Financial fraud is on the rise. What are you doing to prevent financial fraud from happening to you?
- According to the Federal Trade Commissionconsumers lost nearly $8.8 billion due to reported fraud in 2022.
- This represents a greater than 30% increase starting in 2021!
What are some of these common types of financial fraud?
The most common type of financial fraud is imposter scams, in which scammers pose as someone they are not to get your personal information and then use it to steal your money. Often, scammers will identify themselves as representatives of a financial institution, such as a member of the fraud department, and create a sense of urgency for you to divulge information, such as your account numbers, social security number, and answers to your questions. security questions. In some cases, scammers can obtain information simply by using voice recognition software, which means they may not even ask for specific personal information. In fact, it can take a conversion of about a minute to get enough data for a scammer to make this strategy work.
Recently, these tactics have become more elaborate through the use of fake websites and phone numbers that appear to be from a financial institution, likely contributing to the rise in financial fraud cases. Entire “fraud teams” are often involved and will transfer you between fake departments to make the experience appear legitimate and to get as much information as possible.
Once the correct information has been obtained, these impostors will call your financial institution and set up the funds to be transferred to your own account. Unfortunately for the victims of these fraud cases, the bank is not always responsible and the funds are not always returned.
Another type of financial fraud on the rise is one that has been around since the 1980s and is known as “check laundering.” according to one reportthere was an 84% increase in check laundering in 2022. This scheme is carried out by stealing checks from mailboxes and handling them in two ways before depositing the checks for your benefit:
- Certain information on a check, such as the payee and the amount, is altered by a fraudster using tools like Photoshop.
- Using the information from the stolen checks, a counterfeit check is created using the same account number but changing the payee and sometimes the amount.
What steps can you take to avoid becoming part of this statistic in 2023 and beyond?
Avoid imposter scams:
- To confirm that a person calling you is not a scammer, ask for their name and extension, then hang up and call the institution you claimed to be associated with again.
- Never provide personal information before verifying that there is a trusted contact on the other end of the line.
- If you feel like someone is keeping you on the phone for no meaningful purpose, hang up to prevent a scammer from using voice recognition software against you.
- Never click on links or attachments from unknown texts or emails.
- Regularly check your credit card, bank, and investment accounts for suspicious activity, such as unauthorized charges, new bank accounts being established, or unknown changes in account balances.
- Create unique and complex passwords for each account and device and change them regularly.
Avoid check laundering:
- Pick up your mail often.
- Close your mailbox, if possible.
- Shred voided checks.
Bottom line: Take action now to prevent financial fraud from happening to you:
Taking steps now to educate yourself about financial fraud and mitigate the associated risks can make all the difference. Take the action steps listed above to keep your information safe and out of the hands of criminals.
It may be convenient to approach a Financial Advisor if you have any questions about how to prevent financial fraud and how to get the most out of your financial life.