Happy holidays to you and yours. I’m still a Seinfeld fan and savor re-watching the Festivus holiday episode from 1997; it has aged well.
In the episode, frustrated by the commercialization of Christmas, Frank Castanza creates his own holiday tradition entitled “Festivus”.
The tradition entails an “airing of grievances” among family members, feats of strength and even a Festivus holiday pole instead of a tree. The climatic dinner scene is one of the funniest moments in sitcom history.
The Festivus story is even richer because it’s a real thing. In the 1960s, an obscure Reader’s Digest editor, Daniel O’Keefe, created the quirky celebration for private family events. His son was a writer on Seinfeld and was inspired to write the Festivus script.
While the Seinfeld Festivus scene was mostly embellished for comedic effect, the O’Keefe family actually held an airing of their grievances! Festivus has become a cult holiday tradition; we even hold an “airing of grievances” in our staff meetings.
There’s nothing funny about the surge in financial fraud today. Fraud is now big business and scammers are more sophisticated than ever.
Their arsenal is high-tech, used to trick unsuspecting people into sending cash, stealing money directly from financial accounts and/or revealing key personal financial information.
The reason for the rampant fraud activity is multi-fold. Technology is cheap, personal information is everywhere, and too many people - especially the elderly - are vulnerable to manipulation.
The good news is that almost all financial fraud can be thwarted with simple smart habits and more common sense. Our early holiday gift is this quick prevention guide across the fraud spectrum.
E-mail. Phishing e-mails coax you into clicking on a hyper-link or downloading a file. The goal is to have you log in to your financial account or enter log-in credentials into a replica fake site.
The criminal can then change your e-mail password and log in to your accounts causing financial harm.
An ill-advised download may install malware on your computer to spy on your online activity and steal log-in information.
Defensive Measures:
- Never click on links in an e-mail or download files sent via e-mail, no matter how real they appear.
- Instead, type in the financial company’s website in your browser to log in.
- Use multi-factor authentication (“MFA”) to have SMS text codes sent to your phone as part of the login process.
Telephone Scams. It’s startling how many people get ensnared in the “call us because your account has been hacked” scam.
Even otherwise smart people get ensnared in the “call us now” message, which typically begins as a text. A recent widely circulated story involved an experienced financial journalist who fell for a text / phone call scam and, within hours, handed $50,000 in cash to a stranger. Unreal.
Defensive Measures:
- Be more skeptical, even cynical, and not naïve when it comes to text messages. The IRS, FBI or your bank are not going to contact you demanding immediate action or to recommend a financial transaction.
- If the caller references the names of your children, it’s surely because they pulled them from your social media pages.
- Realize that if your account has truly been hacked, you won’t hear about it via a text message.
Elder Scams. Sadly, telephone call scams targeting elders are proliferating. We’re hearing horrible stories, including one where a women sent $80,000 to “Elon Musk”.
Defensive Measures:
- Switch an elderly relative from a landline to a mobile telephone; a landline offers no scam protection.
- Turn on the mobile phone’s security technology, including call silencing for non pre-approved callers and use a call blocking app.
- Freeze their credit with the credit bureaus, using your durable power of attorney authority if necessary.
- Add a trusted contact for all bank and investment accounts.
Bank / Credit Card Fraud. Frequent credit card use is going to invite fraud, but the strict loss limit laws make it more of an inconvenience than a material financial threat.
Bank account fraud, however, is much more dangerous because there’s no similar loss protection.
Defensive Measures:
- Use MFA on all bank accounts, no exceptions. Have the code sent via text to your mobile phone – not your PC.
- Use a strong password and change it regularly.
- Use a credit card for large purchases, not a debit card.
- Freeze your credit.
ACAT Investment Transfer Fraud. Investment theft is still a small but growing scam that is mildly concerning, chiefly because there’s no failsafe way to prevent a fraudulent investment account transfer on the front end.
Worse, the fraud loss is not covered by SIPC insurance.
Fraudsters open a new brokerage account in your name using stolen identity data, submit an ACAT transfer request, move your investments, sell them, and withdraw the proceeds.
Defensive Measures:
- Shred your investment statements and protect your account numbers.
- Switch to online account statement delivery with notifications – no more paper statements.
- Using strong passwords, change them often and adopt MFA protection.
Wire Transfer Fraud. Another rising fraud category, often due to sloppy practices by your bank or investment firm. This is especially dangerous because it’s nearly impossible to track down fraudulently wired cash.
The easy defense is to triple check the recipient’s deposit wire instructions for legitimacy. Always call your banker / advisor and verbally approve the wire transfer, not via an e-mail or text.
Real Estate Title Fraud. A less common fraud is the theft of your real estate deed. A criminal forges a notarized deed document, files it with local recorder of deeds office and then either takes out a mortgage loan or tries to sell it.
A fraudulent sale is highly unlikely because settlement agents require in-person ID verification. A fraudulent mortgage loan is a more serious threat, but a credit freeze will thwart it.
The common thread running through these fraud prevention tips is to be smart about protecting your financial information, freeze your credit with the major credit agencies and use MFA whenever possible, all with a dollop of common sense.
Happy and safe holidays to everyone, even you Festivus observers.
Best, Tim