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Last year, it is estimated that around 8 million people in America were the victim of identify theft. It's an issue that cost the nation around $37 billion. Most people have the mentality that it won't happen to them, but unless they take precautionary measures to help avoid the problem, they could very well be the next victim.
"Most people only think about financial fraud when it actually happens to them, and it can be quite devastating," explains Samantha Fraelich, CERTIFIED FINANCIAL PLANNER, Professional and Vice-President of Bernard R. Wolfe & Associates, Inc., a company specializing in offering wealth management strategies. "But the more steps you take to try and protect yourself beforehand, the less likely you are to become a victim."
Here are six ways to avoid being a victim of credit card and other financial fraud:
- Return their call. Credit card and other financial institutions will often call if there is any suspicious activity on someone's account. Many people may ignore these calls, but they are important to addressing the issue right away. Always call them back to see if you made the charges, or if they were made fraudulently.
- Eye your cards. Giving cards to waiters and others who take them out of sight may seem convenient, but it is easy for those credit card numbers to be written down and later used online. They even have access to the pin number on the back, making it easier. Be sure to keep your cards in your line of sight as much as possible
- Call with questions. If you find anything on your statements that seems odd or out of the ordinary, call the financial institution to inquire about it. They could be red flags that need to be addressed right away. Waiting could end up costing you.
- Watch online purchases. Only purchase from, and pay through, reputable sites and stores. They should be secure, so your credit card information is handled appropriately. Avoid clicking on emails that take you to Paypal, for example, and type the address in and go there on your own. That way you know you are at the legitimate site, rather than a fraudulent one.
- Trust your advisor. When you work with a financial advisor, they often have information about your finances and access to your important records. It is important to work with an advisor you trust implicitly protect your private information. Always work with a company that has a solid reputation in the field and has certified professionals that will personally assist you.
- Use a 3rd Party Custodian-The easiest way to avoid being the victim of a Bernie Madoff type of Ponzi Scheme is to always work with an advisor who uses third party custodians to hold your investments. You should never be making your check payable to the advisor himself when you're investing your funds. It should be made payable to an unbiased, third party custodian and never pooled with the advisor's other investors in one account.
"We certainly don't want to scare anyone about financial fraud," added Fraelich. "But it is definitely something that people should keep in mind and take the necessary precautions to protect themselves."
Bernard R. Wolfe & Associates, Inc. has provided financial management strategies and investment services since 1981. They assist a wide range of private and corporate clients with everything from estate planning and investment to divorce planning. The company also offers professional women's financial planning services, led by Samantha Fraelich, a CERTIFIED FINANCIAL PLANNER Professional.
