• Donna Sovie

5 Ways to Prevent Personal Financial Fraud


From identity theft to investment fraud, financial fraud comes in many forms. While on the one hand, advancing technology means heightened security, on the other hand, it also means fraudsters have a plethora of tricks up their sleeves to steal your money and assets.


So, how do you protect yourself and your loved ones from financial fraud? Much of it has to do with remaining careful and vigilant with your personal information and money. Follow these five tips to know what to look out for to protect your hard-earned funds and assets.


Safeguard Your Personal Information

Step One of preventing identity theft, perhaps the most common form of financial fraud, is to keep track of your user IDs, passwords, and PINs–anything connected to your financial information and assets. Keep them secure and update passwords and PINs regularly.


Never give out sensitive personal information over the phone. Remember, legitimate financial institutions and law enforcement would never call you to ask for your passwords or PINs.


We also have to watch out for social media and email phishing scams today. For example, a seemingly innocent post shared by a random Facebook user might say something like, “My family’s first dog, Duke, recently passed away. To honor our pets, what was your first pet’s name?” The name of your first pet is a standard security question, so scammers frequently use this method to gather the information that would allow them to hack into a victim’s accounts.


Or maybe you received an email that appears to be from Netflix, but it wants you to take a “survey.” Check the email address and examine the email closely–many scammers pose as major brands to gather your personal information via email surveys.


Be Wary With Money Transfers

In another frequent form of financial fraud, shady individuals and organizations will impersonate financial or governmental institution representatives to extort money from you. Scam artists typically contact victims via phone, email, or texting. Many even use technology to mask their caller IDs and email addresses, so the correspondence appears to be from a reputable organization or person.


Legitimate financial institutions have very secure, specific processes for transferring money. When someone calls you requesting money, verify their identity by contacting the relevant company or agency directly. Note the phone number they call or text from and check their email address. If it seems suspicious, chances are your instincts are correct.


Be Careful What You Click On

On a related note, watch what you click on! Don’t just click on any link or download any attachment from an email or website, especially if it asks for money or sensitive information. Take a closer look at the email, link, or website. Look for obvious red flags like glaring typos or odd URLs. Hackers use these techniques to infect your computer with a virus or obtain your personal information.


When you make a transaction online, beware of doing so over public WiFi networks, which make it even easier for scammers to snag your sensitive information.


Invest Wisely

This tip is twofold: Be smart about what you invest in and who you invest with! Thanks to improved technology and security measures, investment fraud is not as prevalent these days–but can still occur.


First, don’t be enticed by an investment opportunity that promises a great return. If it sounds too good to be true, it most likely is! Scammers often tempt eager investors with lofty promises of fast, significant returns on investment–but these often turn out to be Ponzi schemes, unregistered investments, and other illegitimate deals. Legitimate investments always carry a level of risk, so be wary of those guaranteeing massive results.


Second, ensure you are trusting your money with a reputable financial advisor and have online access to check your money at all times. A fraudulent advisor could print and send fake statements to investors, Bernie Madoff-style. Today, you should receive statements and access to your account from the third-party investment company that houses your investments, meaning you can check your monthly statements and verify any withdrawals.


Monitor Your Accounts

Check your bank accounts, credit card statements, and bills regularly so you can spot suspicious activity promptly. After all, most banks and credit card companies only give you a specific time window to dispute charges. With online access, it’s easy enough to check your accounts every few days. If you prefer paper statements, review them closely every month.


Follow these tips to protect your accounts from identity theft:

  • Keep an eye out for a string of small charges: This is often an indicator that a hacker is testing to see how closely you’re monitoring your bank account.

  • Don’t sign the back of your credit or debit card: Instead, write “See ID” and provide it upon payment.

  • Get a good shredder: Ideally, get a cross shredder and destroy any financial documents before throwing them away.

  • Avoid giving out your social security number: Skip the social security number if it’s not required, or list only the last four digits.

  • Set up a fraud warning on your credit reports: The service will contact you if someone attempts to create a fraudulent account with your information.


If you do suspect financial fraud on any of your accounts, contact the institution and authorities immediately. This will boost your chances of getting your money back and help identify the fraudster.


As long as you follow these steps to avoid schemes like investment and identity fraud, you’ll protect your and your family’s wealth. If you have more questions about preserving your hard-earned money or accounting in general, contact us at 603-505-2368 or schedule a free consultation today!

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