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3 Top Tips to Avoid a Financial Scam

Last week a family member posted on Facebook. The post began with the words “I’ve woken up this morning hoping that yesterday was just a horrible dream”. Reading the post, it transpires that the previous day a very articulate and polite man called from their “bank”. He explained that they had flagged unusual activity on their account.  There was! They had been victims of a financial scam.

There had been a deposit of £10,000 which my family member knew nothing about. During the phone call the scammer manipulated them into transferring the £10,000, plus the £5,000 they had in savings, he cleaned them out.

It turned out the £10,000 was a loan taken out fraudulently by the scammers and this was the way they gained trust with the victim. I know what some of you are thinking, that “it would never happen to me”, but these are savvy people, they’re not old, they aren’t vulnerable and if it could happen to them, it can happen to all of us. So, take 5 minutes to read this blog and even if it never happens to you, you might be able to pass on some tips to the less switched-on amongst us

Information is King

I once attended a Ted Talk by a lady called Jenny Radcliffe, aka The People Hacker. It’s her job to uncover flaws in the security of large corporations, but this talk was all about how easy it is to be a victim of a financial scam.

Tip #1 – Social Media

In the talk, Jenny picked on an individual in the audience and went to work. Within 30 minutes she had the person’s date of birth. She started on Facebook and scrolled down until she came across those birthday wishes we all get.  Day and month sorted, then she scrolled until she found one for a big birthday, the lady’s 40th.  That was the year sorted.

She could see when they were away on holiday because of photos they had posted and then, using the registry of births and deaths, she found the lady’s maiden name.  She continued until she had built a picture of this lady. Jenny explained this information could then be used to apply for credit cards, mobile phones and loans.

The moral of this story is that we give out too much personal information on social media. So, make sure you review your privacy settings on all social media channels and have everything locked down tightly.  Don’t publish your date of birth and make sure only friends can view your posts and pictures. Every time you post something imagine that there’s a cybercriminal reading it and decide if you still want to post it.

Oh, and it’s not just electronics!  Invest in a shredder, the scammers will still go through your bins to find a statement or bill with your name, address and account number on it.

Tip #2 Online Safety

Make sure your passwords are strong, that does not mean just long, “password1973” will be compromised in a matter of seconds with a sophisticated computer – scamming is a multi-billion pound industry and they can afford the finest computer hardware.

Make your passwords long and random, and don’t have a single password for everything, if one is compromised, they all will be. Use a password manager like www.lastpass.com.

One thing I have been guilty of is not having good quality anti-virus protection on my PC. I recently engaged the services of an IT support company and they asked what Anti-Virus I used, I said Window’s Defender, and they laughed.

Having old or out-of-date antivirus software will allow hackers to infect your hardware with malware or keystroke trackers and monitor your every move online. They could see everything you do and every key stroke you make.

Finally, avoid using unsecured Wi-Fi when you’re out and about, we’ve all been guilty of having no 4G and trying to find a Wi-Fi hotspot, but how do we know it’s legitimate? It could belong to anyone and, hey presto, they have your information.

Tip #3 – Authority

We all respond positively to authority and rarely question it, whether that’s a policeman, someone from your bank or an email which says it’s from Her Majesty’s Revenue and Customs.

But just because someone looks and sounds the part it doesn’t mean that they are. So, before we respond, check that they really are in a position of authority. And how do we do that? Well if it’s a police officer or someone in a high vis jacket start by asking for ID and check the ID properly.

If you’re not sure, call the organisation they are claiming to be from, better safe than sorry. If it’s someone on the phone it’s a little trickier. In my family member’s story, the caller ID matched the number on the back of their bank card. Numbers can be cloned, the only way to be 100% sure is call them back on a number which you know to be correct.

And whatever you do, do it on a separate phone line.  If they have called on your mobile use your landline or someone else’s mobile or vice versa. There have been many instances where they don’t hang up and when you call back they are still on the line. If you have any doubts whatsoever hang up.

I know this is a “non-British” response but we need to do it. If they are genuine they will happily give you a reference number, allow you to hang up and call them back on an alternative number. Being polite isn’t going to stop you from being a victim of a financial scam.

What Happened?

Well, I’d like to tell you it was all good news, the scammer was caught, the money returned and everyone lived happily ever after, but so far there hasn’t been a fairy tale ending. They spent several hours in the bank the next day and they’re waiting to hear whether they’ll get anything back.

Please don’t end up the victim of a financial scam like them!

If you’d like advice on any aspect of your finances 4 Financial Planning offer a free initial consultation. You can book one in today using this link.

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