In a layperson’s language, financial fraud is a considerable offence of hacking another person’s financial transactions or accounts for a fraudster’s gain. In today’s digital age, financial frauds are increasing at an unprecedented rate, and it has become crucial for people to safeguard their financial information and remain vigilant at all times. Both organizations and individuals lose massive amounts of money every year due to financial fraud. Before getting into the details of how to protect oneself from financial fraud, let us look at the top five types of financial fraud, to begin with.
Financial fraud can be of several types, and it is important to know about them in detail for better protection.
It is a common financial fraud and is rampant because of the ignorance of credit and debit card holders. All that is essential to fall prey to debit or credit card fraud is for a person to lose their card or for a fraudster to steal somebody’s card and, after that, process unauthorized transactions. The key to dealing with credit or debit card fraud is immediately contacting the bank about any mishaps.
It is a financial fraud that takes place within the investment sector, as fraudsters have the potential to create an elaborate investment scheme that promises a high return rate for a fixed-term investment. However, in reality, the entire scheme is a hoax, and the fraudster uses the money for their own personal gains.
Another common financial fraud occurs when a fraudster manages to access enough of your financial and personal information to create a fake card. It is a highly deceptive form of financial fraud as, more often than not, the victims are not even aware of what is happening until it is too late.
Owing to the boom of online banking and the ever-expanding cyber world, fraudsters have been able to co-opt cyber outlets to con online bankers. Phishing is a way to get an individual’s banking information through incredulous means and rob them of their precious money.
Now that we know about the four types of financial fraud let us look at the five tips that can help a person dodge financial fraud.
It is noteworthy to remember that although the Canadian government tries to protect citizens from financial fraud through a system of laws, advisories, and reporting mechanisms, it relies on an individual to stay alert and protect their financial information. Consequently, when you give out your personal information to any private company, there is no guarantee of how much they are doing to keep that information. As a result, dealing with financial information can be a tricky situation, and some assistance from a professional financial advisor is never a bad idea.
To begin with, once something goes into the internet, it is never lost. So, remember that when you put your personal information in the cyber world, it is always vulnerable to nefarious attacks. Despite trying your best to protect yourself with privacy settings, the chances of falling prey to identity theft and hacking are pretty high. Thus, think twice before sharing your personal information, such as birthday, location, workplace, and likewise. Do not forget to turn off the geotagging feature on your photos to avoid letting people know when you are not at home.
Do not forget to shred anything with a name on it. Moreover, if something has a barcode, do not forget to shred it, as well. Do not leave your boarding pass in the trash at the hotel. Such tiny steps may seem insignificant, but they can significantly help keep your finances safe.
You should check your credit card report in a timely fashion. For instance, if you travel frequently, verify your credit card monthly or enroll in a credit monitoring service. You can also turn on the fraud alerts on your credit card report, which is an inexpensive yet effective step in protecting your financial information. Likewise, you can also place spending alerts on your credit cards. Most banks set an alert at a predetermined threshold above your card’s use. Such baby steps are crucial in protecting oneself from major financial frauds.
Similar to telephonic swindles, online frauds via links are increasing at a rapid rate. In the past, a phishing email might have been littered with typos and obvious grammar mistakes. However, nowadays, online scams have become so sophisticated that they can go undetected even by the most vigilant pair of eyes. As such, whenever you receive an unprecedented request for personal data and information, contact the bank immediately to verify the claim’s authenticity.
It is imperative to review your bank transactions and account statements frequently. In addition, setting up a budget is a good idea as it not only controls your spending but also makes it easy to identify legitimate charges on your credit accounts.
There we have it, the top five tricks to dodge financial fraud. It is noteworthy to remember that charity begins at home, and this statement has veritable significance when we talk about protection from financial scams. By being alert, not sharing any private information online, or not being swayed away by phishing calls or emails by verifying their claims, we can protect our finances. However, it is always a good idea to get help from professional financial advisors as they know how to deal with sensitive information. Lastly, it is essential to remember that even people you know or those who are close to you can indulge in financial scams, so it is crucial to not share information, even with family or friends, until it is a do-or-die situation. In today’s digital world, where everything is interconnected, it is best to keep certain things to yourself.
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