Five tips to avoid financial fraud
Financial fraud can cause you to lose the hard earned savings that you have accrued. Understanding how to protect your savings and assets is part of good money management. To shield yourself from financial harm, here are 5 tips that you should know.
1) Protect your personal information
Your fortune is closely linked to your User IDs, passwords and PIN numbers. This information allows you to access money and assets from your banks and investments. Keep all such information confidential and safe, and update your passwords and PIN numbers periodically. Don’t disclose your personal information to anyone. Your financial providers such as banks and brokerages, or the police will never contact you to disclose your passwords and PIN numbers.
2) Online security
With the rise of online banking, trading and transactions, the internet becomes a popular ground for fraudsters to trawl for victims. Fraudulent websites and fictitious emails are common tricks used to get information about you. Your own online practices play a significant role in minimising the risks of financial scams. Ensure you have the latest operating system and browser installed, and protect your computer and mobile devices by using the most up-to-date anti-virus software.
3) Be careful when transferring money
Impersonation is the most common form of fraud. You may be contacted by someone or an institution that claims to work for you, or represent a financial company or the government to get money out of you. Fraudsters may contact you by phone, email or text messages. Don’t trust caller ID on your phone as fraudsters can use technology to make it appear as though their calls are coming from legitimate businesses or organisations.
Be sure to verify their identity, especially when they are asking for your personal details and/or asking you to part with your money. You can contact the related institution to check their authenticity.
4) Look out for scams
Be vigilant to the tricks and cons that other people have fallen for. Pay attention to scam prevention messages, and share the information with those who rarely read newspapers or watch TV, in particular with the elderly who are a key target for scammers.
5) Don’t be tempted by high returns
The promise of a high return for your investment is often too good to be true. In most investment fraud cases, fraudsters prey on the greed of investors who are attracted by aggressive and quick returns. Investment scams involving pyramid and Ponzi schemes, unregistered investments, promissory notes, commodities and such often use high returns to tempt you into making bad decisions.
Know who you are dealing with and invest only with licensed intermediaries such as banks, brokerages and financial planners.