What is a financial scam?
A financial scam or financial fraud can present itself in various ways, but the underlying factor is that you either blindly agree to a financial transaction, or someone fraudulently transacts on your behalf or under a certain pretence. There are different types of financial crimes that one could fall victim to, such as identity theft, investment fraud, insurance fraud, mortgage and lending fraud, forex scams and mass marketing fraud, amongst many others. Given that many financial transactions are now conducted online for convenience, it has become even more important for you to be mindful of who you are transacting with, on which platform, and which personal details to disclose. This is especially important when it comes to forex trading, as there are many fly-by-nights and individuals who claim to be credible brokers when they are not. Therefore, it is crucial to use established forex platforms for trading, as you run the risk of losing your capital investment and never seeing any return on your funds.
Tips to avoid being a victim
The unfortunate truth is that scammers tend to target the elderly because they are perceived as uninformed, naive and gullible. This has been the case for many years, according to reports, and has led to the elderly losing billions of dollars, more so in 2020. Below are three tips to be cognizant of in order to reduce your chances of becoming a victim of a financial scam, regardless of your age.
- Protect your personal information
Banks and other financial institutions always warn against sharing your personal details, especially if it is financial information, with anyone. Things such as your identity or passport number, passwords and PINs should not be carelessly shared as they could be used to access your money or assets. One thing that is becoming common nowadays is so-called bank representatives calling and asking you to verify your details, which should raise alarm. Firstly, the bank would not randomly call and request such without a prompt from you, moreover, banks should rather relay the information that they have on your side and you confirm whether or not it is the correct information. This is preferred as it suggests that the person on the other side of the line already has your information, which your bank probably would, as opposed to you giving it to them over a phone call. Additionally, a credible bank would never request your PIN.
- Ensure safe online transactions
Internet banking and online transactions are where fraudsters thrive, and there have been many claims of people losing their money through phishing emails. This is why it is crucial to verify the sender of the email; often, scammers create an account that closely resembles your bank’s to confuse or mislead you. If you are not careful and spot the fake email, you may just end up giving scammers access to your personal information and money.
- Avoid anything that sounds too good to be true
This applies the most to investment opportunities, which are often forex trading or pyramid schemes. There are countless reports of some people losing their life savings because they believed a scammer who promised high returns with minimal to no effort, which should always be viewed as a red flag.
Working as a cyber security solutions architect, Alisa focuses on application and network security. Before joining us she held a cyber security researcher positions within a variety of cyber security start-ups. She also experience in different industry domains like finance, healthcare and consumer products.