Taking steps to improve financial safety

Investors work hard to plan and achieve their financial goals. One critical way to ensure those goals stay on track is maintaining good security habits both online and offline. Consistent attention to proper security hygiene can help provide peace of mind and help secure assets against the uptick in foul play seen over the last several years, especially for senior investors.

“In recent years, we have seen substantial increases and growing sophistication across the industry with investors getting exploited by scam artists,” said John Ginelli, head of Vanguard Investor Protection. “Seniors are targeted more frequently, so it’s important to take extra steps to ensure that their transactions are legitimate.” 

Be cautious of these red flags associated with scams:

• Unexpected contact: Certain scams start with contact from someone an investor does not know, which may occur via email, phone call, and text. A legitimate financial institution or government will never contact you asking for logon credentials, security codes, or Social Security numbers.

• Emotional manipulation: With this common online exploitation tactic, a fraudster aims to gain a close short-term relationship with an investor with the promise of a long-term partnership.

• Urgency: Scammers will often apply pressure to send money or share private information, using “limited time offers” or threatening law enforcement action to convince an investor to act quickly.

• Complicated payment methods: Be wary of anyone asking to be paid in unusual forms such as gift cards, checks, cryptocurrency, and gold.

To add an extra layer of protection, investors should consider adding a trusted contact. A trusted contact is a person designated by the investor whom an institution can contact in the event of suspected financial exploitation, imposter scams, or cognitive decline. Additionally, designating a power of attorney to authorize an individual or entity to help manage accounts in case of illness or incapacitation keeps the investor’s assets in trusted hands. 

“Cyber fraudsters are con artists at heart who prey on investors’ kindness, desires, and vulnerabilities,” said Vanessa Richards, global head of Fraud Prevention and Physical Security at Vanguard. “Always trust your gut—because if it seems too good to be true, it likely is.”

Here are some other ways investors can keep their financial data safe:

• Never click on suspicious links. Report and then delete phishing emails and texts and ignore unsolicited pop-up requests to install software.

• Be wary of requests for personal or financial information or money. Never give personal information to unknown callers, and don’t send money to someone you haven’t met in person.

• Add an extra layer of security by using two-factor authentication to require a code sent by text, call, or email during logon. Update passwords frequently and avoid public wi-fi networks.

Staying aware of how to protect accounts from fraudsters is crucial for investors to preserve their financial goals and safeguard their personal financial information. For other tips on personal data protection and proactive measures to help avoid financial theft, visit our Security Center.