Wednesday, December 12, 2018

Managing a Different Kind of Risk

Ask The CFP® Practitioner



“Go where the money is and go there often.”   

~ Willie Sutton, Jr., notorious bank robber (1901-1980).


Question: How can I protect myself from scams and cybercrimes?

Answer: Risk management is a primary purpose of financial planning. Cybercrime, although different from market risk, is an attempt to deplete net worth. This issue was last addressed in a column on January 27, 2015. Since then scams have become more elaborate. As commerce and personal information gravitate to the internet there are more innovative and creative techniques to separate you from your wallet. Education and awareness are the best defense.

Submitted

Common scams rely on the use of unsolicited calls and email phishing. Phishing is an email attack where the crook fishes for personal information like passwords and credit card numbers. As more of us are texting SMiShing is the newest approach. SMS stands for short message service or text messages. SMiShing fishes for personal information and often using intimidation to lure you into clicking on malware hyperlinks.

Fraudsters are evil predators who often focus on our older population, retirees, those who’ve recently lost a loved one or live alone. Timeless scams rely on lottery winners needing cash to claim a prize, grandchildren in distress requiring financial assistance, requests for computer access, offers to sell timeshares and fake charity scams. There is always a hook that requires you to divulge sensitive personal information or access to accounts. One way to defend yourself from these attempts is to ask for a phone number and let say that you or your attorney will call them right back. This typically ends with a click of the phone or no further online contact from the potential offender.

New Medicare cards are being mailed to Floridians this month. This provides crooks a reason to contact you and request personal information stating that it is required for payment processing and verification. They may also call with an unsolicited offer of discounted prices for medical equipment (bathtub, wheelchair, heart monitor, etc.). The request for your Medicare number or other information are likely bogus. Again, request the solicitor’s contact information and ask to call them back.

Although sweetheart swindles are nothing new, the use of social media to make friends and online dating services provide another avenue for crooks to locate victims. Pretending to care deeply for you, these tricksters are remarkably patient and extraordinarily creative. They’ll scour your profile enabling them to reference fictitious similarities, create convincing stories and establish trust. Employment, education, photos, and their family member information is predictably fabricated and part of the ploy. When confident that you’re hooked, the “ask” begins. Needing only small sums of money at first, and perhaps paying it back to establish credibility, the amounts and frequency will rapidly increase as you grow closer to meeting in person. Then, poof, they’ve disappeared along with your heart, your savings and often your online identity.

Caregiver ploys are similar and have also become more sophisticated. Be wary of tales of woe requiring financial assistance. Often the family of the victim never knows until it is too late because the vulnerable are often secretive. If you notice signs of substance abuse, financial problems, frequent job changes, and evictions are red flags. Trust is something to be earned. If you’ve been scammed it’s tough and embarrassing to admit that you were a victim, but the sooner you admit and acknowledge this, the sooner you can start to move forward.

Title company scams are the latest sting. With email and SMS access, swindlers can monitor message activity regarding real estate transactions. If there is any question about wire transfer instructions, or if instructions change, always make verbal contact with your realtor, Title Company and attorney. Be wary of “new” fraudulent wire transfer instructions sent at the last minute transferring funds into a black hole making it very difficult or impossible to retrieve. Financial activity is moving online and so are the criminals. The FTC (Federal Trade Commission) protects consumers and in conjunction with local police and law enforcement assists in remedying these crimes, but they must be reported.

Damage may be mitigated if there is a breach by reviewing online account activity every few days, shredding sensitive documents, and updating passwords regularly. Remain vigilant while taking measures to protect your information from predators.

Technology will continue to improve, simplify and complicate our lives all at the same time. Don’t ignore obvious red flags. As Ronald Reagan said, “Trust, but verify.” Stay focused and plan accordingly.

All investments are subject to risk. The opinions expressed are those of the writer, but not necessarily those of Raymond James and Associates, and subject to change at any time. There is no assurance that any investment strategy will be successful. Asset allocation does not guarantee a profit nor protect against loss. The S&P 500 is an unmanaged index of 500 widely held stocks. It is not possible to invest directly in an index. Information obtained from outside sources is believed to be reliable but is not guaranteed.

“Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.”

This article provided by Darcie Guerin, CFP®, Vice President, Investments & Branch Manager of Raymond James & Associates, Inc. Member New York Stock Exchange/SIPC 606 Bald Eagle Dr. Suite 401, Marco Island, FL 34145. She may be reached at (239)389-1041, email darcie.guerin@raymondjames.com. Website: www.raymondjames.com/Darcie.

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