Take-Aways From a Seminar About Fraud

 One of the activities that I pack into my busy schedule is volunteering as a room host for the same non-profit educational foundation, Master the Possibilities, that I am a paid instructor for. In short, I take attendance at other faculty members’ classes and get to learn a lot of interesting things for free.

I recently attended a class about fraud and below are my key take-aways:

 

Multiple Channels of Fraudulent Outreach- There are many ways that fraud victims are contacted including by phone, text, and e-mail. Also, pop-up messages on a computer with fake virus warnings that trick people into taking action that exposes personal information. The pop-ups may tell victims to call a “tech support” number and then panic them into providing remote computer access, personal identification information, or payment for fake fixes.

 

Fraud vs. Scam- The terms fraud and scam are closely related, but they aren’t exactly the same. Fraud, a broader term, refers to intentional deception used to gain something of value (like money, property, or identity) from someone else. Fraud can happen in many settings. Scam is more of an everyday term. It refers to a specific trick or scheme designed to deceive a person directly, often online, over the phone, or in person, to steal money or information. Scams are a type of fraud.

 

Skimming Devices are Passe’- Bluetooth technology is increasingly being used in place of traditional skimming devices to steal credit card information. Criminals discreetly install Bluetooth-enabled skimmers on card readers or gas pumps and retrieve data wirelessly (think laptops in a parking lot) from a 30 foot range away. Bluetooth skimming makes detection harder, allowing thieves to collect card numbers remotely and avoid frequent physical recovery of devices.

 

Tap to Pay- Tapping a credit card (i.e., contactless technology) is the safest and fastest way to pay for purchases. It uses encrypted technology that protects your credit card number. Transactions are completed in seconds, reducing time at checkout and limiting exposure to fraud. Tap-to-pay cards generate a unique, one-time code for each transaction, which helps prevent hackers from reusing stolen data. This feature makes it much more secure than swiping or inserting a chip card.

 

Keep Your Credit Card Close- Follow a personal decision rule that states “nobody ever takes my credit card out of my sight.” While most employees are honest, dishonest waiters or clerks have an opportunity to skim a card or snap a cell phone photo of card numbers and misuse your data. Three alternative payment options at restaurants are 1. pay with cash, 2. request a remote credit card payment device, or 3. follow a waiter to a cash register to oversee the transaction. Granted, the last two can be awkward but they do reduce the risk of fraud.

 

Three More Things- 1. Don’t do Facebook games or quizzes (e.g. “Find a dog that looks like you”) that require answers to questions that could also be security questions, 2. Pull your credit report at least once a year to check for errors and evidence of identity theft, and 3. Freeze (block) your credit to prevent new (fraudulent) credit from being opened in your name and thaw (unlock) your credit for 24-48 hours if you need to borrow money, open a bank account, or get a new utility service.

This post provides general personal finance or consumer decision-making information and does not address all the variables that apply to an individual’s unique situation. It does not endorse specific products or services and should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.

Fraud Prevention Tips

 

It seems like everyday we hear stories about people who become victims of fraud. They are tricked into sending advance deposits for products or services they never receive or making wire-transfers to fraudulent accounts, or divulging sensitive information that can be used to wipe out bank accounts or commit identity theft.

What to do? Nobody can completely reduce their risk of being defrauded because not all of our personal information is under our control. For example, our employer could be hacked or our utility company or a hospital or hotel that we recently stayed at. All of these places hold individuals’ personal information including credit card and Social Security numbers.

Below are five fraud risk reduction tips:

Look for Red Flags- Never invest in an opportunity that promises “guaranteed” or “risk-free” returns or astronomical yields in a short period of time. Many people have lost substantial sums investing in non-existent or worthless oil wells, land, securities, businesses, and other fraudulent schemes. Always remember that, if something sounds too good to be true, it probably is!

 

Beware of Electronic Contacts- In recent years, as more people started blocking robocalls on cell phones, fraudsters have taken a different approach. Many now contact victims using text messages and e-mails. Never click on a link or a file in an unsolicited message from someone you don’t know. It could unleash malware on a device or prompt you to divulge personal data.

 

Beware of Pretexting- Many fraudsters trick victims into believing they represent a financial institution, utility company, or government agency. This is called pre-texting, i.e., where victims are contacted under false pretenses. Fraudsters often claim there is something wrong with a victim’s account (or tax return) and need personal information to “verify” or “confirm” its accuracy. Again, an unsolicited request for data from a stranger is a major red flag.

 

Guard Your Credit Cards- A strict interpretation is to never hand your credit card to anyone who can take it out of your sight and potentially steal the numbers. Think waiters in restaurants, for example. Either pay in cash, use a credit card reader (some restaurants have these), or pay with a credit card at a cash register or bar. Another tip: beware of loose or scratched credit card readers at stores or gas stations. This could indicate tampering with a credit card skimmer.

 

Set Up Two-Factor Authentication (2FA)- The objective here is to make it difficult for fraudsters to access financial accounts (e.g., bank and brokerage) to steal money. 2FA is an extra layer of security beyond a user name and password and requires users to insert a unique passcode (texted to their phone) or answer a series of challenge questions.

 

In summary, there are many proactive steps that people can take to reduce their risk of becoming a crime victim. To learn more, read this useful article from AARP.

This post provides general personal finance or consumer decision-making information and does not address all the variables that apply to an individual’s unique situation. It does not endorse specific products or services and should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.