Five Important Steps to Help Prevent Financial Fraud

It is not paranoia if they really are out to get you. Just last week, according to technology news website The Verge the Consumer Financial Protection Bureau (CFPB) warned its employees to limit the usage of their cellphones due to fears that “China had hacked AT&T, Verizon, Lumen Technologies, and other telecom providers” (Del Valle, November 2024). Earlier this summer, it was discovered that North Korea had hacked military engineering firms as well as NASA (CNBC, July 2024). And last month, the Justice Department in coordination with Microsoft took down dozens of websites attempting to phish for personal information and passwords from American citizens (Reuters, October 2024).

With the velocity of computing today, our digital enemies have never been closer, faster, or more sophisticated than they are right now. This poses a large question – as an individual, what do I do about it? How do I as a person or we as a household protect ourselves from well-funded, government-backed nefarious actors? These five action items can help you protect your finances – and they are all entirely free of cost.

1. Put a credit freeze at each of the major credit bureaus.

One of the easiest ways fraud occurs is when someone is able to open a line of credit without your knowledge or consent. It can take months or years for this to be discovered, usually around the time when an unsuspecting victim is seeking to use their credit, only to discover the fraudulently opened account. You can contact Equifax, Experian, and Transunion for free and request online that they place a security freeze on your credit. This will prevent credit card applications from accessing that data, triggering a rejection while at the same time notifying the bureau that someone is trying to illicitly access your information. If you ever need to create a credit line or access credit information (such as buying a home), it takes just a few minutes to unfreeze your credit.

2. Create and maintain strong passwords, enable two-factor authentication.

Use complex passwords to help make hacking your individual account as difficult as possible. No matter how lengthy your password is, do not use personally identifiable information such as part of your Social Security Number, your date of birth, your wedding anniversary, or anything that could be tied to you personally. A password manager can help maintain this. Additionally, any account that has the ability to use two-factor authentication (2FA) should be deployed. Yes, 2FA slows down your ability to log into things and can feel like a pain. Do you know what’s a bigger pain? Identity theft. As Dwight Schrute from The Office exclaims, “Identity theft is not a joke Jim!”

3. Setup notifications for account transactions and activities and review activity regularly.

One of the greatest defenders of your finances is yourself. You know where you are at or not at, you know what you have or have not spent on, so you are in the best position to spot when something is happening that you did not authorize as it is occurring. By allowing notifications on your mobile device for your accounts, you can stay up-to-date on what is happening in your accounts. We also recommend regularly logging into your banking and credit accounts to ensure that contact information is correct and that transactions and balances look like how you expect them to.

4. Opt out of prescreened credit card offers.

In cooperation with the three credit bureaus, you can visit https://www.optoutprescreen.com/ and register yourself to opt out of credit offers. It does not cost anything to do this apart from a few minutes of your time. OptOutPrescreen.com notes that offers may exist through these channels that are not offered publicly. However, if you are already satisfied with the lines of credit you currently have, opting out will reduce your junk mail while at the same time avoiding a potential risk for someone to intercept your mail and subsequently attempt to impersonate you. Finally, doing this does not prevent you from opening a line of credit – it just prevents credit issuers from accessing your information to target you with offers. 

5. Slow down.

One of the main reasons why people fall prey to various forms of phishing attacks is that the communication, be it email, text, phone call, or regular mail looks so close to legitimate that it does not cause someone to be suspicious until well after the fraud event has taken place. One character could be off in who the email is from, or a phone number to contact the scamster might be just a digit or two away from the legitimate phone number of the institution. Whenever anyone is asking for any of your personal information, it is important to take a minute before responding at all to think about whether the request is legitimate. By pausing and making certain the email is right, the phone number is correct (look it up yourself – don’t rely on what they sent you), that the request makes sense, you can be more confident that the person on the other end is actually there to help you, not harm you. And if you are ever unsure, just stop communication and wait until you are sure before proceeding; fraudsters will try to psychology manipulate and put false pressure on you as a means of coercing the answer they want. Just like driving, speed kills, so slow down and help keep yourself safe.


References

Del Valle, G. (2024, November 7). Some federal employees warned not to use their cell phones after reports of Chinese-linked telecom hack. The Verge. https://www.theverge.com/2024/11/7/24290626/some-federal-employees-warned-not-to-use-their-cell-phones-after-reports-of-chinese-linked-telecom-h

North Korean hackers stealing military secrets, U.S. and allies say. (2024, July 26). NBC News. https://www.nbcnews.com/news/world/north-korea-hackers-stealing-military-secrets-us-allies-rcna163769

Reuters. (2024, October 3). US says it disrupted Russian efforts to hack government agencies. Retrieved November 12, 2024, from https://www.reuters.com/world/us/us-says-it-has-disrupted-russian-efforts-commit-computer-fraud-2024-10-03/