Shakespeare Blog: View from the Lake

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Protecting Your Portfolio from Financial Fraud

Written By: Andrea Bulen, CFP®

Home Computer Scam

As financial advisors, we are repeatedly asked, “What’s the biggest risk to my financial plan?”. We of course discuss many types of risks with our clients: investment, inflation, insurance or health to name a few. Unfortunately, we are seeing an uptick in something that is perhaps a larger threat than any of the areas mentioned above.

This threat is being a victim of financial fraud, often targeted directly at seniors (although any age group is susceptible). According to the FBI, in 2021 there were 92,371 older victims of fraud resulting in $1.7 billion in losses. This was a 74% increase in losses compared to 2020.

One factor could be that seniors have become more and more tech savvy on social media and smart phones, which is a great way to stay in contact with others and keep up with current events. People were especially motivated to get more tech savvy during the pandemic. The problem is your presence on social media and smart phone means you have opened yourself up to millions of people who you don’t know, but who can get to know you intimately well without your knowledge.

In the past month, Shakespeare has learned of two individuals who were victims of scams and lost thousands of dollars in the process. Here are the common themes in both these cases:

1) The scammer met the victim online and took the time to develop a relationship with the victim. Over time the victim came to trust the scammer. The scammer didn’t feel or act like you would expect a criminal to act.

2) In both cases, the scam artists preyed on the insecurities of their victims. They manipulated them into thinking that they (the scammer) were just trying to keep them safe from financial risk.

3) The scammer offered a solution of protection.

4) As a backstop, the scammer convinced the victim that others wouldn’t understand and not to share the details with anyone else.

5) In both cases, other financial institutions tried to stop the fraud, but the scammers had prepared their victims to dismiss those warnings.

These are just two recent examples of scams our team has heard about. Many other scams exist and it is important to be aware of where they can originate from in order to be on alert. A few more examples are listed below.

Online Scams:

1) Fake emails that may appear to be from a legitimate company or financial institution, asking to log in to your account. Or an email may claim to be from the IRS regarding a tax refund.

Note: Shakespeare will never ask you to email your username or password.

2) Pop-up browser windows warning of computer viruses or advertising virus software prompting victims to buy and download a fake anti-virus program. This could be an actual virus that may open the information on their computer to scammers.

Phone Scams:

1) Scammers call and pretend to be a business or government agency.

Note: A particular concern is a scam where the caller claims to be a Medicare representative in order to get victims’ personal information. Social Security, Medicare or the IRS will never call you unless you’ve first initiated a call to them.

2) Scammers will call and describe a relative is in the hospital or otherwise in danger. They will pressure the victim to quickly wire funds to save the relative.

Note: A hospital would never require a wire of funds to treat a patient. Hang up and call the described family member or another family member who can help ease any concerns that your family member may be in trouble.

You may think, “I’d never fall for something like this.” The problem is scammers are getting better and as we age, we are more fearful. The combination of fear and age reduces our ability to discern good choices.

What can we do to protect ourselves and loved ones from being a victim of fraud?    

1) Never click online links from people you don’t know. Double check the email address of the sender. It may appear to say the correct person’s name, but the email address may be slightly (or completely) incorrect.

Note: If your email platform only shows the sender’s name and you cannot easily see the “from” email address, hover your mouse over the sender’s name without clicking anything and the email address should appear in a pop up window for review.

2) Limit the people you are in conversation with online to only those you know personally. If you are in contact with people you don’t know, never share personal information.

3) Be especially wary of groups that may create feelings of fear or anxiety. Pay close attention if there seems to be a “leader” of those groups or anyone that claims they can offer protection.

4) Make a list of your trusted financial contacts now while you are clearheaded. What friend, family member or financial advisor would you go to if you found yourself in a situation like this? If you ever have a feeling of doubt, it is ok to hang up or not respond right away to check in with your trusted contact.

5) Talk to the Shakespeare team about your trusted contact. You can also add a trusted contact to your brokerage account.

It is important to keep in mind that scammers don’t behave like a thief. They can often appear friendly and helpful, which is how they gain the victim’s trust. Talk to your friends and family members about these warning signs. If you or someone you know thinks they may have been a victim of fraud, encourage them to report it and not be afraid or embarrassed – everyone is at risk for fraud and identity theft.

Our Shakespeare team welcomes you to ask questions around the topic of identity theft. We take many steps to verify and protect client information and are annually educated on scams to be on the look out for. We are here to be a trusted contact and help provide peace of mind.