Summary/TL;DR
Financial scams of all colors are abundant in today’s digital age. The most common of these attacks involve individuals fraudulently claiming to be either a close family member or a representative from a well-known and trusted organization in order to trick their victims into giving up sensitive personal information or even send them money. Taking the time to secure yours (or any technologically naïve family member’s) digital fingerprint and abiding by a strict “digital code” in which you “never trust, but always verify”, are essential to protecting yourself, your wealth, and your family.
Introduction
The proliferation of internet access has, in general, made the world far wealthier, interconnected, and secure. There is, however, a dark side to technological advancement. As easily as you or I can connect our devices to the internet, fraudsters and scoundrels can also connect and utilize it for their own nefarious objectives. Many of their schemes are thankfully avoidable as long as you can identify them ahead of time, and having a general awareness of common tricks is essential to ensuring that you never fall victim.
Today’s post outlines some of the most common scams that people of retirement age are targeted for and concludes with best practices for securing your online financial presence.
Phishing
If you’ve ever received a text or email that looks like it’s from a bank or popular merchant (PayPal is a common example) requesting that you verify payment information, login credentials, or personal information, then you’ve been the subject of a phishing scam. Oftentimes, these messages are asking you to verify transactions or login attempt that aren’t real and trick their victims into believing they’ve been hacked.
Phishing is, in my anecdotal experience, the most common scam. Fraudsters have become very sophisticated in their methods and you really can’t be too cautious these days. Recently, I’ve had clients and family members receive very convincing phone calls from people claiming to be from their bank. They somehow knew that these individuals were account holders at certain institutions and used that information to attempt to have funds sent to their account. Some of them were bold enough to make video calls and request access to their victims’ devices to login to avoid two-factor authentication requirements and geographic screening.
Ransomware
Ransomware is a software that restricts access to your devices until you’ve paid a ransom. It is commonly encountered when a link is clicked or a file is downloaded from an email or text message. The difference between phishing and ransomware attacks are that phishing is aimed towards obtaining information while ransomware simply holds your devices hostage. Both, however, commonly utilize the same means (fraudulent messages).
Grandchildren & Elder Fraud
While all of the schemes discussed in today’s post are malicious, grandchild fraud is exceptionally grotesque. This occurs when someone receives a call from another person claiming to be a grandchild (or other relative) and requests money to help bail them out of trouble. While I’ve never been a victim of grandchild fraud, I have family members who have and can speak to its effectiveness. I have a feeling that AI will make these scams frighteningly effective in the near future, as bots will be able scrape an individual’s social media profiles and other sources of internet presence to create a frighteningly realistic representation (that could even include a voice profile) to make these calls.
If this happens to you, just hang up the phone and call another family member to tell them what’s going on. They might be able to check with the person independently and confirm whether or not they actually need help. No matter how convincing it is, you can never be too careful in today’s digital age.
Imposter & Debt Collection Fraud
Instead of impersonating a close friend of family member, imposter fraud is when someone impersonates an authoritative entity, such as an IRS agent. Debt collection fraud occurs when the person poses as a debt collector and tries to collect repayment for debts that you don’t owe.
In these cases, the best thing to do is simply assume the worst, hang up the phone, and independently call the organization to verify if it’s truly them.
Avoiding Fraud and Scams
The scams highlighted above, along with countless others, are everywhere in our digital age. While knowing what the common tricks are is important, you must also take care of your personal information and strictly abide by a set of rules to protect yourself.
Your personal information (including passwords to important accounts) can be easily accessed by an experienced scammer unless it’s adequately protected. Here’s some basic and inexpensive things you can do to keep your digital fingerprint secure:
Add two-factor authentication (2FA) on every account login you have.
Use a password manager like LastPass to generate long, alphanumeric passwords.
Use a VPN on any device that connects to the internet when accessing public WiFi.
In addition to keeping your personal information safe, you need to abide by a “digital code” or set of rules that you never, under any circumstances, violate:
Never respond to a text from someone you don’t know.
Delete the message immediately.
Block the number if messages persist.
Never click on a link from someone you don’t know.
Delete the message immediately.
Block the sending address if messages persist.
Never give any information to someone on the phone who you don’t know.
Hang up the phone immediately.
Block the number if messages persist
Assume that the person contacting you is trying to scam you until proven otherwise.
Never trust. Always verify.
If someone is telling you that you made a transaction that you didn’t make, ordered a package that you didn’t order, or tried to login to a website where you don’t have an account, then it’s best to assume that it’s fake, cut off all communications, and move on with your day. And if you’re the family member of a technologically naïve individual, help them get some of the essentials discussed above setup and make sure they know to contact you for assistance if they ever get a suspicious call or message.
The importance of the above steps cannot be overemphasized, as they are essential to protecting yourself, your wealth, and your family!