Financial fraud has been in existence even before the ubiquitous availability of the internet and digital financial solutions. Helpful as these have been with regards to comfort and speed for users of financial products, they have increased the level of exposure to swindling schemes. Here, scammers take advantage of the newly increased level of autonomy held by customers in addition to their improved techniques. They use these to cart away with millions of dollars yearly. Thankfully, financial institutions have been working towards providing protective measures for their clients.
Some of the Most Common Financial Scams
Scam Phone Calls
Random phone calls from “so-called” government agencies claiming that you owe some taxes or have unpaid parking tickets usually point to scam. These scammers claim to be calling
from the Internal Revenue Service or other local law enforcement agencies. With solid scare tactics, their goal is to get you to divulge private account information. When they’re this information, they are able to empty your accounts in no time.
In this method, the scammers send a calculated email from a financial institution that may be your bank or insurance company, requesting an upgrade of account information. Banks would usually have you come down to their office for such changes to be made to your account. Hence, this is a red flag.
If a scammer is able to lay their hands on a lot of your personal and financial details, they can do a lot of hard work with your identity. In addition to unauthorised charges being deducted from your accounts, they can create new accounts in your name using your date of birth, Social Security Number, etc. These accounts can be used to perpetrate a lot of evil in your name including tax identity theft, thereby making it hard for financial institutions and law enforcement agencies to help you.
Social Media Scams
Social media has also become a fertile ground for scammers to sow their seeds. They obtain information about the movement and lifestyle of prospects and use these to rip them off their money. They send random messages posing as brands that provide the services that their prospective victims would require. They also use calls for charity donations that cannot be monitored or tracked.
How to Detect and Avoid Scams
Financial advisors are now able to equip their clients with information and techniques that make it harder for scammers to succeed in duping them. This is a new way of adding value to their client relationships and is in the interest of both parties. Here are some ways to avoid financial fraud in the digital age.
A scammer’s only edge over his prospective victim is what they know that they do not know. Hence, it has become operative for client’s to get equipped with necessary information on how to identify scams and differentiate them from real messages or offers. Regular classes exposing the techniques used by scammers. Topics on cyberhacking, firewall installation, warning signs, and latest scams.
Financial Advisors Role in Fighting Fraud
Financial advisors should let clients know that no matter how genuine emails or texts from financial organizations or the Internal Revenue Service may look, it might be a scam. Clients should ensure that they call the numbers on official websites to confirm if any such information was authorised to be sent to them. Taking the step to confirm will save one from a lot of unseeded headaches.
Taking Advantage of Protective Features
Financial institutions provide customers with different layers of security options which they should take advantage of. The more layers of protection such as PINs, biometrics, and two factor authentication enabled on an account, the harder it is for scammers to succeed.
Financial fraud has become even easier with the widespread availability of the internet. Financial organisations and clients must be equipped with necessary basic information to escape the traps of scammers.