I recently returned from a conference where one of the sessions was on cyber fraud. By the end of the session I was curled up in a fetal position sucking my thumb. Is there anything these thieves won’t try? Apparently not. And now that they easy methods of stealing your identity are used up, they are going after your investment accounts. And the methods they are using are ingenious.
First, there is spoofing. This is where you get an email and it looks like it is from your trusted bank or other financial firm. You are instructed to login. It then launches viruses unto your computer that can steal your credentials. You just gave them the keys to the kingdom. I actually got one of these the very next day upon my return from this conference. And had I not taken a few extra steps, I could have been spoofed. What you should first be wary of is the address of the email This one was said “Venmo Official Email” but the address was not Venmo. It told me there was money waiting for me. I highly doubted there was money since I only use it to send emergency money to my son, and I couldn’t imagine he was sending me some random money. I decided to login to the Venmo App from my phone. Sure enough, no money.
The next scary tactic of fraudsters is they get into your email (generally a pretty easy thing to do) and start reading your emails, in particular, they are looking for exchanges between you and your financial professional. Perhaps you send emails monthly instruction your advisor how much cash you need. The thieves then hijack your email, send new wire instructions to your advisor hoping they will wire money without calling you. A simple fix to this is to NEVER allow your advisor to send money without your verbal instructions. We are implementing a new “verbal” password with clients so that we can be sure it is really you.
The one that really terrified me was the scammers are setting up new brokerage accounts in peoples names (Because your personal data is easy to buy) and then submitting an account transfer to your current broker, moving the asset to new firm. Selling the investments and wiring out the money. Now, most brokerage firms have systems in place to monitor these things but the simplest defense is for the advisor to call the client and confirm they are indeed transferring the assets. Many advisors won’t call because they don’t want to hear why they are being fired.
And finally, the number one scam is the romance scam. Lonely people developing long distant relationships with someone in a far away state or country. It is sad, but thousands of people have been victimized this way and it is easy to make fun of it, but they deserve compassion and help. A typical scam will be someone who will invest several weeks buttering you up. They can never meet face to face, even via skype. Then after they are convinced you love them, they will have a sudden emergency. It may only be for a few hundred dollars at first. If they get that from you, they may be emboldened to ask for more. And most folks when they realize they have been scammed are too ashamed to admit it to anyone.
Be protective of your money. Work closely with your advisors to ensure they are taking the necessary steps to protect your identity and assets.