will tell you some basic things. Which is, you should pay for it and you should read reviews before you choose.
Adam Levin:
And you should hire the manager for the Eagles. Oh, wrong manager.
Beau Friedlander:
So, I sent the email and I immediately got an EarthLink email saying, could you please hit this link and confirm your identity? Do you think that was a hack? Do you think that was a spear phishing email? Do you think somebody was actually listening to the show and asking a question about password managers?
Travis Taylor:
I think someone was listening to the show and actually asking a question about password managers. We’ve beaten that drum a few times. So I think it’s totally fair that someone want to write in and ask more.
Beau Friedlander:
I think that I’m right and Travis is wrong because if I were looking to hack somebody and I listened to this show, I’d be looking for some clever ways to do it to clone EarthLink’s verification system.
Adam Levin:
Did you say EarthLink link or Earthling link?
Beau Friedlander:
No, EarthLink. And that to me seems like a clever way to do it.
Travis Taylor:
Yeah. But the link in there went to an actual earthlink.net link. It wasn’t a spoof link or anything like that. And EarthLink as part of the services does have a spam protection thing that will block incoming or unrecognized email addresses.
Beau Friedlander:
All right. I might have COVID, but on your feet, buddy.
Travis Taylor:
Yeah.
Beau Friedlander:
Did you check that URL to see that there were no Russian alphabetic Cyrillic letters in there?
Travis Taylor:
I did.
Beau Friedlander:
You did? I don’t believe you.
Adam Levin:
And there was Yiddish. Oh my God.
Beau Friedlander:
And then the other question is, it would be if there were a Cyrillic character in there, what do you call that type, is it URL typo squatting, or how do you do that? What do you call that?
Travis Taylor:
Typo squatting is a good name for it.
Beau Friedlander:
Kind of typo squatting.
Travis Taylor:
Yeah.
Beau Friedlander:
So, if there had been, wouldn’t it be pretty easy for the link to go to a site that looked like EarthLink?
Travis Taylor:
You could, but I think one of the things, especially if you’re looking at a message on Gmail, the font that they use makes it look a lot more apparent. I think it’s ab Arial font by default, and so if you have something like a Cyrillic character replacing something, or if you are using zeros instead of Os, that font usually makes it pretty easy to confirm. Also if you mouse over the link, it’ll tell you whether the destination is. So if you get something in your email, you can say like this is CNN.com and it’s actually going to, I’m going to HackYou.ru Or something.
Beau Friedlander:
Wait, Travis. Do that again. This is CNN.com.
Travis Taylor:
This is CNN.com.
Beau Friedlander:
I think we’re going to lose Travis. They’re going to want his voice.
Adam Levin:
And why are we talking about like mice and Cyrillic pottery? What does that have to do-
Beau Friedlander:
Oh, so Cyrillic alphabet is the alphabet that a lot of languages are in the Eastern Europe are written in and they’re often used for typo squatting on URLs, which just means that they’ll take a Russian character, what we would call a Russian character, a Cyrillic character and that looks just like an English one and replace it in a URL.
Adam Levin:
So does that mean since Putin is a Russian character, we could get him replaced too?
Beau Friedlander:
Yeah. No disputing that Putin.
Travis Taylor:
I got nothing for that one.
Beau Friedlander:
I mean, that was pretty terrible, actually.
Adam Levin:
Welcome to What the Hack, the show about hackers, scammers, and the people they go after. I’m Adam, cyber starman.
Beau Friedlander:
I’m Beau, cyber horse.
Travis Taylor:
And I’m Travis, cyber sidekick.
Adam Levin:
And today we’re talking with one of America’s top consumer experts. He’s a contributing editor at checkbook.org and host of the podcast, Consumer Media. Please welcome television broadcaster and personality, the one, the only-
Travis Taylor:
Consumer man.
Adam Levin:
Herb Weisbaum.
Adam Levin:
So Herb with an unbelievably impressive resume like you have, and you really have been the consumer’s guardian and you and I have worked together for, golly way over 20 years, all the way back to the credit card reform act. And before that you’ve always stood up and that’s a pretty exciting thing about standing up. So the question is, how did you get into this business? How did you want to become the voice of the consumer? Was there something in your life, some mysterious part of your past that I don’t know about that brought you to where we are today?
Herb Weisbaum:
By the way, as I’m getting older, it’s harder and harder to stand up. I’m sure you know what I’m talking about. But people ask me that and I always tell this story. It’s not necessarily the reason, but it’s one of the things that I just look back on. When I was a teenager in King of Prussia, Pennsylvania and I was driving home from visiting my girlfriend, the car, my old car broke down. It was a Plymouth, Plymouth. They ran out of names so they called it a Plymouth, Plymouth. Do you recall that model? It was the first car with a push button on the dashboard instead of a stick or an automatic. You had to push buttons on the dashboard.
Adam Levin:
I remember that.
Beau Friedlander:
What year was the Plymouth, Plymouth?
Herb Weisbaum:
I think it was the 64 Plymouth, Plymouth if I’m not mistaken.
Beau Friedlander:
Gotcha.
Herb Weisbaum:
And so I’m along the side of the Pennsylvania turnpike and my dad comes gets me and tows me back to home and we take it to one of the famous auto transmission places. And the guy puts it up on a lift and he says, yeah, it’s going to cost like $400 to fix this thing. And back when I was 16 years old, that was a lot of money, $400. It’s a lot of money now, but it’s really a lot of money back then. And my father said, and I don’t know why he said this, is the Plymouth dealership is two more miles down the road and they’ve always been good to us. Why don’t we just tow it down there and get a second opinion?
Herb Weisbaum:
And we took it down to the Plymouth dealership, down the road and the guy puts it up on the lift, and a couple minutes later he says, okay, you’re good to go. It’s like what? He says, yeah, it was like a loose screw or something. We fixed it and everything’s good and have a nice day. And I was like, wow. I realized at that point in time that everybody wasn’t honest, that some people are out to make money off of you or to lie to you.
Herb Weisbaum:
I mean, I’m not saying that from there I became a consumer reporter, but I learned at a very young age that people don’t always tell the truth and don’t always do the right thing. And my father was a pharmacist in King of Prussia, and he taught me you always try to do the right thing. I remember him taking prescriptions to people on a snowstorm on a sled. He walked a couple of miles to deliver stuff to people. He was the first person to give people credit before there were even things like credit cards because he knew they’d or hoped they would pay their bills. So I just, at a very young age was taught that this was something, do the right thing, but that not everybody did the right thing.
Adam Levin:
Boy, are you right about that.
Beau Friedlander:
Who was the King of Prussia?
Herb Weisbaum:
The King of Prussia was the King of Prussia who came over in the Revolutionary War and the Valley Forge, which is right next to King of Prussia and helped the George Washington’s soldiers defeat the British. And a lot of people think that King of Prussia was named after the King of Prussia, but they’d be wrong. The King of Prussia is named after the King of Prussia Inn which is named after the King of Prussia, which is right in the middle of US 202, completely isolated, it’s in the middle of nowhere, but that was built during the Revolutionary War, the King of Prussia Inn.
Beau Friedlander:
So it’s almost another Plymouth, Plymouth.
Herb Weisbaum:
It’s almost another Plymouth, Plymouth. That is correct.
Beau Friedlander:
Okay. So I have a story. Do you remember getting in touch with me, I don’t know, 10 or 20 thousand years ago?
Herb Weisbaum:
Sure.
Beau Friedlander:
Well, we all have such good memories as we get older. You were doing a story about credit freezes. Do you remember this?
Herb Weisbaum:
Well, I know I did stories on credit freezes. Yeah.
Beau Friedlander:
Do you remember you had a theory? I think it was about maybe Experian. What happened to me, Herb, is you had called me up and said, “hey, can you do me a favor? I just want you to remove your freeze from Experian for a second, because I want to check something out and tell me what message you get.”
Herb Weisbaum:
Okay.
Beau Friedlander:
You don’t remember this at all?
Herb Weisbaum:
I’m sorry, I don’t. Go ahead. But I’m sure it’s all true.
Beau Friedlander:
No, it’s fine. I did it. And then I promptly forgot all about it until I got a letter in the mail saying “Mr. Friedlander, we’re sorry to say that we were unable to authorize this credit line that you wanted to do because you didn’t call us back when we called to check.” Which was great that it worked, even though my freeze was off, but I got… So I put my freeze back on when I realized what had happened, and then I got like 20 of those letters going forward.
Herb Weisbaum:
My apologies.
Beau Friedlander:
No, I loved it. The consumer protector working with another consumer protector, we have to take the hits.
Herb Weisbaum:
Yeah. Well, it’s come a long way since then, but I still have problems with the fact they keep trying to upsell you and market you stuff every single time you go on and try to do something about that. That’s one of my bones, but now that with the instant on, instant off and the whole routine, it certainly has gotten a lot better than when I allegedly contacted you way back when that I have no memory of.
Beau Friedlander:
Allegedly.
Herb Weisbaum:
You’re like the person who comes to me at the supermarket aisle, I’m checking out and a person comes to me, I don’t know if you remember me, but I wrote you a letter 28 years ago. Well, first of all, you wrote me a letter, I never saw you.
Beau Friedlander:
No, no.
Herb Weisbaum:
You’re the one. You wrote me a letter.
Beau Friedlander:
I was helping you Weisbaum. So, come on.
Herb Weisbaum:
Hey, thank you. You’re a great man.
Beau Friedlander:
It has actually gotten a lot better. And I now I keep my, I won’t say which ones, but I keep two of my accounts frozen and then I keep one locked.
Herb Weisbaum:
Okay.
Beau Friedlander:
And the one I keep locked is the one that I found is most often used by people. And so that I can in-app on my phone just unlock it real quick. Lock it again. I find that works. What do you think about that Herb?
Herb Weisbaum:
Well, the difference between the freeze and the lock obviously is that it’s not federally regulated, number one. Number two, a lot of people who do that get marketing material. They have the right to collect your, some information on you, which I don’t like. It’s so easy now to unfreeze your account. When I bought my car two years ago, I went to the credit manager and I said, who do you use? And he said, whichever one of the three they use. And I got online. I unfroze it. I thawed it for 48 hours. He did the credit check. It froze itself back again. It refroze. It was not a hassle. I’m just not a big believer in just all the marketing stuff they send your way, so I’m a big believer in the freeze, as opposed to the lock.
Travis Taylor:
What information do they harvest with the lock?
Herb Weisbaum:
I don’t know. All I know is that they can. I mean, these guys have everything anyway, but I just know that they’re able to use it to market you. That’s the difference. It’s not the collecting, it’s the marketing where they can’t market you if it’s a federal freeze, because it’s federally regulated. But with a block, they can send you marketing stuff for financial products and that sort of thing. So I just don’t want to deal with it.
Travis Taylor:
I think the other question I have, and this is just more for the audience, each time I’ve suggested to people not on the show that they freeze their credit, they also freeze somewhat ironically, because they seem to think it’s going to be some huge, daunting task to do it. When you say it’s gotten easier, what should people know?
Herb Weisbaum:
I mean, you go online, you answer a few questions, you set up a pin. And I don’t know, I can’t remember, I done it a while ago, but I think it’s like a couple of minutes at the most. Make sure you put the pin somewhere safely, the secure, where you can get it if you need it. Because if not, you’re going to jump through a million hoops. And to unlock it, you can literally do it again. Just go right online or on your phone and you can do it, and it happens almost instantaneously. I think it’s 30 minutes or less it’s required, but it happens almost instantaneously. It’s the only thing you can do to actively, proactively stop bad guys from opening new accounts in your name. Everything else, all the credit monitoring, all the other stuff you pay for is all the horse is already out of the barn.
Herb Weisbaum:
This is the one thing that can keep the horse in the barn from getting out. And I had a situation a couple years ago where my wife had a credit union account. I wanted to put my name on the account and I forgot that I had a freeze on all my credit reports. And she called from the bank. She says, they’re telling me they can’t put you on. We have a freeze. It’s like, right. Yes, it did exactly what it was supposed to do because if I had been a bad guy trying to get on that account, it would’ve blocked me from doing it. I had no need to be on the account, really. I didn’t bother with it, but it actually worked in real time, in real life it did what it was supposed to do if I had been a bad guy trying to get on my account.
Herb Weisbaum:
It’s easy. It’s free. It doesn’t affect anything with your other creditors. It doesn’t affect your credit score, another big myth. And a lot of people who get the identity theft resource center, who I know Adam works with a lot, they just did a recent study where people who get the data breach notices do not respond by making sure their accounts are frozen, which is probably the number one thing you should do. Well, you don’t have to have wait for a data breach. Your stuff’s out there as you guys all know. You should be doing that proactively now, but I can’t encourage people enough to do that. And as Adam would say, and for your kids. Javelin says 1.25 kids had their identity stolen last year. 1.25 million.
Adam Levin:
So Herb, while we’re on a roll here on freezes. How easy it is it to be able to freeze your kids credit now?
Herb Weisbaum:
I haven’t done it because I have no kids, but it takes a little bit more hoops to jump through. You have to prove first of all, who you are. And then you have to prove that you’re their parent or their guardian. Just a little bit more paperwork, but I know a lot of parents who have done it and it wasn’t that big a deal. And it’s certainly something that you could really do to protect your kids. I mean, just, I can’t imagine if your kid decides to, gets old enough to get a credit card or a student loan, all of a sudden everything is blocked and stopped because you’ve had all these credit cards and run up all these bills and are delinquent and have defaults and all this kind of thing. And your kid never had any of that kind of stuff because some bad guy created a synthetic identity and is playing your kid. I mean, this is the one really financial thing you can do to protect your kid.
Adam Levin:
Anyway, Herb, we did want to talk about a couple things. One of the things is a huge problem and getting bigger by the minute are all of these cryptocurrency scams. I mean, cryptocurrency is definitely the brave new world, and a lot of people have made a lot of money with it. A lot of people have lost a lot of money with it. And then there are those people who say, let us use this as an opportunity for us to make ourselves a lot of money by getting you to lose a lot of money. So you have some crypto stories for us, right?
Herb Weisbaum:
Yeah. I mean, no matter what you think, what your opinion is on cryptocurrency, the bottom line of the story that I wrote for checkbook.org is you don’t want to be giving your money to a criminal, a con artist who says they’re going to invest for you because you’re absolutely going to lose. And there’s a couple of things going on here, but basically as you know, the criminals go where the action is. The action is on cyber currency right now, and the action is all also on Facebook now. So they’re trying to become friends with people and everybody just clicks and they want all these likes and friends and all this kind of stuff, so they’re pretending to be your friend. And then what they want to do is they know where the great investments are in crypto currency. They’ve made a lot of money cryptocurrency. In some cases, they’ll show you bogus screenshots or text you information about how wonderful the investment is and how much money they’ll make, and they want you to get in on the action.
Herb Weisbaum:
In the story, I actually have a text that somebody who lost money to a cryptocurrency scam sent me and they sent to the Better Business Bureau, which provided it to me. And I mean, the claims are outrageous. And if somebody said this to you and they walked up to you on a street, you’d laugh and walk away. But somehow because it’s in a text message, oh yeah, this is great. If you give me $300, you’ll get back $6,700 daily. Profit daily. $400, $8,500 profit daily. $500, you’ll get $10,000 profit daily, guaranteed. Nobody can guarantee it. And again, if you walked out to me in the street Adam and said that, I’d walk away laughing. But for some reason, it comes in on a social media message or a text message and all of a sudden people are believing this thing. You know there are-
Adam Levin:
Bernie Madoff, right? I’ll give you this return, and I guarantee this return.
Herb Weisbaum:
Yeah. Although he, because it was a Ponzi scheme, he had some people that were actually saying that they got the money so he could use that. What’s happening here is that people now that the technology has advanced so much since Bernie Madoff, that they can actually create fake results. They actually, some of these companies are so sophisticated now that they actually have websites, bogus websites, where you can track your investment and they’ll give you phony results and or they have customer service people, you can call up a customer service line and talk to somebody who will tell you all about your investment. The problem is that when you go to try to take out your earnings, you can never get your earnings back.
Herb Weisbaum:
I spoke to a guy in Massachusetts, he lost $50,000. So he had a new Facebook friend and she told him that this was going to be a great investment. So he decided to start slowly, $25,000. I don’t consider that slowly, but he started with $25,000 and he did really well. And she told him, if you put another $25,000 in, you can increase your results even faster. So he put another $25,000 in and before long, he supposedly had $560,000. They showed him. It was right there on his account. It was right there on the screen. So he decided I’m going to take out my initial $50,000 investment to protect myself and everything else can be funny money. They gave him the runaround for a couple of weeks, and then they told him that he’d have to withdraw the entire amount if he wanted to get his money back and he would have to pay an overseas handling fee of $28,000.
Herb Weisbaum:
Couldn’t take his earnings and use that for the fee. This had to be fresh money. He had to put, and that’s what they always do, you can’t take it out of what you made. You got to give us fresh money. Another way to steal even more money from you. So he realizes that he was dealing with a con artist. He filed complaints with the police in Hong Kong, where they were based, the FBI, the BBB, but he realizes that he’s never going to see his money again and said, people need to be really skeptical of a new Facebook friend or someone who encourages you to do this.
Beau Friedlander:
One thing that stuck up to me when you were talking is there’s a term I’d never heard before, and if someone used it about an investment, I would stop in my tracks, which is fresh money. I’ve never heard that phrase before, but I’m definitely not going to offer any.
Herb Weisbaum:
Right. And I don’t know that anybody ever uses that term. But what they tell them is they’ve got to… You know what, the bottom line is you have all this money. I can’t take my fees out of that money? I mean, it’s like, no, we-
Beau Friedlander:
It makes no sense.
Herb Weisbaum:
It makes no sense whatsoever. But of course, by that point they got your money and they’re gone and you’re never going to see your money again. The other thing is that what they’re now doing is, and this is a great use of con artist skills. They’re combining the romance scam with the crypto scam. So in the old days, when we first started reporting on romance scams, you fell in love with someone online, which I to this day don’t know how that ever happens, but it happens all the time. So you fall in love with this person, and it used to be that they gave you a sob story. I’m sick, I need some money. I’m overseas, I need to get back. My daughters has an operation, could you please, whatever it is, and you had to give them money.
Herb Weisbaum:
Now they’re pretending to be a brilliant crypto investor. So they’re the financial wiz, and I’m making all this money and I can’t wait to see you. And because I’m doing so well, you should be able too. So when I see you having even more money, you should be able to cash in on this as well. Let me share with you what I’m doing. So now you’re giving your love interest your money and they’re crypto scamming you, as opposed with having to give you a sob story in order to get the money. That’s just what happened in the last year or so. It’s a really, really serious one that’s really taken off. So any of your quote, unquote love interests who you met on social media that tries to get you to invest in crypto scams, cryptocurrency, man oh man, run away.
Beau Friedlander:
Adam, that was Amanda.
Adam Levin:
Yes.
Beau Friedlander:
That happened to a previous guest on our podcast. Amanda had an Italian. We called him, what did we call him? Lira crypto?
Travis Taylor:
Yeah, lira crypto. Yeah. And he sent along images to the person we had on the show of Italian wine, just to let her know that he was in fact from Italy. It was-
Beau Friedlander:
And very rich.
Travis Taylor:
Yeah. It was a nice touch.
Travis Taylor:
One thing I’m wondering about is we’ve gone over the romance scams, and so it totally makes sense how you can fold crypto into that. And people it’s sort of become a running joke about getting the Nigerian prince email scam, and things like that. For these investing scams, is there any new tech that they’re trying or is it really just the same old stuff if you just swap out the word Nigerian prince with crypto or investing or something? Is there something new that’s being brought to the table here? Or is it just an old school scam with the new currency?
Herb Weisbaum:
Well, by the way, speaking of the Nigerian scam, I’ve been doing this so long, since Adam’s been in diapers, that I have the original Nigerian letters. I mean, letters with stamps on them from Nigeria and then it went to a fax and then it went to email. But it’s the pitch. It’s the pitch that’s the same, and the technology is what changes. So they’re still playing on greed. They’re still playing on gullibility. They’re still playing on get rich quick. All that kind of stuff. Even the technology has changed, it actually just helps them make the scam seem more legitimate. They can use these bogus screenshots. They can have bogus websites. They can befriend you where you don’t stop and think that anybody can become a friend. They can use the stuff you put out on your Facebook account to become the person who wants to become your love interest, where before it would be a lot harder to figure all that kind of stuff out.
Herb Weisbaum:
So it’s just that the technology has made it easier for them to figure out how to specifically target you and to let your guard down. And then to convince you that the scam is legitimate, where in the old days it was a lot harder to do that. I mean, a letter that says I have all the gold that’s Saddam Husain left behind is a lot harder than if you had today you had a screenshot that showed the gold and you found it and somebody tests. That kind of thing.
Herb Weisbaum:
It’s just, it’s the same appeal that is going on, it’s just the technology makes it so much easier to target people and convince people. I don’t know why, and it’s just studies have shown this, people believe something digitally that they’d laugh at if somebody gave it to them in the linear world or the non-digital world. If somebody said this to you, they walked up to you on the street and says, hi, I have this bag of money. It’s got a thousand dollars in it. Would give me $2,000 or whatever. You’d laugh. You’d walk away. Get away from you idiot.
Adam Levin:
Right. But now, okay. I have three observations. The first is when I was in diapers, I actually was writing Nigerian scam letters. That’s how I learned originally how to write.
Beau Friedlander:
And I’m wearing diapers right now.
Adam Levin:
That’s true. And then that’s the great thing about life. It’s all a circle. We start with diapers. We end with diapers. But okay, but now look I think the cryptocurrency scam is a little different than Nigerian scam.
Beau Friedlander:
Me too.
Adam Levin:
Because Nigerian scam-
Beau Friedlander:
Sure it’s based on fact.
Adam Levin:
Yeah. It was about, you were an heir to something that you weren’t, or that they were trying to… But with cryptocurrency, I mean people see regular people, this is like when we went through the meme stock crazes. Regular people were like diving into stocks and they were going crazy and people were making a fortune. Well, in this case, real people are becoming millionaires and billionaires on this. But that being said, a scam is a scam is a scam. So-
Beau Friedlander:
But there is the FOMO. The FOMO thing is real. Yeah, the Nigerian scam, also, you could see the angle, even if it wasn’t like you’re an heir to this or that. It was like, you could see oh my gosh, if I do this, the tax hit is going to be so extreme that I lose no matter what. No matter what the angle was, you couldn’t win.
Adam Levin:
No, but you’re thinking about taxes. A lot of people go, well, if I could work a deal with the Nigerian prince, maybe I could move the-
Herb Weisbaum:
Yeah. Those people were trying to be culpable as well. I mean, they were actually trying to do a scam so that you had to get people who were willing to commit a scam in order to do this kind of thing.
Beau Friedlander:
Right.
Herb Weisbaum:
You know?
Adam Levin:
But, okay, so, but past that, outside of assuming, everybody’s trying to scam you and checking if these sites and companies are actually official, what can people do to not get scammed about this?
Herb Weisbaum:
Only work with a licensed and registered securities, broker, somebody locally in your state. Nobody’s got the inside scoop. Nobody’s got the inside deal. Nobody can get you more money than anybody else. If you want to take the risk with crypto, then go to somebody who’s licensed and registered to do this, somebody you know where they are, you know you can find them and who’s reputable. Doesn’t mean your cryptocurrency investment is going to go up, but it at least means you’re not going to get ripped off by the person who’s taking your money. I think that’s the best advice. And maybe start slowly. See how it goes. And don’t put your entire life savings into anything and don’t put any money into crypto you can’t afford to lose. Crypto is certainly a high risk investment, even if you’re dealing with legitimate people, but that would be the best advice. But it’s-
Adam Levin:
It’s like going to Vegas, right?
Herb Weisbaum:
Yeah. Only what you can afford to lose.
Adam Levin:
Right.
Herb Weisbaum:
But if you deal with a con artist, you’re going to lose everything, and that’s the difference. If you invest with a legitimate broker, somebody who can handle these investments, you might make some money if the market does well. If you deal with a con artist, you’re guaranteed to lose. It’s like the slot machine never pays out. And you don’t get stuck in that situation.
Travis Taylor:
Do you think there’s a knowledge gap though, with the more established securities brokers? I think one thing that might end up presenting sort of a challenge there is that if I were to look up the people in my area who I can actually, who are verified, who are licensed, that I would feel more secure giving my currency to, I might just ask them about cryptocurrency, they might just look at me like they have absolutely no idea what I’m talking about.
Beau Friedlander:
A hundred percent. And the other thing is that there are cryptocurrencies are like little businesses, so each one has a team that’s working on it and that’s pushing it and marketing it and driving it. And so there are insiders. They have a certain smell to them, and the line between hucksterism and these new cryptocurrencies is also sometimes really fuzzy. So I’m with Herb. If you want to invest in crypto, stick with the really, really proven cryptocurrencies, and you can do that by going to Coinbase, I think is a pretty good place to start.
Travis Taylor:
Right.
Beau Friedlander:
Coinbase, doesn’t let you buy ones that aren’t proven.
Herb Weisbaum:
Things can and happen in the digital world, as you guys know, I mean, your podcast is called what the Hack, that everybody thinks it’s because of the blockchain and the whole routine, it’s perfectly safe. I mean, there have been hacks of the companies, legitimate companies who sold the crypto, like hundreds of millions of dollars that because this is a totally unregulated world, and I think the SEC and some other government agencies are going to try to do some kind of protection to people on our end that you could be wiped out in that. And also, there’s a case you probably know, the guy who’s got his digital wallet and you get 10 tries to get the password, he’s on number nine. And if he doesn’t guess it on number 10, he’s going to lose $250 million. Bye bye. I mean, that just-
Adam Levin:
[foreign language 00:30:43] baby.
Herb Weisbaum:
That just doesn’t happen with in the real world of other investing. The world of other investments, I mean, it’s totally the wild west with all the risks that are totally inherent in the whole thing, and people just have to realize that.
Travis Taylor:
It is sort of funny with decentralized finance platforms, which are DeFi the ones that keep on getting hacked. There’s just about every day, if not every week, a headline there about a hundred million, 200 million just sort of vanishing there. And the thing that the proponents for DeFi say is we don’t have all that legal red tape that banks do. And that sounds appealing until your money goes away, right?
Herb Weisbaum:
[crosstalk 00:31:22]
Travis Taylor:
Right. Exactly.
Herb Weisbaum:
Yeah.
Beau Friedlander:
I think Herb really hit on the FOMO thing, which is true for every single scam I can think of. Not every single scam, that’s not true. But FOMO is a great motivator for people. And whether it’s a cryptocurrency or act now and you’ll get a free vacuum cleaner, whatever the lure is, there’s a big old, hungry, dumb fish on the other end.
Herb Weisbaum:
And in my career, I’ve talked to hundreds and hundreds of scam victims, and they almost always say the same thing at the end. How could they do this to me? How could they steal my life evenings? How could they? I’m a senior and I’m only living on social security, and they took all my money. How could they do this kind of thing? And the answer is really obvious. They don’t have a conscience. And I can tell you that because I talked to one guy once. This guy was arrested in a boiler room sting. He took in personally, over a million dollars over his career with this boiler room. He was about to be sentenced and he agreed to talk to me here in Seattle because he was hoping the judge would go lighter on him because he cooperated to tell how the scam worked.
Herb Weisbaum:
And I asked him, point blank, how do you sleep at night? First I said, what do you do with all the money you made? And it was like it went to drugs, it went up my nose, we got the most expenses to bottles of wine and champagne and sports cars and steak dinners. And it went out as fast as it came in. And then I said, how do you sleep at night? I mean, you’re stealing money likely savings from people. And he said, man, I sleep just fine. He says, my job is to steal your money, and your job is to not fall for the con. And if your stupid to give me your money, that’s your problem, not mine. That’s where they’re coming from. These guys have no conscience whatsoever. You cannot rely on the fact that somebody won’t hurt you. You have to count on the fact that there are people out there, predator sharks, who will hurt you and do just fine going to sleep that night and then doing it to somebody else the next day. And that is a reality check that every everybody needs to realize.
Travis Taylor:
It reminds me a little bit of the TV series Madmen. Not sure if anybody in here has watched that. But at one point someone asked the main character, Don Draper-
Speaker 5:
How do you sleep at night?
Speaker 6:
Bed made of money.
Travis Taylor:
That’s what I think about with these scammers.
Herb Weisbaum:
Yeah, that’s exactly right. Exactly. And if you’re someone in one of these other poorer countries, if you scam somebody, your logic is, and I talked to one of them, A, you’re all riches can be in America. You guys got more money than you know what to do with, the roads are paved in gold, and if I get $10,000 from you, I made it for life. So it’s like, all I’m doing is balancing the equation. I’m doing a little social justice here. So that’s where these guys are coming from, and you got to realize that.
Herb Weisbaum:
The finish up, a lot of the people who were crypto scam victims told me they got the tip from a friend, like a real friend, like somebody they recognize. And to which I respond, did you know your friend’s account could be hacked? It could not be your friend on Facebook. It could be the criminal who hacked your friend’s Facebook account that is telling you this kind of stuff.
Adam Levin:
But it also could be your friend who thought that was, they got something that was cool, they wanted to share with you. And they never realized that they were sending you something that was infected.
Herb Weisbaum:
Correct.
Travis Taylor:
It’s also not really that heavy of a lift to set up a Facebook account, take someone’s name and then their image off of a Google image search, and then just say, Hey, I’m your friend. Especially if they can see your LinkedIn profile or something like that. And then just pretend to be one of your connections.
Herb Weisbaum:
Exactly.
Beau Friedlander:
And I like the undo button metaphor because it’s like carpentry too. Measure twice, cut once, because there’s no such thing as a board stretcher.
Herb Weisbaum:
Right.
Travis Taylor:
Right.
Beau Friedlander:
These things are permanent once you do them.
Travis Taylor:
Yep.
Beau Friedlander:
Or they’re at least if they’re not permanent, they’re really annoying.
Travis Taylor:
Yeah.
Adam Levin:
See Hern, and when Beau talks about carpentry and every we’re talking about Grizzly Dan now. I mean, this is a man who moved to the country, befriended Kenneth, the bear, and now pretty much does everything himself. The only thing he hasn’t gone out is gone and shoot dinner, because he doesn’t believe in shooting things.
Beau Friedlander:
No, I just tackle it and gnaw on its leg. But the-
Adam Levin:
Oh, okay.
Beau Friedlander:
But you failed to mention, Adam, that I also have befriended Kenneth, the bear. We’ve named him. And I just, I take him around lovingly in the bucket of my tractor, are all over the property and he just likes to sit there with a cocktail and look at things. He’s a cute bear.
Herb Weisbaum:
Well Beau, I went to Syracuse and they have a forestry school there. You look like all the kids who were in forestry school.
Beau Friedlander:
I do. I resemble that comment.
Travis Taylor:
Yeah. He’s so rustic he has wood burning COVID.
Adam Levin:
Herb, this has been awesome.
Herb Weisbaum:
Thank you. It was really fun. Thank you. Thank you so much.
Adam Levin:
And thrilled to have had you on the show. Want to get you back again. Heaven knows you have a true inventory of great stories to share, and we appreciate you coming on today and sharing.
Herb Weisbaum:
And if I might just say, if folks go to my website, ConsumerMan.com, which I know you go to all the time, Adam, there’s a at the top where you can sign up for my weekly newsletter. You can get all my Checkbook stories. You get the links to the Consumerpedia podcast. The only one who sees that list besides me is Sam, my dog. I don’t rent it, share it, sell it, give it to anybody. So you’ll get a little newsletter from me every week with all the stuff going on the consumer.
Adam Levin:
Oh see, I thought when you said Sam, it was Uncle Sam.
Herb Weisbaum:
No, this is Sam, my dog.
Adam Levin:
We don’t like to share with Uncle Sam.
Herb Weisbaum:
Absolutely not.
Adam Levin:
Take care.
Adam Levin:
So Travis, you mentioned there’s a huge knowledge gap between financial advisors and the world of DeFi.
Travis Taylor:
Right.
Adam Levin:
Can you talk a little more about that?
Travis Taylor:
Well, DeFi is relatively new, even though Bitcoin and cryptocurrency at this point, several of them have matured. The entire idea of decentralized finance, it’s a new world. That’s also one of the things that makes it so hackable because they’re each largely running on new and sort of unvetted platforms. So it’s something where you could still end up making money on an investment there. It’s not to say that the entire thing is a scam, although I know some people might disagree with that, but you still need to invest wisely, even if it’s not necessarily through a financial advisor.
Beau Friedlander:
Well, the people who disagree with it think it’s a Ponzi scam. But there are cryptocurrencies that are designed for instance, to just stay at a dollar value all the time. And then there are other that, which is just a project, basically a math project. And there are other ones where you just don’t know if they’re legit. And if we don’t know they’re legit and we’re sort of dipping our toes in the water of crypto, then for sure you are, the person in charge of buying and selling stocks for you on the New York stock exchange or the NASDAQ, or even if you’re doing some over the counter stocks, they’re not going to know anything about those newly issued currencies.
Adam Levin:
And when you’re talking about investing, you can’t just live your life praying that Elon Musk or Mark Cuban are going to say something that will propel your particular cryptocurrency to the moon.
Travis Taylor:
Well, it’s something to that if you are looking to invest in a cryptocurrency, there are a few just telltale things I think that can make you a more secure investment. With that being the case that would have the caveat that it’s less likely to go from being Bitcoin at $10 a decade ago or so. Bitcoin has been around a while. That’s the sort of thing where I don’t think that’s as necessarily fly by night. Whereas if some is launching a new cryptocurrency to support a new product or something like that, I’d be pretty skeptical.
Beau Friedlander:
Well but however, if I would say this, do you know Elon Musk? Do you know Adam Levin? Do you know Mike Tyson and do you know, former president Obama? Because if you do-
Travis Taylor:
That would be an incredible cocktail party.
Beau Friedlander:
It would. And if you knew all those people and someone at that party was starting a new cryptocurrency, you should buy it.
Travis Taylor:
Right.
Beau Friedlander:
But if you don’t know any of those people and you’re at your kid’s little league game, and Jake wants to sell you a new cryptocurrency he’s working on, you should just maybe give him a dollar.
Adam Levin:
Jake should stay with State Farm and stay out of cryptocurrency. I think it’d be better for all of us.
Travis Taylor:
But yeah, I mean, it’s definitely an interesting world and there are some interesting applications and there’s still money to be made there, but I think one of the main things that Herb was saying, which is I think just totally solid advice is just be careful. And if something sounds too good to be true, just assume it’s a scam.
Adam Levin:
And never ever, ever play with more money than you can afford to lose, that would change your lifestyle. There are risky investments. There are more predictable investments. We’ve seen over the past few months that even the investments that we thought weren’t that risky, they were sure wins, like some of the big tech companies have now become riskier. So if it becomes risky, at least for a period of time to own stocks like Twitter and Facebook and Amazon and Google, imagine what it’s like to be playing in cryptocurrency, which could be 30 cents yesterday, $400 tomorrow and 10 cents the day after.
Beau Friedlander:
Speaking of which Adam, I want my $10 back.
Adam Levin:
You can’t have it.
Beau Friedlander:
I want it back.
Adam Levin:
You can’t have it. Travis said, Beau, doesn’t get it back.
Travis Taylor:
It’s true.
Beau Friedlander:
But I don’t believe that there’s anything called Adamito.
Adam Levin:
There’s totally Adamito.
Beau Friedlander:
All right. Well it better go up because I’m really hoping to get some money out of it.
Adam Levin:
Actually, Kenneth, the bear is going to be a new form of cryptocurrency.
Beau Friedlander:
Bearito.
Adam Levin:
Ken bear.
Travis Taylor:
Bear coin.
Adam Levin:
That’s it. Bear coin.
Beau Friedlander:
When I wrap Kenneth the bear up in a blanket, I call him a Bear-ito.
Adam Levin:
The big Bear-ito. And by the way, do you know how to really make a small fortune?
Beau Friedlander:
Start with a big one?
Adam Levin:
Put a big one into Adamito.
Beau Friedlander:
So maybe you can just give and Adamito coin to everyone who rates and reviews the show.
Adam Levin:
I would love that.
Beau Friedlander:
Okay. You’ll do it?
Adam Levin:
And in fact, if you will rate and review the show and give us five stars and then send us a note going, it was me, Then we will send you an Adamito coin.
Beau Friedlander:
Oh my gosh. And that means that my $10 in Adamito might still be worth $10.
Travis Taylor:
It’ll be worth at least a thousand Adamitos.
Beau Friedlander:
Right. Adamitos.
Adam Levin:
The big question you’ll know we’ve made it big when you can buy Doritos with Adamitos.
Beau Friedlander:
What the Hack with Adam Levin is a production of Loud Tree Media.
Adam Levin:
It’s produced by Andrew Steven, the man with two first names.
Travis Taylor:
You can find us online at loudtreemedia.com and on Instagram, Twitter, and Facebook @adamklevin.
