Fraud prevention involves proactive strategies to detect, stop, and respond to various forms of fraud. By staying informed and vigilant, you can protect your personal and financial information from common fraud threats. Fraud can take many forms, including identity theft, phishing, credit card fraud, and online scams. Effective fraud prevention requires awareness, vigilance, and the implementation of security measures to protect personal and financial information.
The Five Most Common Types of Fraud:
- Identity Theft: When someone illegally obtains and uses your personal information, such as your social security number, to commit fraud. For example, someone might use your Social Security number to open new credit accounts in your name.
- Phishing: An illegal activity performed by fraudsters who send emails or messages that appear to be from legitimate sources to trick you into revealing personal information. An email might look like it’s from your bank, asking you to confirm your login details, but it’s actually from a scammer.
- Credit Card Fraud: The unauthorized use of your credit card information to make purchases or withdraw funds. This could involve unauthorized charges on your credit card from a stolen card number.
- Online Scams: Schemes that deceive individuals into giving away money or personal information through fake websites or offers. Common scams include fake shopping sites or ‘too-good-to-be-true’ investment offers.
- Investment Fraud: Offering fraudulent investment opportunities, often promising high returns with little risk. Beware of schemes that promise guaranteed returns with little or no risk.
How to Protect Yourself from Fraud:
We recently hosted a fraud prevention webinar for clients featuring Aoife Ridge, Director of Fraud Prevention for Charles Schwab. Below are key recommendations and suggestions shared by Ridge.
Secure Your Personal Information
Use strong passwords – Create complex passwords for your accounts that are at least 12-14 characters long, using a combination of letters, numbers, and symbols.
Enable two-factor authentication (2FA) – Enabling an extra layer of security by requiring a second form of verification can significantly reduce the risk of unauthorized access.
Be Cautious Online
Verify websites – Ensure websites are secure before entering personal information. Look for https:// in the URL and a padlock symbol in the address bar. Also, check the spelling in the URL. Many fraudulent emails representing legitimate sites or businesses are misspelled.
Avoid public WIFI for sensitive transactions – Public networks, such as those offered at airports, are often unsecure, making it easier for fraudsters to intercept your data. Use a virtual private network (VPN) if you need to access sensitive information on public WIFI.
TIP: When at an airport and you need to recharge your phone, never plug directly into a UBS port through a cord only. Always make sure to use a plug-in adapterwith your cord before plugging into an outlet.
Monitor Financial Statements
Regularly check accounts – Frequently review your bank and credit card statements for any unauthorized transactions. Promptly report any suspicious activity.
Set up alerts – Many banks and financial apps offer alerts for transactions over a certain amount or for unusual activity. These can help you quickly identify and respond to potential fraud.
TIPS: There are some reputable and safe apps available today to assist tracking these like on-going paid subscriptions. These help you stay in the know of which subscriptions you have and send notifications of renewals, etc.
Stay Informed About Scams
Educate yourself – Stay updated on common fraud tactics and emerging scams. Knowledge is your first line of defense. Checking sites such as The United States Social Security Administration | SSA and aarp.com can help keep you up to date on what scams are currently being reported and monitored.
Be skeptical of unsolicited communications – Be wary of unsolicited emails, phone calls, or messages asking for personal information. Legitimate organizations typically do not request sensitive information this way.
TIP: Most cell service providers offer a call filter option to alert you of potential spam calls (ex.; Verizon Call Filter).
Protect Physical Documents
Shred sensitive documents – Shred documents containing personal information before disposing of them to prevent dumpster divers from accessing your data.
Store documents securely – Keep important documents like social security cards, passports, and financial records in a safe place, preferably in a fire-proof vehicle.
Paper checks – Considering making payments via ACH, wires, or bill pay versus writing paper checks. Make sure when writing checks to not leave any blank spaces and to use an indelible black ink pen. Make reviewing copies of written checks via your online banking platform a consistent practice to identify any suspicious activity.
TIP: When disposing of prescription medication packages and bottles, a good practice is to black out listed names and RX numbers with a permanent marker (ex.; Sharpie).
Use Security Software
Install antivirus and anti-malware software – Protect your devices with reputable security software to detect and prevent malicious attacks.
Keep software updated – Regular updates to your operating system and applications include important security patches and protect vulnerabilities.
TIP: Most software programs offer on-going, automatic updates of systems to ensure you’re up to date and protected.
Report Fraud
Contact financial institutions – If you suspect fraud, immediately notify your bank or credit card company to freeze accounts and investigate the activity.
Report to authorities – File a report with the Federal Trade Commission (FTC) or other relevant authorities to help track and combat fraudulent activities.
Fraud prevention is an ongoing commitment. By staying vigilant, informed, and proactive, you can protect yourself from becoming a victim. Remember, in the ever-evolving world of fraud, staying a step ahead is key to safeguarding your personal and financial well-being. By securing your personal information, being cautious online, monitoring your financial statements, staying informed about scams, protecting physical documents, using security software, and promptly reporting any suspicious activity, you can significantly reduce your risk of becoming a victim of fraud. In a world where fraudsters continually evolve their tactics, staying one step ahead is crucial to protecting your financial and personal well-being.
For additional information and tools to best protect yourself, visit SchwabSafe | Charles Schwab.
