By Eileen Ortega, CTFA
Of late, it feels like I am inundated with scam emails “urgently” telling me that I need to provide my updated credit card on an account, or that an account that I have is in arrears, or some other unfounded circumstance that requires me to provide my financial information. I couldn’t understand why these emails and phone calls were ramping up, until my birthday rolled around and I realized that I’m entering a targeted group of potential victims.
I’ve always had an awareness that these criminals were out there, and being an advisor, it was my “job” to make sure that my clients were protected from these types of schemes. As such, I knew what to look for (for example if the message is truly from Amazon, then the email address of the sender would be from amazon), which made it easier for me to recognize these fraudulent attempts. I will say though, it feels much different being on the receiving end than it does helping someone else avoid these situations. Why? Emotional investment! I’m much more able to remain objective resolving someone else’s situation than I am my own. Human nature.
Given the electronic world we now live in, these scams reach much further than before, through the use of email, texting, and social media. An article published by the Federal Trade Commission in January stated that “More than 95,000 people reported about $770 million in losses to fraud initiated on social media platforms in 2021. Those losses account for about 25% of all reported losses to fraud in 2021 and represent a stunning 18% increase over 2017 reported losses”.
With a level of awareness that these predators are out there, we should be able to recognize when something does not seem on the up and up. “Phishing Emails/Texts”, as they are referred, seek to convince us to share personal information by making us think that the request is legitimate. Some techniques that are used include the following:
- The message will state that you need to “confirm your account information”
- The email will include an invoice that appears to be on valid letterhead from one of your accounts
- Provide a link to make a payment which will serve to capture your personal information
The Federal Trade Commission published a report in 2019 alerting consumers of this predatory practice and provided guidance on how to “Recognize and Avoid Phishing Scams”. The article helps to shed light on how to identify these emails, what to do if you’ve already responded to a scam, and how to report these criminals so that there can be a greater chance of them getting caught.
It is unfathomable to think that there is this much predatory behavior, but it is an unfortunate truth. Worse, the behavior goes beyond these third party scams, and often hits much closer to home. Yes, “Friends” and even Family Members can deceive us in much the same way, instead using their relationship to take financial advantage. These deceptive practices are much harder to detect, principally because we don’t want to admit that someone so close would take advantage of us.
Don’t ever let anyone convince you that your intuition is nothing but insecurities.
The stories we always hear about are the “family and friends who come out of the woodwork” when someone experiences a Financial windfall, such as winning the lottery. But this is just one example. The following are examples of events which can increase our vulnerability in falling victim to this:
- Receipt of Life Insurance Proceeds after the Loss of a Spouse
- Divorce settlement when there is no longer a spouse “controlling” the finances
- Health event when we are relying on someone to handle our finances
- Inheritance received from Family Member
How can we protect ourselves without isolating ourselves?
None of us want to adopt a mindset of “Trust Noone”. So what can we do to make sure that our desire to help those close to us is not manipulated? How do we help without falling victim to a “scam”?
- Trust, But Verify
- Our instincts are one of our most valuable resources, if we trust them. Don’t be afraid to ask questions and make sure you have all the information before lending financial assistance
- Consider the Circumstances
- Ask yourself, is it a coincidence that this urgent financial need arose just as your financial circumstances changed?
- Your Financial Security should be the Priority
- Before offering a financial lifeline to someone, it is best practice to make sure that in doing so, you are not financially impairing your own situation.
- Ask yourself-Will this change my relationship?
- There is nothing worse than money destroying a relationship. Financial hardship takes its toll on marriages, as we know, but it can also put a wedge in an otherwise solid relationship if the arrangement isn’t clear or if one person feels taken advantage of. A solid relationship can withstand most anything, but it’s important to take this into consideration.
- Get a Second Opinion
- If you are still unsure, then discuss the situation (hypothetically) with someone your trust to get their opinion on whether this is a good decision. They might tell you what you don’t want to tell yourself!
When mistrust comes in, love goes out.
We all wish for a world in which everyone is looking out for each other. A world in which we don’t have to question someone’s intent, or doubt someone’s trustworthiness. Sadly, that is not the world we live in. We can control how we conduct ourselves, but not others. As a result, thinking and acting cautiously, prudently, and in way that lets people know rely on our intuition can greatly help us to avoid potentially risky propositions.