It’s happened to all of us one way or another: You suddenly receive an email saying that your credit card information has been compromised. You need to contact the bank to verify your information due to suspicious activity.
Or you get a call that your grandkid is in jail and they need bail money as soon as possible.
Maybe it’s good news – you just “won” the Publisher’s Clearing House Sweepstakes and they just need your account number to wire you the money.
These are all examples of real-life scams. As technology becomes more sophisticated, so do scammers. It’s getting more difficult to discern between legitimate communication and nefarious hackers trying to rob you of your money.
There are many companies dedicated to stopping these types of scams; however, fraud can be hard to combat. One reason for this is because the victims are too embarrassed to report the crime.
Let’s first walk through important information you should know about cyber scams and frauds. Then, we’ll take a look at how you can avoid them. Finally, we’ll go over a few simple tactics to use if you’re the victim of fraud.
Fraud is Common
Before evaluating ways to protect yourself and your money against digital robbery, it’s important to note that this is a common, widespread problem faced by people all over the world.
According to a study conducted by the Centre for Counter Fraud Studies at the University of Portsmouth, 65- to 74-year-olds are 54 times more likely to be victims of fraud or computer scams than they are to be physically robbed.
Newly released data shows that the Federal Trade Commission received more than 2.1 million fraud reports in 2020 alone. The same data found that imposter scams — when a fraudster pretends to be someone in need to trick you into sending them money — were the most common types of fraud reported to the agency. 1 in 5 individuals reportedly falling victim to this particular scam.
Here are some other statistics to be aware of:
2020 Top 3 Scam Categories
- Identity Theft
- Imposter Scams
- Online Shopping and Negative Reviews
2020 Reported Fraud Metrics
- Reports of Fraud: 2.2 Million
- Reported Losses: $3.4 Billion total
- Median Losses: $308 per reported incident
Fraud is a prevalent problem in today’s digital age. You can protect yourself and your savings by surrounding yourself with trusted professionals.
Now, we’ll cover different types of scams and how to identify them.
Cyber Scams and Red Flags
In order to protect yourself, it’s good to learn about the different types of scams out there. Here are some of the most common schemes:
Ponzi schemes, advance fee fraud, pyramid schemes, and market manipulation fraud are all examples of Investment Fraud. There’s probably a catch if someone you don’t know very well offers you an opportunity like:
- Low-or-no-risk investments with guaranteed returns
- Complex business strategies
- Unregistered securities
Elder Fraud criminals go after millions of elderly Americans each year. Con artists gain a victim’s trust, then when their victim’s guard is low, these criminals strike.
Some of the most common schemes include:
- Romance scams
- Sweepstakes/charity/lottery scams
- Tech support scams
- Grandparent scams — bad actors pose as a relative claiming to be in immediate financial need
Charity and Disaster Fraud
These scams take advantage of individuals’ benevolence and are especially rampant after high-profile disasters. Charity and Disaster Fraud is when a fake organization asks for donations to help combat a national emergency. It can also be as insidious as false contractors offering aid with the intent to run off with the insurance money.
While COVID Scams live under the umbrella of “Charity and Disaster Fraud,” I want to highlight this particular scam. Scammers live off of vulnerability and fear – both of which are running high due to the pandemic.
Scammers try to obtain personal information like your social security number. If you receive an unsolicited phone call or message asking for sensitive information under the guise of COVID Aid, make sure to think critically. Always ask to know who is calling and which organization they’re representing.
You may hear a lot about big companies experiencing “ransomware attacks” lately. Did you know that these attacks usually occur through an individual employee’s unprotected computer?
Phishing schemes and Ransomware attacks usually happen to individuals who are not vigilant with their software updates and internet use. Hackers access your data through corrupt files and links sent to your email inbox.
They’ve become so savvy that they can create email accounts and messages that impersonate brands and people you trust. This is why it’s very important to double and triple-check the spelling of email names, links, and websites before you click on them.
A good rule of thumb is that if an email, link, or file seems “off,” it probably is.
There are endless opportunities for those with bad intentions to take advantage of good people. The shame and silence surrounding being scammed just adds more fuel to the fire.
Ways to Avoid Being Scammed
Because so much scam and fraud now occur on the internet, it’s important to learn good “cyber-hygiene.” Be sure to keep your passwords protected and avoid clicking on compromised links.
Here are a few other things you can do to protect yourself from being scammed:
- Avoid opening email attachments (or hyperlinks) from people or brands you don’t know.
- Double-check to make sure links don’t have odd spelling. For example, you may get an email notification claiming someone you know tagged you in a “Facebook Photo” only to see later “Facebook” was spelled with three ‘o’s and you got phished.
- Never provide personal information in response to an unsolicited email, robocall, or robotext. In fact, it’s a good practice not to provide any personal information digitally. A trusted company will give you safe options for providing personal information including an in-person visit or calling them instead of them randomly calling you.
- Resist the pressure to act quickly. Scammers create a sense of urgency to produce fear and lure victims into immediate action. If you feel there is immediate danger to you or a loved one, it’s better to call the police.
- Be cautious of unsolicited phone calls, mailings, and door-to-door services offers.
- Never give or send any personally identifiable information, money, gift cards, checks, or wire information to unverified people or businesses.
- Trust your gut: If something seems a little off then it probably is.
- Anyone can make a sleek website these days. Before sending money to a company, charity, or person, double-check that there are legitimate reviews of their services.
Even with the best “cyber-hygiene,” you may still find yourself as the victim of a scam or fraud. Here are some steps to take if this happens.
Steps to Take if You’ve Been a Victim of Identity Fraud
Many cybercriminals are trying to get your identity. If they are able to get your social security information and your bank account numbers, there are endless opportunities for them to cause headaches and hassles.
Here are a few activities they can pursue with personal information:
- Filing state and federal tax returns in your name
- Getting unemployment
- Signing up for medical care and prescription drugs
- Taking on the identity of a deceased person
If you or a loved one are in this unfortunate position, here are steps to take back control:
- Go to IdentityTheft.gov Here, you can report that your identity was stolen and also start to recover from this crime. This website will make sure you cover all your bases and are fully equipped with the information needed to move forward.
- Check your credit reports to confirm you’ve had a fraudulent account opened in your name. If this is the case, immediately notify all four credit report organizations (Equifax, TransUnion, Experian, Innovis) of fraud. After these four organizations have been notified, freeze your reports. You can do this by phone, mail, or online.
- File a report with your local police.
- Notify the Office of the Inspector General (the Social Security Administration) via their fraud hotline at 1-800-269-0271 or submit a report online at oig.ssa.gov. You should also alert the Internal Revenue services at 1-800-829-0433.
- Contact your state taxing agency. All agencies can provide instructions on how to address the situation.
- Alert any organizations that have access to your finances, including financial advisors.
- Finally, be sure to notify your medical insurance providers.
*Source: “Simple Safeguards: How to Stay Safe from Identity Theft and Cybercrime” by Jeff Lanza
It’s important to remember that there is no shame in being scammed. Sophisticated criminals have fooled even the most vigilant individuals.
It may seem like there’s a lot to learn when it comes to fraud and scams. Once you understand a few key pieces of information, you’ll feel empowered to protect yourself.
Here are the most important things to remember:
- Being a victim of fraud or a scam is never your fault and isn’t something to be ashamed of
- If you become a victim, report the incident immediately
- Fraud and scams can happen via email, telephone, or in-person
- Avoid disclosing personal information with anyone you don’t trust
- If something seems “off” or suspicious, it probably is
Are you interested in learning more about how to protect yourself from fraud? Read on.
Learn How to Protect Yourself at our 26th Annual Resource Breakfast
For more helpful tips on how to protect yourself against cybercrime, we would like to invite you and your guests to join us at our 26th Annual Resource Breakfast on January 22, 2022. We will feature former FBI special agent Jeff Lanza as our keynote speaker.
Jeff is one of the leading experts on how to protect yourself from cybercrime. He has provided over one thousand presentations on the topics like:
- Crisis communication
- Identity theft
- Body language
His clients include 20th Century Fox Entertainment, Citigroup, The Young Presidents Organization, American Century, Hallmark, and others.
Jeff will present a program on identity theft prevention that will inform and educate you on what to look out for when protecting yourself against cybercrime.
Save the date for our 26th Annual Resource Breakfast on January 22, 2022. Registration will open shortly. More details to follow.
Carver Financial Services Has Your Back
From technological safeguards to employee policies and operating procedures, we maintain constant vigilance when your privacy is concerned.
Carver Financial Services recognizes the trust you place in us when you disclose personal information. One of our core tenants is maintaining that trust by ensuring your information is secure.
We proudly work with Raymond James who has a dedicated Privacy Office committed to the privacy and protection of the personal information you have entrusted to us.
Both Carver Financial and Raymond James take very proactive measures to protect you. From technological system monitoring 24 hours a day, 365 days a year to utilizing only the best protection technology, including:
- Virtual private networks
- Penetration/vulnerability testing
- Top-of-the-line firewall and antivirus technology
Cybersecurity is crucial to the framework of Carver Financial Services. You can rest assured that your information is safe with our team of talented individuals. Ultimately, though, you must also be vigilant about protecting yourself against the social engineering prevalent in the digital age.
Randy Carver, CRPC®, CDFA®, is the president and founder of Carver Financial Services, Inc., and is also a registered principal with Raymond James Financial Services, Inc. Randy has more than 32 years of experience in the financial services business. Carver Financial Services, Inc. was established in 1990 and is one of the largest independent financial services offices in the country, managing $2.1 billion in assets for clients globally, as of July 2021. Randy and his team, work with individuals who are in financial transition as a result of divorce, retirement, or the sale of a business. You may reach Randy at email@example.com.
The information contained in this report does not purport to be a complete description of the securities, markets or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Any opinions are those of Randy Carver and not necessarily those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change without notice. Links are being provided for informational purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors.