Types of frauds and identifying risks
There may be nothing more important than protecting your family and yourself from risk. An essential part of providing that protection is securing your financial portfolio that supports those loved ones. For high-net-worth individuals (HNWI), often defined as households with at least $1 million in assets, these threats can come in many forms.
The tactics cybercriminals use to target HNWI are not unusual, but the diverse and deep assets in these households could be attractive and may be vulnerable targets. And unlike businesses, small and large households typically don’t have robust cybersecurity defenses. This means that individuals “in the middle” must remain aware and resilient.
With the ‘internet of things’ (IoT, the connection of multiple digital devices such as your refrigerator, garage door, doorbell, thermostat, and cellphone) continually expanding in scope and complexity, hacking vulnerabilities are widespread.
Identify theft
Perhaps the most vital aspect of cyber susceptibility, and master key to other fraud is identity theft. Once a hacker gains your personal information such as social security number, account numbers and maybe even passwords, your valuable assets are vulnerable.
Cybercriminals have sophisticated tactics and tools to steal your information and assets, so potential victims of fraud should prepare for an attack. Studies show that a cyberattack occurs every 39 seconds, and 95% of attacks are due to human error†, so it may not be a matter of if, but when.
The following suggestions may help you avoid being part of those stats:
- Carefully screen phone calls, texts, social media messages, and emails from unfamiliar numbers or people
- Don’t share your bank and other account numbers, social security number, or other personal details
- Remove mail from your mailbox daily and place a hold on mail when away for any extended time
- Watch for and report unauthorized or suspicious credit card and bank account transactions
- Understand how credit card skimming works and how to protect yourself
- Avoid accessing personal accounts or sharing personal information when using public Wi-Fi
- Store personal information, including your social security card, in a safe place, not your wallet
- Visit Identity Theft Resource Center for more information
Businesses are targets, too
Businesses, large, small, ‘mom & pops’ and even side gigs are vulnerable to cyber theft. Larger companies may have robust identity theft protections in place, but because of the likelihood of having many employees, could have more access points. Smaller businesses are prime targets just for that reason–criminals believe small businesses have weaker safeguards‡.
Like individuals, businesses risk loss through credit card fraud. It’s estimated that credit card fraud could reach more than $13 billion in 2023§, with ‘card-not-present’ (CNP) counting for more than $9.4 billion of that. Online credit card use is fraught with CNP but can be combatted with multi-factor authentication.
Tax theft
Scammers take advantage of taxpayers, and as you’d guess, particularly around tax season, often using the communication methods listed above, phone calls, texts, social media messages, and emails. Potential victims can be contacted by individuals claiming to represent the IRS, and insisting on an immediate payment, sometimes by wire service and even gift cards! Other criminals file bogus tax returns and some pose as tax preparers then seek fraudulent refunds.
Some of the prevention methods already described apply here, but also try to install security software on digital devices, bolster your passwords, and if filing online, ensure the site is secure and legitimate. The IRS will only accept one tax return, and usually the first it receives, so filing as early as possible can reduce that threat.
Real Estate Transaction Fraud
Perhaps not as well known as identity theft and other types of fraud, is real estate transaction fraud. According to the FBI¶, there were more than 13,500 real estate fraud victims in 2022 with losses of more than $396 million. Tactics of such crimes include wire fraud, foreclosure relief fraud, loan-flipping, and home inspection scams.
You can protect yourself by working with licensed professionals, be skeptical of last-minute transaction changes and don’t fall for ‘off-market transactions’ no matter how enticing.
Investing in Protection
Just like a business, HNWIs can benefit from having procedures and tools for fraud and identity theft protection. Some procedures for using digital tools and accessing online sites are explained above, but don’t forget about paperwork you may have lying around or tossed in the garbage. One loose bank statement can help a hacker.
You may find that a cybersecurity professional can provide guidance, software, and hardware that fits your unique needs, but diligence is key–complacency could ‘leave a door open’ through which an attack might occur.
We’re Here to Help
Cyberattacks have become so common, for many individuals and businesses, it’s not a matter of if, but when. And as the IoT evolves and increases our connectivity, the need to prepare for the ‘when’ is now great. To learn more, please contact your Huntington Private Bank team to see how we can help or find a Huntington Private Bank office near you.
