Identity fraud is easy money for criminals, but there are steps you can take to help protect yourself and your money:
- Ignore requests for an urgent form of payment, such as using a gift card or making a wire transfer. If you haven’t met someone face-to-face and are asked to make an immediate payment, that’s a red flag. This is especially true if you’re asked to pay in an unusual way, such as buying gift cards.
- Protect your passwords and login information. Simple usernames and passwords are risky. Vary your usernames and use complex, different passwords. You can write these down and keep them in a safe place or use a password manager.
- Do not communicate with strangers about confidential or sensitive financial matters. Remember that if you have never met someone in person, they are technically strangers.
- Verify everything you’re told to determine if a supposed problem truly requires your attention. Hang up on a suspicious call or log off your computer, then contact a legitimate business partner to check out watch you’ve been told.
According to a 2021 AARP-sponsored report by Javelin Strategy & Research, identity fraud led to $56 billion in losses in 2020.[1] The report states older consumers are not more vulnerable to fraud, but notes that the consequences are higher for adults over 50 because the losses tend to be greater for people who have accumulated a lifetime of wealth.
People that initiate fraud adopt various personas to deceive customers into trusting them. These four are common:
The “Good Egg”. He or she will reach out with an offer of a great interest rate, unclaimed money, or romance.
The “Punisher”. Someone who pulls at consumers’ heartstrings by saying their relative is in jail, in the hospital, or they owe the IRS money.
The “Authoritarian”. This person delivers information that is factual, clear-cut, and important – but isn’t. A fake bank employee or phony medical practitioner are common personas.
The “Oracle”. This crook shows up unannounced, in an email, instant message, or occasionally face-to-face and warns of imminent danger. The fraudster often asks for passwords or control of your computer, supposedly to prevent disaster.
Fraud affects victims financially and emotionally, and many are reluctant to report these crimes out of shame that makes them feel incapable of handling their personal business affairs. As identity fraud victims shoulder self-doubt and shame, they can spiral into moral distress that leads to feelings of toxic anger and social isolation.
If you believe you or a loved one has fallen victim to a scam, reach out to your local police or financial institution for assistance. Download our report, Fraud: Big Business, to learn about some commons scams to be aware of in retirement, as well as what to do to help protect your finances.
Investment Advisory Services offered through Sound Income Strategies, LLC, an SEC Registered Investment Advisory Firm. The Retirement Income Store® , LLC and Sound Income Strategies, LLC are associated entities.
[1] https://www.javelinstrategy.com/content/2021-identity-fraud-report-shifting-angles-identity-fraud
