In the last five years, over 3.79 million individuals have fallen prey to cybercrime and fraudulent activities, as reported by the FBI Internet Crime Complaint Center (IC3), leading to potential losses of approximately $12.5 billion. A staggering number of 880,400 complaints were lodged in 2023 alone. Shockingly, it is believed that only about half of older Americans affected by fraud actually report it to the authorities. Despite our efforts to safeguard money through various security measures, financial fraud and theft continue to persist. The advent of online commerce and digital banking has introduced new security protocols, yet criminals are adapting with more sophisticated cyberfraud techniques.
Fortunately, advancements in technology offer improved methods to monitor and protect personal and financial information from malicious actors seeking to exploit individuals online. Here are five essential practices to incorporate into your financial management routine to shield yourself from online fraud and scams.
1. Regularly Monitor Your Finances
To detect issues early on, it is crucial to review your financial statements, bills, and reports routinely. Keep a close eye on your bank accounts for unauthorized transactions and scrutinize credit reports for any accounts opened without your knowledge. Establish a schedule to monitor your accounts at least once a week, verifying each transaction and identifying any suspicious activity. Utilize email and text alerts provided by your bank to receive notifications of any account activity. If you suspect fraudulent behavior, contact your bank’s fraud department immediately for assistance.
Additionally, obtain your credit reports from major agencies like Equifax, Experian, and TransUnion through AnnualCreditReport.com. Ensure all information on your reports is accurate and report any discrepancies to the appropriate bureau for investigation. These agencies are obligated to respond to your claims within 30 to 45 days, providing details on their findings and proposed resolutions.
2. Prioritize Security Over Convenience Online
Contrary to popular belief, most cybercriminals do not bypass encryption systems with complex algorithms. Instead, they rely on deceiving individuals into disclosing their personal details through various means. Safeguard yourself from falling victim to cybercrimes by adhering to these guidelines:
– Avoid clicking on links in emails or texts, especially those claiming to be from financial institutions. Instead, manually type the website address into your browser to access legitimate sites.
– Exercise caution when sharing personal information online and be wary of phishing attempts.
– Keep your passwords strong and unique for each account to prevent unauthorized access.
– Stay informed about the latest cybersecurity threats and best practices to protect your online identity.
By following these recommendations, you can enhance your online security and minimize the risk of falling victim to digital fraud.
Be cautious when opening email or text attachments as they can contain harmful software like spyware and adware. Verify the sender’s name and email address before opening any attachments to avoid falling victim to scams. Do not disclose personal or account information over email, text, or phone, as legitimate institutions will never ask for such details through these channels. Always contact the company directly to confirm any requests for sensitive information.
Do not trust caller ID as scammers can manipulate numbers and labels to appear legitimate. Hang up and call known numbers for your financial institutions to verify the authenticity of the initial call. Utilize multifactor authentication for added security on your financial accounts, requiring multiple forms of identification to log in.
Consider going paperless by opting for electronic statements and bills to prevent theft of financial documents. Direct deposit for income and payments is a secure and convenient alternative to paper checks. If you prefer keeping physical copies, shred all financial paperwork before disposal to protect your personal information. You can purchase a paper shredder or use a shredding service at local UPS or office supply stores for safe disposal.
Using a personal shredding bin picked up by a third-party shredding service may expose you to security risks, depending on the service’s level of security measures.
Exploring Further: Affordable budgeting apps: Effective ways to manage your finances in the digital age
1. Avoid Giving Money to Strangers
While we educate our children about the dangers of interacting with strangers, it’s essential to remember this lesson extends to online interactions as well. Despite developing a rapport with someone online, scammers are patient and will exploit any opportunity to deceive you. Here are some guidelines to follow when making online transactions:
– Refrain from sending money to individuals you have not met face-to-face. Platforms like Craigslist and Facebook marketplace are breeding grounds for scammers who target users of payment services like Venmo, Zelle, and PayPal. To prevent falling victim to a peer-to-peer scam, avoid conducting transactions with unfamiliar individuals.
– Redirect payment disputes to the app providers. It is common for fraudsters to claim they made a payment “by mistake” through peer-to-peer apps and request a refund or additional payment from you. If you encounter this situation, advise the individual to resolve the issue directly with the app provider. If they resist, they may be attempting to scam you.
– Familiarize yourself with the dispute resolution process before making a purchase. Not all peer-to-peer apps offer avenues for disputing transactions. While Zelle treats transactions as cash, making refunds impossible, Venmo and PayPal provide protection against fraudulent activities or defective items. To benefit from this protection, select the appropriate payment category during the transaction and be prepared for a potentially lengthy dispute resolution process. Understanding your options can significantly impact your online purchasing decisions.
– Focus on reputable online marketplaces. Platforms like Etsy, eBay, and Mercari employ escrow systems and offer dispute resolution mechanisms to assist in resolving issues with online purchases. Although no system is foolproof, these marketplaces offer paths to recourse in case of fraudulent transactions.
Digging Deeper: Protecting Your Finances from the Top 15 Scams Targeting Elderly Americans — Tips for Safeguarding Your Money
2. Communicate About Your Finances with Loved Ones
Although initially uncomfortable, sharing your financial status with close family members is crucial, especially as you age. Keep your loved ones informed about your financial situation, ensure they comprehend your preferences, and provide them with access to your financial details in case you become incapacitated. Consider granting trusted family members access to your account passwords or informing them of their location to facilitate financial oversight in times of illness or hospitalization.
Having an additional set of eyes to review incoming financial requests can help you and your loved ones navigate potential scams and prevent financial losses.
Question: Are there financial management services available if I lack a trustworthy family member?
Answer: Yes, consider appointing a fiduciary to assist in managing your finances. A licensed fiduciary is mandated by law to make decisions in your best interests and handle
Explore how to identify a reliable retirement advisor, with a focus on finding and evaluating a fiduciary. Delve into the topic further: Tips for selecting a trustworthy retirement advisor to secure your financial future. Additional articles in this series cover topics such as recovering from scams, assessing your financial well-being, low-risk investment options for retirees, and strategies for safeguarding your retirement funds against economic downturns. Gain insights on protecting your finances and personal information online through practical advice and FAQs. Learn about managing your credit score in retirement and the importance of identity theft protection services. Discover a range of resources available to assist retirees, including local senior programs, online benefits tools, government financial aid programs, services from organizations like Volunteers of America, and the 2-1-1 information hotline for essential support.
Business Insider. Accessed February 16, 2024.
About the writer:
Heather Petty is a finance writer specializing in consumer and business banking, personal and home lending, debt management, and saving money. Following a troubling experience with an unscrupulous mortgage broker during the purchase of her first home, Heather embarked on a mission to assist others in avoiding similar financial pitfalls. Her insightful expertise and analytical work have been prominently featured on MSN, Nasdaq, Credit.com, and Finder, among other esteemed financial publications. When not unraveling the intricacies of finance, Heather is a distinguished author of a widely acclaimed young adult mystery series — with more thrilling installments on the horizon. Article edited by Kelly Suzan Waggoner.
