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This is part two of a mini-series on protecting yourself from being financially scammed. You can read part one here.
There’s been a huge increase in online activity since the COVID-19 outbreak. Cybercriminals have been taking full advantage of this trend, but there are several easy things you can do to help protect yourself from being financially scammed.
I recently received a call from a loved one. “Hans, are you sitting down,” they said in a frail voice filled with emotion.
I immediately thought there was an accident or death in the family. My loved one began to explain how they were scammed out of thousands of dollars. They had called their credit card company and had reported the crime to the local sheriff’s office. However, nothing more could be done. The damage was done, and since it was an international scam, it was out of the local police’s jurisdiction.
The sad reality is that scams cheat older Americans out of almost $3 billion a year. That’s $3 billion with a “b.” Nothing is fool-proof, but this blog is to share knowledge about ways to protect yourself from financial fraud.
Protect Yourself Online
1. Safeguard your personal information
Be extremely critical of unsolicited requests for personal and/or financial information, including requests to confirm or verify your password. Let your phone go to voicemail if you don’t recognize the phone number calling you. If someone claiming to be your credit card company calls you asking for information, hang up. Call the customer service number on the back of your credit card to ensure it was not a financial scam. Search for the company’s website and contact them directly to verify the legitimacy of the request.
2. Think twice or thrice before you click
Clicking on links and attachments can result in downloading malware used to steal your personal information. It’s best to delete emails or texts from people you don’t know and trust. Never click on an unsolicited link or attachment from a company. Some of the biggest brands have been impersonated in phishing attacks, and often these attacks are difficult to spot.
3. Never use public Wi-Fi
When you use unsecured (public) Wi-Fi, criminals can intercept your activity and steal your personal information — even if you’re not accessing sensitive information like your personal email and banking account. Attackers can also distribute malware on your device and see all your past activity including logons and account information. Consider using a Virtual Private Network (VPN) when traveling such as NordVPN or privateinternetaccess.
4. Don’t respond to urgent requests
Scammers use urgency to send their victims into an “amygdala hijack.” Amygdala hijack shuts down the pre-frontal cortex, which is our rational, logical ‘executive function’ part of our brain. This causes us to act and not think.
Be extremely skeptical of any request to transfer money, make or provide payment details or confirm information. Even if it comes from someone you know, like your boss or a friend, it could be an imposter. When in doubt, follow-up with the email sender separately.
5. Create strong passwords
Choose passwords that are at least 13 characters long. Avoid using names or personal information like your birthday or ZIP code. Also, don’t use the same password for all your devices and apps — if cybercriminals got their hands on that password, they could get into all your accounts. Consider using a Password service such as LastPass or Keeper.
6. Update your software frequently to avoid Pharming
Pharming is another scam where a fraudster installs malicious code on a personal computer or server. This code then redirects any clicks you make on a website to another fraudulent Website without your consent or knowledge.
Keep your operating system and apps current to stay protected from security threats. Consider setting up automatic updates so you can benefit from beefed-up security as soon as it becomes available. Consider using a security suite such as McAfee, Bitdefender, Kaspersky, or Norton.
7. Protecting Yourself from Phishing
Phishing is by far the most common type of attack. It occurs when cyber criminals send a seemingly legitimate email urging you to verify your account, confirm your personal information, change your password or provide other sensitive information. Companies will rarely contact you this way. When in doubt, look up the company and contact them directly to verify the content of the email.
8. Safeguarding from Pretexting
Pretexting occurs when
9. Don’t take the Clickbait
Have you ever gotten a solicitation for a free movie download, streaming service or a sought after white paper? Be careful, because it may be a baiting tactic. Baiting involves offering something of interest in exchange for sensitive information like your password. Often times, clicking on the link will install malicious software on your computer, enabling the criminal to gain access to your login and other personal data.
10. Safeguarding from Vishing and Smishing
Vishing uses phone calls, and smishing uses text messages, to get you to respond to an urgent request to supposedly protect you from arrest, large fines or an account compromise. The telephone version of vishing and text messaging version called smishing relies on “social engineering” techniques to trick you into providing information that others can use to access and use your important accounts. People can also use this information to assume your identity and open new accounts. The objective is to get your credit card and account information or other personal information used to steal your identity.
- If you receive an email or phone call requesting you call them and you suspect it might be a fraudulent request, look up the organization’s customer service number and call that number rather than the number provided in the solicitation email or phone call.
- Forward the solicitation email to the customer service or security email address of the organization, asking whether the email is legitimate.
11. Never Pay with Gift Cards
Gift cards are a popular and convenient way to give someone a gift. They’re also a popular way for scammers to steal money from you. That’s because gift cards are like cash: if you buy a gift card and someone uses it, you probably cannot get your money back. Gift cards are for gifts, not payments. Anyone who demands payment by gift card is always a scammer.
Protect Your Identity
Another way people are financially scammed is through identity theft, and the most common form of identity theft is financial identity theft. This is when someone uses another person’s information for financial gain. For instance, a scammer may use your bank account or credit card numbers to steal money or make purchases or use your Social Security number to open a new credit card. There is no way to prevent all fraud, and any prevention tools are not 100% guaranteed to work all the time. However, we wanted to share the following PDF that highlights ways you can safeguard yourself against identity theft.
Protect Yourself Psychologically
Scammers are extremely good at what they do. LifePaths Counseling Center states that scammers use tactics based on human psychology to get people to miss important clues that something is not as it seems. As mentioned above, scammers often send their victims into an “amygdala hijack.” Amygdala hijack shuts down the pre-frontal cortex, which is our rational, logical ‘executive function’ part of our brain. This causes us to act and not think. Once the victim starts parting with money they are susceptible to another psychological process called “escalation of commitment.” This makes them more motivated to give more money in the belief they will get it all back.
One of the ways scammers operate is to force the person to act quickly to avoid a problem or to gain something. Another way they operate is to spend a lot of time talking with the person they want to scam to gain credibility and trust, Scammers often sound very friendly and concerned about the person they are trying to scam. They often isolate the victim by saying things like, “Your phone has been hacked, and you can’t call a loved one, because then their phone will also be hacked.” By limiting the conversation between the scammer and victim, it allows them to isolate their prey.
Protect Yourself with an Accountability Partner
Whenever one of our clients makes a request for a distribution from one of their accounts, we do our best to verify the client by calling them to hear their voice and ensure the distribution request is valid.
We also encourage our clients to call us if they suspect anything suspicious and want a second opinion on what they are seeing.
One of our first core values at Intelligent Investing is compassion. We understand that being scammed or being defrauded is one of the most stressful times in a person’s life. We are here to help our clients and be a sounding board and financial accountability partner to them. If there is anything we can do for you, we’d love to have a cup of coffee or a quick phone call with you.
Sources: © 2020 First Citizens Bank