Financial fraud is at an all-time high. The types of financial fraud hitting consumers continue to evolve and get more sophisticated. Sadly, billions of dollars are lost annually to financial fraud.
Financial Wellness month is a perfect time to learn how to protect yourself from this growing problem. Here at Merck Employees Federal Credit Union we are committed to assisting all members from falling victim to fraud by providing ongoing education on popular fraud scenarios. No matter what type of fraud it is, we urge all members to practice one important process when dealing with potential frauds: “Slow down, stop, and escalate.”
Why are the three simple words so important? Because it is ultimately the targeted consumer who can best thwart financial fraud. Too often consumers are too quick to provide data to scammers because of the sophisticated tactics scammers use. Here’s how best to protect yourself.
• Slow Down: Consumers should never rush to provide any personal, financial, or technology related information to any individual or organization. Fraudsters have an uncanny ability to coerce consumers into providing personal information. We often hear from fraud victims that they felt obligated, rushed or pressured to quickly provide the data. They feared that if they did not quickly provide it, the scenarios the fraudsters paint for them will come to fruition. For example, a popular scam is fraudsters saying the consumer’s bank account was compromised and they must quickly wire money to a “safe haven” in order to avoid all their money from being lost. They will even claim that the financial institution they are asked to wire money out of was at fault and they should not trust their financial institution. Another popular scam is consumers being told their computer was compromised and to continue to protect it they must quickly make payment to the scammer posing as an IT company or service such as GeekSquad. No reputable organization will ever pressure consumers to obtain personal information quickly. The first step to avoiding being scammed is to simply “slow down” and not rush to act. It’s also important to remember that in today’s connected world your online passwords and security codes should be treated as personal information. The password to your computer or online banking is just as vital today as a social security number.
• Stop: Often consumers will slow down the process and ask more questions as they get suspicious but then give out information to scammers a little at a time over the course of an email or text exchange or a phone call. Sadly, sometimes fraudsters prey on people’s desire to engage and talk to others. Often older consumers are an easier target as they tend to more readily pick up phone calls and engage. Consumers must “stop” engaging with the scammers even if they are talking nicely to them over a period of time. Consumers should simply “stop” engaging once being prompted to provide personal information.
• Escalate: Once you have stopped engaging, it’s time to escalate. This comes in many forms. Here at the credit union we have many members who will first check with us when they are asked to give out data. That is a form of escalation and we welcome it. All credit union employees are trained in fraud prevention and can provide assistance. Other forms of escalation include the local authorities. While law enforcement is overwhelmed with fraud cases, it is vital to report potential fraud to them so they can identify patterns and go after large perpetrators of fraud. The credit union routinely escalates to law enforcement when we identify scams. Another form of escalation is simply contacting someone you trust. This can be a friend or family member. Ask them if the scenario sounds suspicious? Tell them that you are concerned. Often the “trusted contact” can be the first step to stopping fraud. Also, to help law enforcement nationally fight fraud we urge all fraud attempts to be reported to the Federal Trade Commission at reportfraud.ftc.gov. The FTC shares those reports with 2,800 law enforcement agents nationally in an effort to prevent further fraud.
Unfortunately, fraud continues to happen at a record pace. Fortunately, it is very preventable. The targeted consumer is best equipped to stop the fraud before it starts if they “slow down, stop and escalate.” One major misconception about fraud is that the money is recoverable. Too often consumers believe that if they are scammed, the money will come back to them in a similar fashion as a compromised credit card. In most cases, that is incorrect. Once their money is wired, transferred or withdrawn directly from their accounts, there is often very little that can be done to recover it—the best protection is prevention.