Common Scams and Cybercrimes: How to Protect Yourself and Vulnerable Loved Ones

Staying up-to-date on the most common forms of cybercrime can help protect your long-term financial security and prevent identity theft. For example, most of us know not to open an email attachment from someone we don’t know. 

• But what if someone shows up at your home and claims to be from FEMA or a local utility company?
• Or what if your phone suddenly stopped receiving calls and texts?

Read on to learn how to protect yourself and vulnerable loved ones from common scams.

In-Person Scams Are on the Rise

Fraudsters now go door-to-door. Some want to sell you solar panels, others impersonate utility workers. In disaster areas, some pretend to be FEMA representatives. Their goal is either to extort money from homeowners or gain access to valuables. 

Scammers may wear official uniforms and carry fake credentials, so it can be difficult to know who’s real and who isn’t. If someone from your internet service provider shows up at your door without an appointment, verify the person’s identity by calling the phone number on the company’s website. Similarly, if someone offers to do home improvement or repair, a quick online search for the company’s name followed by “scam” or “review” can help you avoid trouble.

Cryptocurrency Scams

According to the FBI, “Cryptocurrency investment fraud…is one of the most prevalent and damaging fraud schemes today.” The process usually goes something like this:

• The criminal makes contact with their victim through social media, dating websites or by creating fake job opportunities.
• After building a relationship and trust, the victim is persuaded to open a cryptocurrency account at a reputable exchange.
• Next, the victim is invited to participate in a lucrative (but fake) investment opportunity. 
• At first, the investment will do well. The victim may be able to withdraw some of their “winnings.”
• But eventually, the account will be frozen and criminals will take all the money.

The fake investment platforms often appear legitimate and use two-factor authentication. Don’t be fooled. The cybercriminals who designed the site have backdoor access.

Before you invest in any opportunity that is unfamiliar or seems too good to be true, contact a trusted financial advisor, the Securities and Exchange Commission (SEC), FINRA or your state securities regulator. 

Investment Scams

Investment scams are another common way criminals take money from hardworking people. They offer “guaranteed returns” and other tantalizing descriptions that are completely untrue.  

Other signs of a scam include “exclusive” investment opportunities accompanied by high-pressure sales tactics. The criminals want you to buy now, because if you take time to research their investment, you’ll discover it’s a scam.

As with cryptocurrency scams, fraudsters often find their victims on social media, online forms and dating apps. They frequently prey on lonely people and on investors who don’t understand alternative investments but want to appear savvy.

The SEC encourages investors to:

• Do independent research. Don’t make investment decisions based on information provided by the fraudster.
• Be suspicious of unsolicited emails, texts and personal messages, including posts from online forums.
• Beware of foreign or offshore investments. Once money leaves the United States, it can be impossible to track.

Another common tactic, according to the SEC, is reciprocity. “Fraudsters often try to lure investors through free investment seminars, figuring if they do a small favor for you, such as supplying a free lunch, you will do a big favor for them and invest in their product. There is never a reason to make a quick decision on an investment. Genuine investment opportunities never require immediate action, and transparent information is always available for legitimate offerings.”

Fake Tech Support

Tech support scams typically begin with a pop-up warning on your computer claiming your device has a virus or security issue. The scammer’s goal is to gain remote access to your device so they can install malware, steal personal information or capture logins to financial accounts. 

Some scammers will reach out via phone and claim to be from your internet service provider (or other legitimate company). They’ll say they’ve detected a security issue on your computer and are calling to help fix the problem. But the endgame is the same; they will ask for sensitive information over the phone or ask for remote access so they can get sensitive information from the victim’s computer.

If you receive a suspicious phone call, hang up and call the number listed on the company’s website. Similarly, if you see a pop-up that says your computer has a virus and to contact tech support, ignore it. Contact the company using the phone number or email listed on their website.

SIM Swapping

Many websites, including financial websites, use two-factor authentication (also known as 2FA) to verify user access. But criminals can circumvent 2FA by “SIM swapping.” 

With enough information, fraudsters can convince a mobile service provider and have their victim’s calls and texts redirected to a different phone (SIM card). In some cases, all the criminal needs is your name, address, email and mobile number to do the swap. 

Once the fraudster has access to your mobile number, they can intercept two-factor authentication texts and access any accounts that use a code instead of a password. If the criminal has (or can guess) your financial institution logins, they can access your banking and investment accounts as well.

You can protect yourself from SIM swapping scams by adding a PIN or password to your mobile account. Encourage vulnerable family members to do the same, and make sure they know to contact their mobile provider immediately if they suddenly stop receiving calls and texts.

Protect Yourself From Cybercriminals and Scammers

The list above includes some of the most common scams, but there are dozens more including:

• Fake emails from Amazon.com
• Gift card scams
• Text messaging scams

If you know someone at risk, help them create an Action Plan to Avoid Scams. This simple, one-page form may prevent catastrophic financial losses and hours of frustration.

If you have questions about an unexpected message, suspicious call or new investment opportunity, contact your financial planner before taking action. To stay up-to-date on the latest online scams and investment fraud, bookmark and periodically review the FTC and FBI links below.


Related Reading:

• FTC Consumer Alerts
• FBI: Common Frauds and Scams
• How to Protect Your Financial Information Online
• When Investment Fraud Happens in Familiar Places

Disclaimer:
Assembly Wealth (“Assembly”) is an SEC-registered investment adviser; however, this does not imply any level of skill or training and no inference of such should be made. The opinions expressed herein are as of the date of publication and are provided for informational purposes only. Content will not be updated after publication and should not be considered current after the publication date. We provide historical content for transparency purposes only. All opinions are subject to change without notice and due to changes in the market or economic conditions may not necessarily come to pass. Mention of a security should not be considered a recommendation or solicitation to purchase or sell the security, and any securities mentioned may be held by Assembly for client portfolios. Information presented represents an opinion as of the date published and should not be considered an investment recommendation. Assembly does not become a fiduciary to any listener, reader or other person or entity by the person’s use of or access to the material. The reader assumes the responsibility of evaluating the merits and risks associated with the use of any information or other content and for any decisions based on such content.