Thursday, June 8, 2023

Financial Fraud—Protect Yourself!

What is financial fraud, and how can we prevent it from happening?

What Is Financial Fraud?

Financial fraud is any deceptive practice that deprives somebody of their money or harms their financial health through dishonest, misleading, or illegal practices. Sometimes, the financial loss is so significant, people are forced to sell assets, go back to work if retired, or even file for bankruptcy.

4 Types of Financial Fraud

1.   Identity theft – Stealing someone’s personal information to assume their identity and enter into financial transactions as that person such as securing loans, transferring property, or making expensive purchases on credit.
2.   Cheque fraud – Stealing cheques and changing the amount payable and/or the payee’s details.
3.   Investment fraud – Convincing people to place their money into investments that are not real. Examples include pyramid and Ponzi schemes.
4.   Mass marketing and phishing fraud – Sending mass communications, often digitally, to trick people into providing personal information such as passwords to banking sites.

Protect Yourself from Financial Fraud

As with most things, prevention is better than the cure. Some simple ways to protect yourself include

•   Protecting your personal and financial information rigorously.
•   Understanding that if something seems too good to be true, it likely is.
•   Deploying software solutions to protect your digital devices.
•   Not volunteering personal information of any kind with anyone you don’t recognize.
•   Avoiding obscure URLs when online such as amazonn.com in place of amazon.com—the former likely will lead to a phishing site.
•   Identifying fake online forms that may look real requesting you to populate personal information. These often start with “Dear Customer” to gain your trust.
•   Looking for style, language, or other inconsistencies in communications.
•   Recognizing that legitimate organizations almost never ask you to send cash, payment in gift cards, or digital currency.
•   Enabling two-factor authentication wherever possible. This is when you’re asked to enter a verification number that is either emailed or sent to you by text when trying to access an online service.

3 Crucial Steps to Take If You Are a Victim of Financial Fraud

Since anybody can be victimized, everyone should be aware of the steps they need to take if it happens to them or somebody they care about.

1. Notify the relevant authorities as soon as possible. This includes police, financial institutions, credit bureaus, creditors, and insurance companies. When reporting fraud, it’s important to provide proof that supports your claim.
2. Take steps to limit the damage by cancelling credit cards, applying for stop payments, and considering new bank accounts. Change your PINs and passwords, and if necessary, deactivate your social media accounts.
3. If a phishing attack seemingly comes from a company, reach out and let them know someone is using their brand to financially defraud people.

To learn more about financial fraud, including how to identify it and ways to protect yourself from becoming a victim, visit iAcquaint today. iAcquaint is a confidential digital financial wellness service offered to you at no cost. You’ll have access to videos, articles, financial calculators, worksheets, and much more. Enhance your financial well-being today. Explore iAcquaint through the My Health & Wellness section on myCLAC.ca.

Financial Fraud—Protect Yourself!

What Is Financial Fraud?

4 Types of Financial Fraud

Protect Yourself from Financial Fraud

3 Crucial Steps to Take If You Are a Victim of Financial Fraud

You might be interested in