Cybercrime Is on the Rise. Are Your Clients Safe?

The digital age has fundamentally altered how criminals steal money. They increasingly perpetrate technology-enabled scams to separate unsuspecting victims from their funds. Whether phishing, vishing, smishing, or catfishing, cybercriminals’ tactics constantly evolve and can have catastrophic effects on individuals and organizations. As a financial professional, you can play an important role in educating your clients about the threat of cybercrime and the importance of smart online habits. 

Cybercriminals manipulate human emotions to lure individuals into clicking malicious links, opening harmful attachments, and submitting sensitive information into fraudulent data entry forms. A cybercriminal may send your client an email that purports to come from their bank or investment firm, prompting them to enter their login details, or impersonate a friend to ask for funds. This deception plays on the human instinct to help those we know. The elderly, who are typically less attuned to the signs of online fraud, are especially vulnerable to all these practices.

To help protect yourself and your clients, get familiar with the common forms of online fraud, including:

• Non-payment/non-delivery: selling something online and never obtaining the funds (non-payment), or never receiving something purchased online (non-delivery).
• Personal data breach: gaining access to sensitive information, such as credit card or bank account numbers.
• Identity theft: using stolen personal information to assume someone’s identity and make purchases or take out loans in their name.
• Confidence/romance fraud: luring someone into a relationship (business/personal) via a fictitious online persona (also known as catfishing).
• Ransomware: using malicious software to block access to a computer system until the victim pays a sum of money.

Fraud has proliferated as social media has grown in popularity. To help keep clients safe, suggest the following guidelines:

• Remain skeptical about any investment offer over social media—especially if unsolicited.
• Know who “friends” are on platforms such as Facebook or LinkedIn. Cybercriminals often create fake, duplicate profiles to get an individual’s personal information. Beware of friend requests from existing connections.
• Verify every friend request to confirm the person’s identity by calling or texting them using a known number.
• Practice good data hygiene by installing reputable antivirus software and enabling multifactor authentication for online accounts.

With cybercrime on the rise, financial professionals must be alert–and encourage clients to maintain vigilance. Educate clients on how trusted partners communicate by explaining your approach. What are your dos and don'ts? Tell clients about your firm's communication channels so that they're cautious if they hear from you another way (for example, if your firm doesn't communicate with clients via TikTok, but your client receives a TikTok video that appears to be from you).

While the threat of online scams is unsettling, risk can be minimized with diligent behavior. Efforts to keep your practice and your clients safe from cybercrime can positively impact your relationships and foster ongoing trust.