Financial Planning in the Internet Age: 5 Tips to Protect Your Money Online

As internet use has taken over our daily lives, there’s been an unfortunate side effect. That’s a vast increase in fraud, enabling scammers to access consumer accounts and money. And it’s not just more of it that’s the problem. Scammers are getting better at it.

As part of your financial planning, we want to arm you with our best tips on internet security to ensure that you avoid being the next victim.

Over 56 billion reasons to pay attention –   Today’s online fraud is big business. It costs Americans about $56 billion a year, according to a Javelin Strategy & Research study. Over 49 million people fall victim to these scams each year, with an average loss of $1,100 per person.

Five steps you can take to avoid internet fraud – Scammers keep changing tactics, but you can know what to look out for by keeping up with the latest approaches. Here are five tips based on recent online security research.

View any unsolicited requests for personal information or payment with suspicion. 

“Phishing” is when scammers impersonate familiar banks, PayPal, or businesses and try to get you to provide personal or payment information. Or they may want you to log in with a link so they can capture your login credentials. Sadly, these have gotten much more sophisticated and may look like an official email from your bank.

But your bank has established methods of contacting you, and it is primarily through secure email or physical mail.  So it’s best to assume it’s a scam until proven otherwise.

Phishing messages often share these features:

• False sense of urgency
• Generic email greetings that look out of place
• URLs or email addresses that don’t match the organization
• Logos, design, and type that look out of place or strange

Or, the scammers may contact you by text, phone, or voicemail. Ignore the caller ID, as, unfortunately, scammers have also figured out how to make those look legitimate.

Your best defense? Assume these requests are fake until/unless confirmed with the source. Then, if you think the request might be legitimate, contact the source directly.

Don’t use the contact information in the message. Instead, use the bank’s number on your credit card or statements or on their official website.

Avoid clicking links or downloading attachments from emails and texts.

Some scammers are much more subtle in their approach. Instead of blatantly asking you for information, they send you a link or attachment. Once you click the link or download the document, “malware” is automatically installed on your computer in the background. Malware can range from keyword recorders to systems that capture information and passwords stored on your computer.

Frequently, email scammers obtain email lists from unsuspecting consumer accounts. So you might get an email that appears to come from Aunt Joan and contains a strange link or attachment. Usually, these seem out of context, but scammers are getting more strategic.

So be careful. Avoid clicking on any links or downloading attachments unless you really need to.

Only use Zelle® with someone you personally know and trust.

Zelle®, and other instant transfer platforms, are a convenient way to transfer money quickly. The money leaves your account and is credited to the receiver almost instantly. As such, you can see how attractive these platforms are to thieves.

So not surprisingly, Zelle payment scams are on the rise. A scammer may pose as your bank or other organization. While your bank may text you to validate unusual activity, they will not contact you and request that you send a Zelle payment to yourself or anyone else. If you get such a request, this is likely a ploy.

Here’s how these common scams work:

• You’ll usually get a text message that looks like a fraud alert from your bank. That’s not unusual; banks use these to verify unusual activity and prevent fraud.
• But what happens next is different. You’ll get a phone call from a number that appears to be from your bank. The “representative” will offer to “help” you fight this fraud. These individuals will ask you to send money to yourself using Zelle®.
• The scammer will often ask you to provide them with the code you’ll receive from the bank.
• They will take that code and enroll their bank account in your Zelle® profile.
• Then the next time you send money, it will be directed to them.

As you can see, it is critical to avoid all of this. So beware, the caller ID on your phone is not to be trusted these days.

And you should never respond to a call or text you receive. Instead, ignore it. Or, if you think it might be legitimate, contact the bank directly to see if there is a real issue.

Be cautious anytime there seems to be pressure to act quickly. That’s not how banks, utility companies, and other legitimate businesses operate.

Beware of gift card scams and other unsolicited offers.

Gift cards are a replacement for cash, so they are prized by thieves. Today, many of the most common scams involve gift cards. In general, avoid any request to buy or be paid in gift cards, as it probably is a ploy to get further information from you or steal money or your identity.

How exactly do these gift card scams work? Sometimes, you may receive a text or email from a store or company you’re familiar with saying you have won a gift card. To claim the prize, you must provide your contact information and answer a few survey questions.

The instant you click the link, malware automatically gets installed on your computer. Then, the scammers may gain access to your data. They may use it or sell it to others for identity theft, or your information may be sold to marketers, generating mountains of spam in the future. Or the program may capture your keystrokes, giving them access to your financial accounts.

Unfortunately, the scams don’t stop with gift cards. Some other common ones:

• The promise of money in return for a favor
• Notifications of lottery wins
• Unsolicited job offers

These are all likely ploys to get you to turn over personal information or money.

The bottom line is there’s no free lunch. These free offers have catches or are outright thieves going after your bank accounts. Do not send gift cards or wires or provide a debit card to anyone who contacts you, no matter with whom they say they are associated.

Whatever you do, don’t let anyone access your computer. There’s too much risk these days when someone can install a quick program that can mine your data and record your keystrokes.

Don’t overshare on social media.

Finally, almost everyone spends time on social media these days. Unfortunately, thieves do as well.  Be very careful posting personal information. It may be used against you.
If you show your vacation pictures while you’re still away, you risk thieves breaking into your home. Or if you post personal information, scammers might be able to construct a story that seems believable to ask you for help or money. So when you’re on social media, be careful. Think about how your post might be used to get into your bank accounts or even your home.

These scams vary, but one popular one targets older users. The “grandparent scam” involves the thieves calling, texting, or emailing that your grandchild, called by a name gleaned from social media, is in trouble. And they need money now for some reason and asked them to contact you for it. If you’re genuinely concerned, it’s okay to verify; contact your grandchild or their parents directly and make sure everyone is okay.

Our best advice: Financial planning for online security.

As financial advisors to hundreds of families, part of our financial planning is helping keep your money safe. In today’s online world, this is more challenging than ever.

Fortunately, awareness helps.

Our best advice is never to trust an indirect channel. Simply ignore it. Or if you’re concerned it might be real, go to the source. For example, call the bank using their published phone number and go to the official login page (not a link sent through text or email).

Or if your utility company contacts you, claiming that you need to make an immediate payment, that’s not normal. Usually, you’re fine ignoring it and deleting it, but if you’d like to double-check, just log in to your official account.

A bit of paranoia is smart.

Banks, the IRS, and other agencies will not likely reach out to you via email or text. And they wouldn’t send you a link. So always consider an email, text, or call out of the blue suspicious.

If you fall victim or suspect a scam, don’t be embarrassed; call the authorities and any financial institution involved. You should also freeze your credit reports and immediately change your passwords on all financial accounts. With millions of other Americans falling victim to these scams, you are not alone.

Cover Photo by Growtika on Unsplash