Today, Explained - A scam cost me $31k and a pool

Episode Date: November 10, 2023

Writer Devin Friedman has wanted a pool since he was a kid. As an adult, he saved tens of thousands of dollars to install one, but nothing went as planned. He hopes you can learn something from his story. This episode was produced by Hady Mawajdeh, edited by Amina Al-Sadi, fact-checked by Laura Bullard, engineered by David Herman, and hosted by Sean Rameswaram. Transcript at vox.com/todayexplained Support Today, Explained by making a financial contribution to Vox! bit.ly/givepodcasts Learn more about your ad choices. Visit podcastchoices.com/adchoices

You remember when you were young and there were the kids who had a pool and then there were the rest of us? Devin Friedman was the rest of us. Yeah, I kind of wanted a pool always. I always thought it would be amazing to have a pool. That was the height of luxury to me. It didn't work out when he was a kid, but then he got older. He had his own kids. Basically, we want to be the house that everyone comes to, especially for our kids. Basically, we want to be like the house that everyone comes to, especially for our kids.

It's like if you can have like the house that people come to, it's like you're always looking to make your kid's life a little bit easier and better. And we felt like that could happen. But something unexpected happened on Devin's path to luxury living. I learned that I'm an idiot. I learned that our economy and the way that we function within it is predicated on blind trust. And that you're just sort of playing the game of probability. One man's quest to be cool and what we can all learn from it, coming up on Today Explained. The all-new FanDuel Sportsbook and Casino is bringing you more action than ever. Want more ways to follow your faves? Check out our new player prop tracking with real-time notifications.

Or how about more ways to customize your casino page with our new favorite and recently played games tabs. And to top it all off, quick and secure withdrawals. Get more everything with FanDuel Sportsbook and Casino. Gambling problem? Call 1-866-531-2600. Visit connectsontario.ca. Today is gonna be explained to you. Basically, we have these friends, Bobby and Eric, who like always have like a new house

that they bought, renovated and are about to sell. And it's always really, really nice. And we're always like, oh, if we could just like, I wish we lived in Bobby and Eric's house. They have like really good taste and they don't have like baby barf on their couch. And they had installed several pools at several of these houses that they had bought. And this was like their secret was like, there's this guy that we know who does this certain kind of pool that's like way less expensive than a regular in-ground pool, but it doesn't look less expensive. It's sort of like a hack. Devin Friedman is a journalist. He's not a pool guy. The first thing you got to do when you want to pool is find a pool guy. So go with our guy. He's a little weird, but that's worked out for us.

So we visited him. We figured out how big we wanted it. We basically were like, let's copy Bobby and Eric's pool completely. Have it look exactly the same. Give us the Bobby and Eric special. And he said, yes. Who is this guy? Well, I don't want to say his real name because he

actually probably didn't do anything wrong. We'll call him Gary Kruglitz. Gary Kruglitz. Gary Kruglitz is a man who like, seems like he was like frozen in amber in like 1968. And like, just like popped out and is like surprised that like cell phones exist he he wears like short sleeve dress shirts and a robust mustache and it's an answer he's like he's like the kind of person who answers his phone yellow that's very descriptive yes that's him eddie builds pools he builds pools. He builds really nice pools that cost less than you think they did. Yes.

So Gary is very busy. We're in late in the pandemic. Everyone's trying to renovate their house that everyone's moved out to the country and is bringing their obnoxious city ways to the quiet countryside and being obnoxious. And we were among those people doing that so we were mostly worried with gary about like when can you do this because we knew it was going to be at least six months and then the season's so short that if you don't get that construction started in the spring you will not have your pool ready for that summer and then it's just like you might as well just install it the next year.

So we were like really like, you know, being really obnoxious and being like, when are you going to get started? When are you going to get started? Like, you know, we gave him like a very small deposit when we signed the contract in the winter. And then he was like, okay, well, you're first in line. And so did he start building your pool in springtime? No, he like disappeared. Like he was building someone else's pool.

My wife got really mad because she was like, you promised that we would be the first pool of the season. You promised! We were, you know, emailing and emailing and emailing him and calling him all the time. And he wasn't returning our phone calls or emails. So we were like very anxious about that. And then suddenly he did return our emails.

He emailed and he's like, OK, you're next. Things are crazy. It's the pandemic. A lot of the bank branches are closed. The guys that are working for me are not able to go to the bank. So we're ready to get started. We'll be there in a week. Our materials just came in. And, you know, can you send us the deposit that we agreed on via Zelle and gave us, you know, some Zelle credentials for us to sort of do so-called peer-to-peer payment to him. Okay. And I'm sorry to pry, but what did he quote you for this pool? What's the deposit you agreed on? The deposit was, I think, about $30,000 or $35,000, which is like a lot of money to us.

It was not pocket change. To most people, I should add. Yes. I don't like to think about how many hours that is of work. I don't like to think about how many hours that is of work. I don't like thinking about that. So he asks for 30-ish K, 35 K. And I imagine you send it to him because he's your pool contractor. Well, you know, it's not, I don't know if you've used Zelle before.

I have, yeah. You can't just send $30,000 in one fell swoop on Zelle. So he's like, okay, well, you know, the max is 5,000. So like, well, the first day he was like, send 3,500. And then it was like 5,000, 5,000. And then, you know, we have a little more materials, 3,500, blah, blah, blah, blah. Over the next, I think 11 days, if I remember correctly, we end up transferring about $31,000, $31,500 to him, I think. As you're sending these Zelle payments, many, many Zelle payments numbering in,

you know, the $3,500 to $5,000 range, at any point, are you hesitating? Or are you just smashing the send button? You know, I was worried that we did not have any documentation from him that he had received this money, that he could be like, well, I never got the money, you know, sorry. I don't know what you're talking about. So we said, can you please send us a receipt for the money that you've received? And he said, yeah, for sure, you know, all on email. An hour or two later, he said, you know, I'm at a job site. Give me an hour.

I'm going to, and I'll just pull over. I have my receipt book with me. I get a receipt on like, you know, the letterhead of this company. And it's a receipt for how much money we'd paid him and has his name signed at the bottom. And so we're like, okay, well, at least he, at least we have a documentation now that we've paid him the money. And it looked legit.

You thought you were in good shape. Yeah. Yes. It never really occurred to us that we were not in good shape. And did he come over and start building your pool? Well, the day he said that he was going to be there, we got an email that morning. Yellow! That was like, I'm on your road. Send the last

payment. I'm there. You know, we'll be, I'll see you in a few minutes. Hours pass. He's not there. We start calling his office. The woman who answers his phones is like really annoyed. Okay, Devin, we've heard from you before. We know you're calling a lot. Gary will get back to you as soon as he can. We keep calling, we keep calling, we keep calling. Finally, we get him. My wife is talking to him and she says, where are you? And he's like, what do you mean? She's like, you said you were on our road. You emailed us this morning and you said you were getting started and that you were on our road. It's been five hours since you said you were on our road. You emailed us this morning and you said you were getting started and that you were on our road. And it's been five hours since you said you were on our road.

It's not that long. And he just said, I haven't emailed you for a month. And my wife literally fell onto the floor in the kitchen and looked at me and she said, Holy shit! Thank you. Wirecutter AuraFrame to make it easy to share unlimited photos and videos directly from your phone to the frame. When you give an AuraFrame as a gift, you can personalize it. You can preload it with a thoughtful message, maybe your favorite photos. Our colleague Andrew tried an AuraFrame for himself.

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Hello? Today Explained is back with writer Devin Friedman. All he ever really wanted was a pool, but on the way to getting one, he zelled somewhere between 30 and 35k to whom exactly? Last we heard, not his contractor. His poor wife's fallen to the floor, and...

Well, it's sort of like, suddenly everything falls into focus it's like or to mix a metaphor like the scales fell from our eyes and we were like you haven't emailed us we've been emailing with you and sending you money we must have been sending someone else this money. And we talked to him and we say, you know, here are these email addresses of the people that you gave us to Zelle money to. And he's like, I've never heard of those email addresses before. And I'm like, can you look in your email? Like, do you see it? And he's like, I don't see any messages from you. Oh, wait, here's one. But, you know, what had happened is that someone had hacked into Gary's email. He has an AOL account. So you can tell sort of

what generation he's from, how tech savvy he is. Someone had hacked into his email account and was sending and receiving emails from his account as him, but having us pay some people who Gary did not know and we did not know. And Gary was never aware, you know, they would send these messages and delete them quickly enough that Gary would never realize that they were in his email. You know, there are a bunch of ways you can hack into someone's email, as we all know. You know, it's usually just low-hanging fruit sort of thing. Like, who are the least savvy people we can get to give us their credentials? And then we're into their email

and then we can start emailing all their clients and saying, hey, can you sell us a bunch of money? Okay, so you just took a shot at Gary Kruglitz again. And I think it's only fair that we take a shot at you. What were the email addresses to which you and your wife were sending thousands upon thousands of dollars? which, you know, I mean, it's like, it's not even, it's obviously like the 17th Breezy that wanted to be called Breezy on Gmail. They had to come up with like, okay, Breezy's not available. Breezy 1 isn't available.

Okay, original Breezy. That's what I'm going with. Oh, Sunshine Yasmin was the other one. Sunshine Yasmin and original Breezy. Yeah. You sent a small fortune, a salary, a year's salary for a lot of Americans. Yes. If you consider like after taxes, yes. To Original Breezy and Sunshine Yasmin. At no point did you and your wife take a look at each

other and be like, who are these people? No. What do you think happened there? Well, I will say that contractors in general are sketchy. Fair. One of them used to be president. He was a little sketchy. And they're well known for skirting various rules. And you often want them to be kind of sketchy people who skirt the rules because it benefits you. Oh, you know, you don't really need to get a permit to do this work. We can just like go around the permitting system or I can charge you less if you make this checkout to my wife instead of me or pay my workers or whatever.

So I think there was some assumption that these were people who worked for this guy. And this was his way of not having to pay income tax on the money that we were paying him that he was going to then have to pay to his workers. So when Gary Kruglitz finds out that you got scammed for the entire sum of money that you were meant to give him, 35K or so, what does he say? I wouldn't call him an emotional man. He was just like, okay. All right. Talk soon. Okay. So at this point, we're in July, peak summer.

You've got no pool. You've got an indifferent Gary. Someone somewhere is enjoying a summer breeze with all of your money. What do you do? Summer breeze makes me feel fine. A summer breezy. Sorry. My bad.

So we get on the phone and get some client services people on the phone for our bank. We call up every law enforcement official we can think of. You know, we decide, like, let's not be—well, we already are victims, but let's not be total victims. Let's go after it. Let's get our money back. Exactly. The FBI still has not returned my call. Not kidding.

How long ago was that? Like over a year? It's been two years. Oh, no. That's sad. Yes. So local law enforcement was like the most responsive, but it's like a very small town in western Massachusetts. I think there's three policemen. There might be two. And so like, let's just say they don't have like an internet crimes division. You know, the guy came and sat at our kitchen table and pulled out a notebook and wrote his first question is, who is Zell? I saw him write that on the thing. So I'm like, okay, this guy might not be the guy who cracks the case. We went to the state police and the state police

said, oh, well, it has to be the local police. And then if they call for help, then we'll get involved. And then I sort of put on my journalist hat because, you know, I've been a journalist for a long time. And I was like, okay, I know that people respond to calls from the press. So I'm just going to say I'm calling from the press. Nice. Obviously, I did write about it. So I wasn't lying. And I got more response than Chase. I thought that Chase would be like I would get it like, you know, they would just like connect my phone call to like the CEO and everyone would, you know, we would all be in on it and we're all going to chase down these people. They're called Chase after all. Exactly.

But it was more like I called to like report a lost credit card. It was like, they're like, okay, well, we'll have someone from the team get in touch with you. But when I called their media relations department, they escalated it. And as a journalist, I talked to a few people who worked in law enforcement. One guy was the head of cyber crimes for the U.S. Attorney's Office in the Eastern District of New York. And he was basically like, unless you are talking about 10x the money that you lost or more, no one is going to look into this. The volume of fraud that's happening is so great that there just isn't the manpower to even investigate. $30,000 is basically like walking into the FBI

and saying, I lost $10. Like, they do not give a shit. Unless you can tie it to some organization that's doing it at a bigger level level or you got lost a million dollars. It's just a manpower problem. Devin, I know we've been laughing a lot because you seem to have a good sense of humor about what went down, but I have a serious question for you. Who is Zelle? Zelle is a fast, safe, and easy way to send and receive money with friends, family, and others you trust, no matter where they bank. So Zelle is what is known as a peer-to-peer payment app, and it is owned by a consortium of the largest banks in America, Bank of America, Chase, Wells Fargo, PNC, I think seven of them,

if I'm not mistaken. When money goes into your account directly, you can live delightfully. So, look for it in your banking app. And where did this company come from? You know, basically, it was another case of the internet causing a race to the bottom. Peer-to-peer payment apps launched in the United States, you know, PayPal, Venmo, Cash App, stuff like that. It's time we let our happy hours end happy. Now we have Venmo, the app that makes paying your friends back more glorious than ever. And they were seen as a threat to the big banks because these big banks couldn't do the same thing.

You couldn't pay your friend $10 instantly the way you could with Venmo. So they felt like they had to come up with their own peer-to-peer payment app in order not to get their lunch eaten by, you know, FinTech. And so they launched Zelle and it became incredibly popular. I figured like Venmo is the thing that my friends use. So I was like, Venmo must be the biggest. No, Zelle is like way, way, way, way, way bigger than Venmo or Cash App. I imagine at some point in this story, you call Zelle and say, I need my $31,000 back. I mean, I just challenge anybody to find a phone number for Zelle. Oh, no.

It's not easy. But I went through their press department and ended up speaking to someone at Zelle who was really nice, but was basically like, we have no one available to each, you know, like for letting me send cash to you is not like a revenue producing transaction for them. There's no commission. Not really. No. I mean, they just don't want other financial technology companies to take their clients away from them. So that's why they have to do it. So, you know, if they had to start paying back everyone like me who lost money, then it wouldn't really be free anymore, probably. However, we're used to consumer protections when

we make financial transactions. And I think it's a real shock to people to find out that there are none for Zelle. The banks market Zelle as, quote, fast, safe, and an easy way to spend money, end quote. But Zelle is not safe. When someone is defrauded, you claim that's the customer's problem. There are some legislators, unsurprisingly, Elizabeth Warren, who, you know, is the chief antagonist of the banking industry in America, is trying to push legislation to get these transactions insured and protect customers. We could fix that problem right now in this committee. If you would all be willing to say, or any of you would be willing to say, if a customer is defrauded on Zelle and they come and complain to the bank, then the bank will make it good. Who is willing to make that commitment to your customers?

The banking industry has like some lobbying organization called like the Bank Institute of America or the Money Foundation or whatever. And they do their own research that's like most 99.9% of these transactions are totally safe. But like when you think about how much money is being moved through the system, like 0.1% of billions and billions and billions of transactions that are not safe. And do we know how many of those result in fraud? The banks are under no obligation to disclose that. So I asked a lot of banks a lot of times for numbers about how much fraud goes on on Zelle, and they definitely were not interested in telling me. So Zelle is a dead end. They processed 2.3 billion payments last year, but apparently if any of those go south, they're not going to help you.

No. How about your bank? No. Did they feel any sympathy for you? I think that they looked for it. Eventually, we got an email from them saying, we found, you know, $235 in one of these accounts. $235? Yeah, $235. We've contacted the other institution. We'll transfer it back into your account. That's our, we wash our hands of this. So did you buy like a kiddie pool? I think we bought bottles of tequila with that money, drowned our sorrows, saved for another year, sold some stock, and bought a pool the next year do you have a pool now we have a pool you're a pool guy we pay twice we get once that's our motto at my house

i gotta know who did you hire to build your pool gary hello gary kugl. He's the only game in town. Berkshire's number one in-ground pool man, Gary Kruglitz. How did you pay him? Check. Devin Friedman, pool guy. You can read about his journey at Business Insider. His story is called The Great Zell Pool Scan. We reached out to Zell for comment on Devin's story and our episode. Here's what they said. Zelle is designed to help protect customers and stop scams before they

happen. We have a strong set of technology controls and practices in place today and continually enhance those controls. Our Zelle user service agreement warns consumers to only use Zelle for sending money to family, friends, and other people they know and trust. The user experience includes a series of alerts such as that the payment is irrevocable. But criminals are working every day to perpetrate scams using any payment method they can. And we can't solve this threat alone. Protecting U.S. consumers from criminals requires a wide range of solutions. Our show today was produced by Hadi Mawagdi, edited by Amin Al-Sadi, fact-checked by Laura Bullard, and mixed by David Herman. But wait, more people work here. Avishai Artsy, Amanda Llewellyn, Miles Bryan, Halima Shah,

John Ahrens, Victoria Chamberlain, Patrick Boyd, Siona Petros, Rob Byers, Isabel Angel, Matthew Collette, Miranda Kennedy, and as if you could forget, Noel King. We didn't use any music by Breakmaster Cylinder today. Today Explained is distributed by WNYC. The show is a part of Vox, which is totally free. Thanks in part to contributions from our listeners. Thank you. you