How to Prevent Fraud: Cybersecurity Tips for Investors

|

About the Author

ep wealth advisors

EP Wealth Advisors

EP Wealth Advisors BlogPost 35586469125 How to Prevent Fraud: Cybersecurity Tips for Investors new EP Wealth Advisors

The rise of the internet has brought along with it unprecedented convenience. Today, we can do pretty much everything online—from accessing information in an instant and ordering food to paying bills and managing our portfolios.

Despite these benefits, the digital age has surfaced a number of challenges, too. One of the biggest challenges is figuring out how to prevent hackers from compromising your accounts, committing identity theft, and stealing your data. In fact, 3.2 million consumer complaints were filed in 2019, the highest number of consumer complaints ever recorded, according to the Federal Trade Commission (FTC).

More specifically, the FTC reported that 25 percent of fraud victims lost money in 2018. Interestingly, it turns out that consumers who are more likely to have technology skills were also more susceptible to fraud. In large part, this is likely due to the fact that the technologically savvy among us tend to have more financial apps and, therefore, a larger attack surface.

In order to protect your assets and make sure you don’t fall victim to any scams—especially with those that try to separate you from your hard-earned cash—you need to take a proactive stance toward cybersecurity, especially if you do your banking and financial management online.

What Is Cybersecurity?

Cybersecurity is the process of using technology, policies, and people to protect digital systems.

Cybersecurity is more commonly talked about in the professional world, but these days, all of us are on mobile devices, use applications, and transmit sensitive information over the internet. As such, it is more important than ever for everyone to develop a personal cybersecurity strategy that reduces the likelihood that a bad actor breaches their systems and compromises their sensitive information.

Why Is Cybersecurity Important?

When you adopt a proactive stance toward cybersecurity, you enjoy several benefits along the way, including:

  • Peace of mind: You’ll know that hackers will, at best, have a harder time accessing your systems and stealing your data.
  • More time and money: With the right cybersecurity approach, you can protect your accounts and avoid exposing yourself to risk—which reduces the likelihood that you end up being defrauded. Not only does this let you keep more money in your pocket, but it also saves you from having to spend time trying to resolve a situation in which you’re the victim.
  • A better understanding of your accounts: Do you have money stashed away in some random account you haven’t accessed for years? How much cash is sitting in your PayPal account? Do you even know? When you decide to prioritize cybersecurity, you can get a better sense of the lay of the land to become more organized and gain more control over all of your accounts.

Now that you have a better idea of what cybersecurity is and how it can help you protect yourself against fraud, let’s take a brief look at some of the common cybersecurity scams to give you a better idea of what they look like—and what you can do to avoid falling victim to them.

What Are The Most Common Cybersecurity Scams

You can’t protect yourself from cybersecurity scams if you don’t know what to look for in the first place. Although the list below is not comprehensive, it should give you a better idea of some of the common scams to look out for.

1. Stolen Passwords/phishing Scams

If someone can gain access to your accounts, they can do a lot of damage. To this end, it comes as no surprise that bad actors often try to do everything in their power to steal people’s passwords. 

One popular method for this kind of theft is called phishing, which occurs when hackers send communications that look legitimate and ask for personal information and other sensitive data—such as credit card details and passwords. According to one report, phishing accounts for upwards of 80 percent of reported “social engineering” incidents, with bad actors making $17,700 every minute from such scams.

2. Charity Scams

A charity scam involves someone calling you up, ostensibly from an organization you might want to donate to—maybe your local police union or Girl Scouts chapter, for example. The caller will ask for your credit or debit card information, with the one caveat being that the individual does not work with or represent the charity they’re ”raising money” for. If you give the info over, the bad actor might hit you with some fraudulent charges.

3. Online Bank Verification Scams

If you’ve ever received an email that looked like it came from your bank and asked you to share your login credentials, you might be the victim of an online bank verification scam. Essentially, the hackers trick you into thinking that your bank legitimately needs you to complete an action. You then click on the link in their email, get directed to a site that looks like your bank’s site, fill in your credentials, and unwittingly send them over to the bad actors.

4. Overpayment Scams

In the world of e-commerce, an overpayment scam involves a buyer sending the seller a check for more than the amount an item costs. For example, if something costs $270, the buyer might send a check for $400 to the seller. Once the seller receives the check, the buyer might ask them to deposit the check and wire the excess amount ($130, in this example) back to the buyer. Unfortunately, a few days later, the seller finds out the hard way that the check is fake. They’re out the $130, and they’re also out the insufficient funds fee.

5. Brushing Scams

If you’ve ever had a bunch of packages show up at your door—and you didn’t order them yourself, nor did your friends or anyone else you know send you a gift—you might be the victim of brushing. Very simply, brushing occurs when third-party sellers, usually based overseas, send fake orders to individuals and then write an online review that looks like it came from a verified purchaser. The problem here is that the fraudster likely has access to your personal information.

Cybersecurity Tips For Protecting Yourself From Banking Scams

The good news is that—although you can’t stop them from targeting you—you can increase the chances that hackers’ efforts are for naught. Here are some basic cybersecurity tips that can help you figure out how to avoid banking scams:

  • Make strong passwords and change them often. Good passwords should be long; contain letters, numbers, and symbols; and be hard to guess. Need some help crafting strong passwords? Check this out.
  • Don’t click on suspicious links. If something seems slightly off about an email or text message, you’re better off not clicking on a link. Check out who’s sending you the email, and study their email address to make sure it’s legit.
  • Hang up on a robocall. A human will call you back if it’s important.
  • Don’t respond to random texts. They could be sent from someone who’s trying to pull a fast one on you.
  • Keep your personal information private. Err on the side of keeping all private information secure. Generally speaking, most financial institutions will never ask for your information over email or a text message.

Use software to protect your systems. Make sure you have virus and malware protection on your computers and devices.

How To Report Banking Scams

Unfortunately, even with a strong approach to cybersecurity and an understanding of what to look for in each potential scam, you might still be defrauded. Maybe you click on a suspicious link in a moment of unclear thinking, or maybe someone sees you typing your login credentials at a coffee shop. 

Whatever the case may be, you need to know what to do in the event that you’re the victim of fraud so you can then start taking steps to remedy the situation. If you’re the victim of a banking scam, call the FTC at 1-877-382-4357 between 9 a.m. and 8 p.m. ET. You can also opt to report the scam online using this tool.

Ready To Protect Yourself Against Bank Fraud?

Let’s hope that you never have to deal with being the victim of fraud.

To learn more about what you can do to reduce the chances that a bad actor targets you successfully, check out our recent webinar,Being Cybersmart in 2023,” which explores cybersecurity and information security, why they are so important, a more in-depth review of the types of cyberattacks, and how they’ve evolved over time, plus more on what you can do to avoid being the victim of cybercrimes.

 

 

FIND A FINANCIAL ADVISOR NEAR YOU

Our breadth of coverage across the U.S. means we’re local—here to serve your needs at your convenience.