In our very first episode of user-submitted stories, Michelle goes over some common financial scams, from classics such as collections on old debts, to student loan scams, to more complicated and outlandish forms of tax fraud!

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INTRO: [00:00:00] Hello. And welcome to the Young Scrappy Money podcast. I’m your host, Michelle Waymire. And each week, I’ll be bringing you tips and tricks to help you take control of your finances as well as interviews with people who made big financial changes in their own lives. So join us. And we’ll help you get your financial s**t together. 

MICHELLE: Hello, everybody. Welcome, welcome. This is another episode of the Young Scrappy Money podcast. And this is gonna be the kind of episode that’s a little bit of a downer. I’ll be super honest with you. This is not a particularly fun topic for many of us. 

We’ve already talked about debt and credit scores. And so I know we’re capable of getting a little bit heady on this podcast. But this is gonna take it to a whole new level. I mentioned before that I’m a financial coach. And what this means is that I hear a lot about other people’s money.

Obviously, my favorite stories to hear about are success stories, even if somebody’s not working with me. It’s really common that friends or loved ones will share their money victories, which I always love hearing. That s**t, it totally makes my day, even if it’s not like we were working one-on-one together or anything like that. I always feel so satisfied when people in my community or in my network are making good financial decisions. That makes me happy. 

The flip side is, because I’m a financial coach, I often also hear about a lot of people’s money mistakes, either things that they did wrong that they really regret or, in the worst-case scenario, times where they were financially taken advantage of— so people coming to me either looking to get advice about how to handle those situations or simply letting me know that a particular scam is out there and that they’ve fallen prey to it. So recently, I had a friend reach out to me. And they had one of these stories. 

They had a scam that went through that they had reported to the police and all of that but had the sense of, I wish there were a way to let more people know about this thing that happened to me. And then maybe they can avoid this scam, avoid it happening to them. And I thought, that’s great. That’s a great podcast episode. 

So I reached out to various folks in my network. I posted this on my LinkedIn and Facebook and Instagram, all over the place. Asked a couple of clients as well, who came forward and shared stories with me. And tried to come up with a list for y’all, a collection of common financial scams that I think are either particularly notable in how commonplace they might seem, things that are actually fairly likely that a reasonable person might get sucked into, not just this classic, hi, I’m a Nigerian prince. And I would like you to give me $50,000. 

Um, not so much that kind of stuff, but some of the more sneaky, insidious scams as well as a couple of things that I found out about and researched that are just wild, just buck wild scams that you would not even imagine are out there. So I’m jokingly calling this the scampisode, the scam episode, because I wanna take some time and walk through some of these with you as well as give you some tips on how to spot it or how to handle that situation if you’ve fallen in that scam. So I wanna start— the first scam will be the one that my friend actually came to me with first.

And we’ll call this scam number one, collections on old debts. So my friend reports this morning they got a call from somebody claiming to be a process server, trying to schedule dropping off papers. So he gave me a number to call and a case number. 

I was called and told Bank of America had filed a civil suit for an account closed out in 2009. So long story short, my friend gets this notice that says, you have an old account that was closed out and in collections. And 10 years later, we’re going to come, and we’re going to sue you for this money. So you better pony up because otherwise we’re going to come after you. 

So my friend, well-intentioned, certainly not wanting to get into financial trouble, basically ponied up the money, paid off 50% of this debt, which is not, you know, a ton of money, but with the promise that that debt would then be settled for and officially closed out. Now, the problem with this is that there is actually a statute of limitations on collecting old debts. So if somebody comes after you 10 years later and says, it’s time to collect or we’ll sue, that’s a pretty good red flag that that’s not technically a legal claim. 

So what my friend did, they filed a police report in the state of Georgia where this fraud technically took place as well as a fraud claim with the bank. I did follow up with them to see where they stood on the matter. And basically, apparently their bank issued a temporary refund while they were investigating. 

[00:05:05] The police report did not prove to be particularly useful. The police said it was a civil matter rather than a criminal one. But I think this is a really common scam that preys on people who have old financial mistakes, who are still concerned about them to some extent, and who don’t necessarily know about the laws governing old debts. 

So how you should handle this type of situation, I would say my friend did all the right things, as much as you can do. But know that your debt is subject to a legal statute of limitations. And that limits how long debt collectors can sue to collect unpaid balances owed to creditors. So if you owe somebody else money, and it goes unpaid for a long period of time, there’s only so much that that debt collector can do in a certain period of time.

There’s actually a Fair Debt Collection Practices Act that kind of dictates that if the debt collector waits too long, and the statute of limitations has expired, they can’t actually sue you to collect the balance. So they can certainly contact you about it. And they can ask for— for the money back. But they can’t sue you for it. 

This is a little bit tricky because this limit is actually gonna vary by the state that you live in and the type of debt. So be careful. But typically, the statute of limitations is usually between three and six years. Um, things will stay on your credit report for seven years, things like missed payments or closed accounts. They’re gonna stay on there for seven years. 

So it might be that something is old, and you can’t get sued for it. It might still be impacting your credit. So kind of know that those are two different things. But if somebody comes to you and tries to sue you about a really, really old debt, odds are good that s**t’s a scam. So look up the statute of limitations and make sure that you’re reading more about your options or potentially even contacting a lawyer friend to make sure that it’s legit before you move forward on giving them information. 

This is definitely gonna be one of those episodes where I’ve got quite a few resources that I’ll put in the resources section of the blog. So if you’re reading this on another channel, know that the website has all of these episodes on it with an actual transcript and resources. And I’m gonna link out to an article with more information on the scam about collecting on old debts, which interestingly enough I found out— I found out about it online, read up on this article. 

Turns out it was written by Gerri Detweiler, who we had on our podcast already this year talking about credit scores. So fun fact, small world. Um, thanks, Gerri, for your continued input into our— into our money podcast, however indirectly. So that’s scam number one, collection on old debts. 

The second scam that I want to offer to you is student loan consolidation through a third party that charges extra for something you can do yourself for free. So this is— this sounds complicated. And we’ll— we’ll kind of lump all of these types of scams, and in this case for like student debt related scams in general. 

Know that this has a little bit of nuance as well because some things are definitely scams, most certainly illegal. And some things are not technically illegal. They’re just s**tty, unethical business practices. So I want to make sure that we draw a distinction between those two groups. 

So an example of a proper student loan scam would be if somebody comes to you and says, we can get your loans forgiven immediately. You don’t have to pay anymore. Just pay us instead, and we’ll pay the federal government for your loans. Or, pay us instead, and we’ll make sure your loans get forgiven and shut down. 

A lot of times they’ll use some sort of hook, like end of Obama-era forgiveness programs— which, spoilers, is not actually the case. A lot of those forgiveness programs are still alive and kicking. But they’ll kind of come to you with this fear tactic to say, the forgiveness provisions that you know are going away. So you have— you better work with us quickly so that we can make sure that your loans go away. 

What is most common that these folks will do is they’ll use this as an opportunity to get your personal information, which then they can use to contact the federal government. And honestly, one of the things that I read happens most frequently is they put your loans on deferral, their deferment. So you don’t owe payments for this usually six month period of time. 

Typically, people put their loans in deferment if they’re in school, if they have hardship. Something happens, and they’re not able to pay. This is a perfectly legal temporary fix for some problems. So what this company does is they put you on deferment so that your loan payments temporarily stop. 

[00:09:56] And then they collect payments from you on the meantime. And then oftentimes, they just bounce after that. So you give them their dues for supposedly doing you this service. And then you can’t ever contact them again after that. So this is illegal. This is a scam. For sure this is a scam. 

Um, this is somebody who is not providing you any benefit or service. They are simply using this as an opportunity to take your money and get your personal information. So that’s s**tty. People who do that are f**king garbage, and that’s a fact. 

What is also tricky, as I mentioned, that there are sort of nuanced versions of this that are not technically illegal. So you can’t just go and put somebody else’s loans in deferment and take their money and run. But what you can do is charge for something that somebody could otherwise do for free and misrepresent the value you add. So I’m gonna— I wanna take for example the student loan consolidation process. 

It’s important to know that, when it comes to your student loans, there’s actually two types of ways of handling it. There’s consolidation, and there’s refinancing. Refinancing is when you go through a private lender. 

So if you’ve heard of SoFi or Earnest, those are the folks who are— who are basically paying off your student loans for you. And then you enter in an agreement with that private company. So I’m not talking about that. I am not talking about refinancing. 

I’m talking about consolidation. When you consolidate your federal loans, you basically go through the US Department of Education. And internally, they issue a new federal loan that’s the combined average interest rate of all of your outstanding loans. 

So if you were in school for quite a period of time, if you never consolidated, you might have 16, 17 little loans on there. It might be a pain in the ass to keep up with. It might be hard to pay. But they’re technically all federal loans. 

So when you consolidate it, they’ll take those 16 or 17 loans. The federal government will pay them off. They’ll issue you one direct consolidation loan instead at an interest rate that’s basically the average of your outstanding interest rates. This is not a particularly difficult process. It doesn’t save you any money because they’re not reducing your interest rates. They’re just sort of averaging them out. 

And it’s completely free to do this. You can do this on the US Department of Education website for zero dollars. It takes less than half an hour. Or, you can call your servicer, and they’ll help you out with the process. It’s not particularly hard.

But I think because so many of us don’t know this, this is where companies come in. So basically what they’ll say is, you need to pay us $500 if you wanna consolidate your student loans. And we’ll handle all the paperwork for you. And then it’ll be so easy. 

So on one hand, this is not illegal because they are technically providing you the service of helping with consolidation paperwork. So they are charging a fee for a service to do an action that is legal. They’re not transferring any information. They’re not messing with your student loans. They’re just consolidating them for you. 

I would argue, while this is not illegal, this is immensely unethical. So for companies to kind of hold themselves out there and say, we’re the only ones who can help with this issue. It’s gonna be so easy for you. And you should pay us a ton of money to do it. I would say that’s a bad business practice. 

So know that, while this is not technically a scam, I see this quite a lot, where people pay somebody else to handle something that would take them 30 minutes and zero dollars. I’m also gonna link out to you— there’s a loan repayment article, avoiding student loan scams, and I would recommend, if this is at all relevant to you, especially if you experience fear and anxiety around your student loans. People get sucked into scams because they have some sort of fear about a situation. They want to avoid a negative consequence. 

So if you have a lot of fear about your student loans, I would recommend you take some time and read up about student loan scams so that when somebody approaches you, offering you a good deal, you have enough information to really filter out what’s a valuable offer and what is a scam or an unethical business practice designed to sort of target you and take your money. If this happens to you, you have a couple of options. There’s actually a place where you can go through the US Department of Education for these types of forms, as I mentioned.

If this has already happened to you, you might wanna go ahead and change all of your student loan passwords. Notify your servicer if it’s looking like an ongoing problem. You can also file a claim with the Federal Trade Commission. So the FTC has a place online where you can file claims about student loans. And there’s actually a suspicious activity report option through the Federal Student Aid Feedback System. So if you think that you have fallen prey to a student loan related scam, those are a couple of avenues for you to go through.

[00:15:08] Kind of tangentially related to this, we’ll call this scam 2.5. This is actually a scam that I almost fell prey to. So basically, going along with the idea that some things are not illegal, but they are completely unethical, I own a business. I have an LLC in the state of Georgia. 

And I received a letter in the mail that basically said, your LLC paperwork is overdue. The government’s gonna take your business away if you don’t file today and renew. For those of you who are not familiar with LLC paperwork, it’s true that you have to renew it every single year to stay in good standing. This is a fact. And I knew this to be true. 

And so when I got this notice in the mail that basically said, send us $375 to keep your LLC in good standing, I thought, wait a second. It is the new year. It is the beginning of 2019. I need to update my LLC paperwork. So I very nearly went through and just went and did it in the mail because this was the first notice that I had received about it. I assumed that this was the normal way to update your LLC because it was my first year having to do the updating paperwork. 

The red flag for me was the fact that it cost $375. It’s not particularly expensive to get an LLC in the state of Georgia, y’all. It’s like $150. I also paid a lawyer friend to help me file my paperwork. And the combined lawyer fee and state of Georgia LLC filing fee was less than what they said in this mailing. 

So I reached out to my lawyer friend and said, hey, look. Is this a thing that I need to be worried about? Do I need to file my paperwork? And the response was a resounding hell no. You can file the paperwork for free online, and it’s 50 bucks to renew. 

So again, basically this is not illegal. But this is a company that held themselves out there as a helpful service to make sure that my paperwork was in on time and that I wasn’t gonna get my business taken away by the government. Only they were basically charging me $300 for something that I could do myself for 50 bucks in five minutes. So I’m glad that I had a trusted resource to reach out to to fact-check and say, hey, is this a thing? 

So know that those types of businesses exist. Anytime there’s onerous paperwork involved in something, there’s gonna be somebody who’s going to try and get you to pay a lot of money in order to capitalize on fear or to capitalize on confusion. So people who are not familiar with the rules of LLCs, who are not familiar with the rules of student loan repayment programs, these are the folks who are likely to fall into those traps. 

So that’s scam number two. Partially, it’s a scam. But sometimes it’s just s**tty services that charge extra for something you can do yourself for free. 

So scam number three, we’re gonna get more into the scammy scam territory here. And this is a classic one where a friend or family member needs assistance. So this was actually submitted by somebody in the Young and Scrappy Facebook group. 

Basically, how it works is you will get an email or phone call from overseas saying that a family member that— you know, maybe you’re not super close with them, but somebody you care about, so probably not like a parent or child, but a cousin or, um, an aunt, somebody who you’re invested in but not necessarily close enough to to know about their in-depth problems and travel plans. And the email or phone call will basically say, this family member has run into some kind of issue. They’ve been robbed. They’ve lost their wallet, whatever that issue is. And that they need money ASAP to replace it and come home. 

The issue here is that people who are running these types of scams, the friend or family member needing assistance scams, they’re usually pretty d**n good at doing their research. And certainly social media, if you have a public profile, makes it all the easier to do that. So the conversation is gonna be super specific. 

It’s not gonna be, hey, your cousin needs help. It will say, your cousin Sarah from Wyoming was attacked and robbed while vacationing in France. She’s already tried to get assistance from your grandma, and your uncle, and your aunt, and all of these people whose names are clearly known to you. They’ll use the actual names of your relatives, if they can find them. 

And so you have to make sure that like you pay the fees on this person’s behalf, or we’ll have to detain her until the issue can be resolved. So again, they’re kind of preying on this fear tactic of if something— if you don’t send money, something will happen to a loved one of yours. And they’ll use information about the people in your lives, the people that you love, in order to convince you that this is real. 

So they’ll do their research. And they’ll kind of snag you that way. So can you send us $2,500 to get her home? Some garbage like that. So the issue with this type of scam is that oftentimes people will just send the money if they can’t get in touch with their relatives immediately. And certainly if the argument is that relative is traveling, especially if it’s a place that’s a little bit harder to contact, then people are likely to give family members the benefit of the doubt. 

[00:20:13] So they wanna send the money just in case something is wrong, even if they think it might potentially be a scam. And typically, the amount of money that you would wanna send, or that they’re asking for, is not an outlandish amount of money. It’s not like these people are saying, your cousin needs $50,000 to fix her papers. It’s, your cousin needs $200 or $500 or $1,000. 

Like it’s a low enough amount that it could be a plausible situation that a family member could be in. So that makes you nervous, and you pay. So you’d be surprised at how many people are just sort of compassionate by nature when it comes to family members. And so these types of scams are, one, really s**tty and, two, extremely effective. 

The FTC, the Federal Trade Commission, like we said, also has a really useful article about family emergency scams. And a couple of tips that they offer, how to handle this situation, one, resist the urge to act immediately, no matter how dramatic the story is. So obviously, the more dramatic the story is, the more you’re gonna feel afraid for this potential family member. But an immediate action is not usually warranted. 

And resist the urge to act without doing your research. So that research might be making sure that you are verifying that person’s identity by asking questions that a stranger couldn’t possibly—  so asking, you know, really personal stuff, to say, just to show that you actually do have my cousin in detention, can you please confirm her favorite ice cream flavor? The name of her first dog? Or something like that that would be hard to find but that you know to be genuine.

You might also just double-check with other family or friends. And that way, you can— you can make sure and fact-check, even if you’ve been told to keep it a secret. There’s no reason why a government agency would say, somebody is detained for paperwork reasons or passport reasons, but you can’t tell anybody about it. That’s not really how that works. 

Um, certainly don’t wire money. Don’t send a check by overnight delivery or anything like that. You can also report fraud at There’s also a hotline for this type of scam, or scams in general. It’s 1-877-FTC-HELP, H-E-L-P. 

And then you can also file a report with your state attorney general if something has already happened, and you’ve sort of fallen prey to this scam. So that’s scam number three. That’s the friend or family member needs assistance. 

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MICHELLE: The fourth one, you can— you can tell that I’m kind of doing these in order of like most innocuous, easy to believe. And we’re gonna get a little bit more wild as we go on with these last two. So scam number four is the Costa Rican lawyer scam. So this is a— this is a little bit of we’re getting into some Nigerian prince territory here. 

And this was also submitted by someone in the Young and Scrappy Facebook group who had a lot of client-facing work and actually was a— unfortunately a wealth of information on scams. So thank you, friend. If you’re listening, you know who you are. I super appreciate you giving all this information. 

So this is a scam that actually happened to a client of theirs that says, you know, basically there was an elderly client. And, um, this client fell victim to the Costa Rican lawyer scam. So this is not exactly as common as your everyday lottery scam or the Nigerian prince. But if you actually google search the Costa Rican lawyer scam, you can look it up. 

So apparently, circa 2008, it was fairly easy to become a lawyer in Costa Rica. You could pay a fee. You could register. And then basically, you are an attorney at that point— so, um, super hardcore process, as you can tell, highly legally binding. 

So basically, somebody contacted this client, who was an old woman, seeking donations to fund housing and educational assistance for children who had nothing. So it wasn’t set up actually as an opportunity for personal gain. It’s not like the Nigerian prince or like the inheritance scam where they say, you need to send us the deposit, and we’ll send you a bunch of money. 

This one was particularly sneaky and insidious because they were preying on her desire to help other people. So they said, you have to send us money because we are going to actually help— help children. So this client was a woman who didn’t have kids of her own. She had always wanted them. She was super hardworking. 

[00:25:02] And so this type of appeal not for personal gain, but for societal gain, was extremely powerful. So she wanted to be somebody who helped, helped these kids. She had about half a million dollars in the bank. And so there was this “lawyer,” quote unquote, who sent her updates on the project, told her all about the children, told her that the children thought of her like a grandmotherly angel, basically laid it on thick with all this bulls**t about how she was helping kids— when, in fact, this fake lawyer was basically taking all of the money and just using it. 

So, um, the person who submitted this scam was smart enough to know pretty much right upfront that this is a scam. So and they tried to tell her over and over, like, hey, you’re getting scammed. But technically speaking, if you work for a bank, and that person is otherwise of sound mind, you as a bank employee are not allowed to refuse somebody’s transaction. You can’t refuse a transaction if you think they’re an idiot. 

You can if there are obvious signs of cognitive impairment. So if you know that somebody has Alzheimer’s, and they say, I need to send $500,000 to Costa Rica, then you can intervene. But in this particular case, there wasn’t necessarily a ton of evidence to suggest that this client was not of sound mind. 

And so basically this woman like wired away all of her money until finally the scammers actually asked her for a check instead of a wire. So the woman dropped off the fraudulent check at the post office and let the person who submitted this story know. And that person actually got the post office involved because if you drop off a fraudulent check at the post office, then that technically overrides her right to privacy. 

So luckily, they were then able to get the police involved, which was good. They contacted her family. Everything finally stopped. But all of the money that she had sent up until that point was gone. I mean, there was no way to find the person. There was no way to get it back. 

So that’s— that’s s**tty. That’s really heartbreaking. A couple of key takeaways to this one, one, be aware that scammers are not just going to try to sell you stuff for personal gain. They’ll also prey on your desire to help others. So you might think that you’re doing a good deed as part of the scam. But, in fact, somebody else is just simply taking the money and profiting on your ignorance. 

The other thing that I think is really important, and a key takeaway of this particular story, is that this happened to somebody who was older but who was not diagnosed with Alzheimer’s. It later turned out that she— she did have some of these cognitive issues. But it wasn’t necessarily apparent right at the beginning. She didn’t show all these signs. 

So one thing that you might consider, even if this is not true of you, but there might be people in your life where they’re getting older— there’s the potential for cognitive impairment. You might actually be able to file a limited power of attorney with a bank for any family members or loved ones that you suspect might have this happen to them at some point. So this limited power of attorney really only applies to accounts held at that institution. 

So it’s not like a full power of attorney where you have control over somebody’s assets. But you can basically apply it to accounts held at that bank. It stops if the account holder dies so that there’s nothing wrong, or nothing weird, about the probate process later on. It’s typically free. 

But basically, it’s like putting a trusted contact on your account so that if an employee of this institution suspects that a fraud is happening, or a scam is happening, and that that person might not be in control of their capabilities, that they can reach out to whoever has the limited power of attorney instead. So for example, if you have a grandparent who might not be showing a ton of signs, but you think cognitive decline might be an issue down the road, you could file a limited power of attorney with your name on it. And that way, if your grandma was, you know, essentially trying to wire a bunch of money to Costa Rica, that bank person would not just contact her. 

They would also contact you. Or, they would contact whoever has limited power of attorney. So that way, you have the power to intervene. Obviously, this is not gonna apply to everyone. This is not gonna apply to all the cases. 

But just know that that might be something worth doing for certain people in your family who you suspect are more likely to fall prey to this type of scam. So that’s scam number four, unfortunately a pretty sad story. That’s the Costa Rican lawyer scam.

The fifth one, we’re getting deep here. We’re getting— we’re getting into some real dark web, conspiracy theory level bulls**t here. And this is the redemption movement scam. I had never, ever heard of this. 

Somebody who was in my network heard that I was doing a podcast on scams, reached out to me privately, and basically said, I was taken in by an absolutely massively illegal, buck wild conspiracy theory scam. And obviously, my question was, are you OK? Yes, they were OK, though they lost a lot of money. 

[00:30:05] Then I wanted to know more. So redemption movement, I had never heard of this before. And I had to do a lot of digging to make sure that I understand the nuances. Because, y’all, it’s weird. It’s weird, and it is insidious. And it is— it is big. 

So I’m gonna do my best to give you a rundown of what this is so that if any of these buzzwords happen, you— it’ll kind of at least ping your sensibilities to say, wait a second. That doesn’t make sense. Um, so basically, the idea behind the redemption movement is that the United States went bankrupt when it abandoned the gold standard in 1933. So this— we’re already on some alternate history, and we’re not even into the big part. 

And so instead of giving up the ability to, um, issue debt— so previously debt was backed by gold. Now, the gold standard is gone. So what— what’s the government gonna use to back the debt? Basically, the idea was that the United States started using its citizens as collateral so that it could continue to borrow money. 

And so what this theory says is that— and I say theory. But I will be honest. This is false. This is a conspiracy theory, um, just to be super clear here. That when a person is born in the United States, they get a birth certificate and a name. But they also apparently get a cash account— this is sometimes described as a bond— created in your name at birth. 

And this is money that is rightfully yours to spend on whatever you want or to pay down your debts. So people who believe in the redemption movement basically say that you have a strawman. So there’s the you you. And then there’s the fake you that’s the— basically the account that’s linked to the birth certificate. So there’s the you that’s a person. 

And then they call this a strawman. There’s a you that’s a strawman. And when you are born, and you look at your birth certificate, there’s a really common naming convention in the United States. Right? You have a first name and a family name. And your name will have a specific spelling to it. 

Typically, people will have— you know, whatever’s on their birth certificate, that’s what they— what they go by. Or, you know, that’s their legal name, for all intents and purposes. And in the United States, the way that we capitalize names, it’s the first letter of the first name and the first letter of the last name. So if your name was John Smith, it would be, you know, John, capital J, Smith, capital S. 

So that’s you. That’s you as a person. That’s your person name. Once you’re born, the strawman created for your identity, the one that’s linked to that fake cash account we talked about, is in all caps. So if you as a person are John Smith, capital J, capital S, uh, all caps JOHN SMITH would be your strawman name. 

And so any mail that is addressed incorrectly to you is actually meant for your strawman. And you can ignore it. So if— if they say John Smith, and it’s J-O-N Smith, and it gets sent to you, then that’s not for you. Um, if you get an email or a mail or a parking ticket or something, and it’s all caps, that’s not mail for you either. So you can ignore it because it’s just for your strawman. 

And here’s the kicker. So the argument behind the redemption movement is that you can actually redeem the fund that’s in your strawman’s name and get the cash that is being used to back your collateral. So basically, the scam says that the US government has a dollar value on your life and that you can get that money if you give up your birth certificate. 

So if you stop basically being a citizen of the United States, and you just sort of become some like free sovereign entity not connected to the United States, you give up your birth certificate, and you get all this money. Um, there’s also all kinds of layers here, y’all. Like if you know enough about the paperwork involved, you can also— you don’t just get to like unlock this secret vault of government cash.

But basically they say like you don’t have to pay taxes. And like if you have a parking ticket that’s in your strawman’s name, then all of that stuff doesn’t count. And it’s not real. And so basically it’s the whole like, the government’s a game, and the points don’t matter. So get yours. 

So this is really— this is a popular scam among, like I said, sort of dark web circles, conspiracy theory activists, people who go off the grid and wanna overthrow the government. And so here’s the trick. Because there’s so much paperwork involved, there are actually people who aren’t just scamming you out of your money. Basically, they will put together courses or tutorials on how to access your money. 

So you’re basically paying to learn this secret underground system of paperwork. And obviously, the paperwork is not gonna work out in your favor. You’ll be either creating legal documents or just ignoring things that are valid financial concerns. But you might pay somebody $2,000 to learn how to unlock your secret stash of government money. 

[00:35:04] So the scam is that partially people prey on the fact that, you know, if you’re in a lot of debt, it might look really appealing to know that there’s a stash of cash available to you. You might think, yeah, my birth certificate is not even worth having if I have all these student loans, whatever the logic there is. And so people can get you to pay them money to teach you how to make those things go away, even though obviously this is— this is completely fake, and totally buck wild, and not actually a thing.

This one, the redemption movement, is so hardcore and tends to be linked to like separatist violence, so to speak, that there are actually factions that have been labeled domestic terrorists. And actually, if you come across this one, you’re not actually supposed to go to the Federal Trade Commission. You’re supposed to go to your local FBI office. 

So know that there are a couple of red flags that you should be aware of, anytime somebody uses like redemption, strawman, getting into your identity and your fake identity. Even if it starts out something super normal like, hey, we wanna help you consolidate your debt, it might actually escalate into something that looks a little bit like the redemption movement. So I want you to be aware of these terms. 

I’m gonna put a couple of resources on there if you wanna read more. Obviously, Wikipedia is a great start. But there are a couple of more narrative articles of— of people who have fallen prey to the redemption movement or had family members that it happened to. 

So, um, it’s— it’s a little bit more on the outlandish side, this particular tax scam. And normally, this is the kind of thing where I say, how could this possibly happen to anybody? But again, the person who brought forward this scam was in a situation where their finances weren’t super great. They were nervous about it. They had fear about it. 

They were promised an easy solution. It was a solution that seemed outlandish. But again, debt consolidation in general seems outlandish. Sometimes the entire United States financial system seems outlandish. So it’s not a total stretch if somebody is kind of slow-walking you to this belief system about redemption and strawmen and all of that. 

If this happens to you, please be very careful. Please, please, please be careful. Some of these scams are apparently, um, linked to groups that are— that can be pretty violent. So contact your local FBI office if you come across this one. 

Phew. Man, we’re like 35 minutes into just talking about scams and people getting screwed over. And it’s really sad. And I feel like I need to go and hug a puppy, and drink an iced coffee, and like go bathe in the sunshine or something like that. I also feel like I need to take a f**king shower after reading about some of these things. So just— just know that, you know, there’s a— there’s a lot— there’s a lot out there to be careful of. 

A couple of other scams that were not quite super in-depth. And I wanna just mention them so that they’re on your radar, not quite the length of the five scams that I mentioned just now. Um, a couple other things to watch out for, there’s the common one, you have an inheritance from somebody. You have to pay the inheritance tax. And we’ll send you the full inheritance. 

So just know that, you know, that usually comes with a lot of paperwork. You give them a lot of your personal information. You give them the inheritance tax. And then you get nothing. So this is sort of the sophisticated sort of version of the lottery scam. 

Oftentimes too a recently deceased person can become the target of a scammer. So somebody will try and open credit in a dead person’s name from information posted in an obituary. So if somebody you know has recently passed away, unfortunately it is also a best practice to contact the credit bureaus with a notice to say, this person is deceased. Do not issue credit. So the sooner you can let the credit bureaus know, the better. And that way, there’s not a bunch of liens or debt outstanding on somebody who is recently deceased so that their estate does not have to handle those things. 

Apparently, there’s also been a scam going around town recently here in Atlanta that’s been targeting realtors for some reason, probably because they answer their phones more frequently. So the— basically, the person says that there’s a warrant out for your arrest. Usually, they’ll cite something like missed jury duty or a wrong name, something basic that you would not necessarily easily know about but kind of seems plausible. 

So obviously, missing jury duty is an offense if you knowingly do it. But, you know, the government at least tries to make you know that you’ve got a jury duty pretty far in advance. And that you— basically, you have to pay them to stop an arrest. So be very careful anytime somebody is sort of saying, you did this bad thing without knowing it. And you have to pay us money to make it go away. 

[00:40:04] That’s like the most common structure of a scam. So be on the lookout for anything that looks like this. Ugh. OK. I think we’re good. I think— I think we went through all the big ones. 

Thank you so much if you submitted this information. I just wanna— to stress if you have ever gone— you know, been victim of a scam, if you’ve ever been victim of fraud, know that these people are tricky. It is their number one goal to lie to you to get your money. So please don’t feel guilty about it. Please don’t feel shame about it. 

Oftentimes, there’s not a ton that you can do except for make sure other people know that this is a thing. Make sure that you’re reporting it to whoever you can, whether that’s the Federal Trade Commission, or the FBI, or the US Department of Education for student loan scams and fraud. Just make sure that, you know, the more you report, the better. 

Because those— those government entities, they do monitor this type of stuff. You’re not the only one submitting these scams. And if enough people kind of report their information, then it’s all the more likely that those scammers will eventually be brought to justice in some way. 

So if this has happened to you, thank you for sharing your story. I super appreciate it. For everyone else, be careful out there. Protect yourself and know that there are people trying to take your money and your information. Not to get too tinfoil hatty here, but just— just tread lightly when it comes to issues of personal finance. Because I do want y’all to be safe.

I think that’s it. Thank you for listening. Go and do something that makes you smile. Me personally, I’ve got a chocolate jar in my office. Probably gonna be digging on through that and getting me— getting me some little chocolatey treats and a cup of coffee to, uh, brighten my mood. 

Hope you have a great day and that this episode wasn’t too depressing. OK, bye. I love you. 

END CREDITS: I hope you enjoyed this episode of the Young Scrappy Money podcast. If you want to read about my work as a financial advisor and financial coach, you can do so at That’s Thanks again for listening. 


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