Three Ways to Help Protect Yourself from Financial Scams

Financial scams have always been around, but unfortunately, they are getting harder to spot.

Scammers can make a phone call or text appear to come from your bank or a company you do business with. With artificial intelligence, they also have more tools available to make these scams look and sound legitimate.

Retirees can be especially attractive targets because they may have accumulated significant assets over their lifetime.

While there is no way to completely protect yourself from every scam, there are some simple steps you can take to make it much harder for someone to steal your identity or access your money.

Here are the three things I would focus on.

1. Freeze Your Credit and Protect Your Online Accounts

If you haven't already frozen your credit, I would start there.

A credit freeze restricts access to your credit report, making it more difficult for someone to open a new credit card, loan, or other account in your name.

You need to freeze your credit separately with each of the three major credit bureaus:

• Equifax – Freeze Your Credit

• Experian – Freeze Your Credit

• TransUnion – Freeze Your Credit

 It's free to freeze your credit, and doing so doesn't hurt your credit score.

A credit freeze also isn't permanent. If you're buying a car, refinancing your mortgage, opening a new credit card, or doing something else that requires a credit check, you can temporarily lift the freeze.

We recommend that our clients leave their credit frozen unless they need to access it.

The other thing I would do is enable two-factor authentication (2FA) for your important online accounts.

You've probably already used 2FA without thinking much about it. You enter your username and password, then receive a code on your phone or in your authenticator app that you must also enter. That extra step helps protect your account if someone gets your password.

At a minimum, I would turn it on for your bank and investment accounts as well as your email. Email is particularly important because if someone gains access to it, they may be able to use it to reset passwords for your other accounts.

2. Be Cautious with Incoming Calls, Texts, and Emails

If someone contacts you asking for money, personal information, a password, a verification code, or access to one of your accounts, don't automatically assume they are who they say they are, even if the phone number or email looks legitimate.

Caller ID can be spoofed, email addresses can look very similar to real ones, and text messages can appear to come from companies you recognize.

For example, you might get a call that appears to be from your bank telling you there has been suspicious activity on your account. The caller may even know your name or other personal information. Rather than continuing the call, hang up and contact the bank yourself using the phone number on the back of your debit or credit card, or go directly to the bank's website or app. Don't use a phone number or link provided by the person who contacted you.

The same approach applies if someone says they're calling from the IRS, Social Security Administration, your investment custodian, Amazon, Microsoft, or another company you recognize. If you receive an unexpected email or text, avoid clicking the link and go directly to the company's website or app instead.

Another common warning sign is urgency. Scammers often want you to react before you have time to think, so they may tell you that your bank account has been compromised, you owe taxes, a family member is in trouble, or you need to move money immediately.

If someone is pressuring you to act right away, take some time to verify what's going on before doing anything. A legitimate issue can usually wait a few minutes while you independently confirm that the person contacting you is who they say they are.

3. Pause and Ask Someone You Trust

If something doesn't seem right, don't feel like you have to handle it by yourself.

Before you send money, provide personal information, or give someone access to an account because of an unexpected phone call, text, email, or pop-up, talk to someone you trust. That might be a family member, your financial advisor, or your bank using a phone number you know is legitimate.

Be especially careful if someone asks you to wire money, buy gift cards, send cryptocurrency, or transfer money to a supposedly "safe" account. Those are good reasons to stop and get someone else involved before doing anything.

You should also get into the habit of checking your accounts regularly. Many banks and credit card companies let you set up alerts for purchases, transfers, or transactions over a certain dollar amount. I like this because you don't have to remember to constantly check your account, and if something unusual happens, you may find out about it quickly.

If you haven't done these things yet, I would start with the basics by freezing your credit and turning on two-factor authentication for your most important accounts. From there, get into the habit of being cautious when someone unexpectedly contacts you about your money or personal information.

Most importantly, if you're ever unsure whether something is legitimate, don't feel pressured to figure it out on your own. Take the time to verify what you're being told and ask someone you trust before sending money or providing access to an account.