Keeping your money and personal information secure goes beyond passwords and security software. It requires vigilance and understanding of some of the tactics fraudsters use.
Many investment fraud schemes involve unregistered investments that promise high returns. Fraudsters also may use social media to promote community-based investment fraud, which targets people with common ties such as ethnicity, religion, military service, sexual orientation, and age. This is why it’s recommended to consult a professional to handle these transactions or ask which platforms they use, such as Bipsync’s investment research platform, for a secure investment.
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When criminals steal an individual’s identity, they may make fraudulent purchases or open new credit cards and bank accounts in their name. These activities are called financial identity theft and can have significant economic impacts. They can also hurt an individual’s credit report.
Criminals may start by making small charges on a credit or debit card to see if they can get away with it before the victim notices the activity. In addition to financial costs, victims can experience other intangible effects like anxiety, anger, and fear. Moreover, resolving issues with financial institutions and creditors can be time-consuming. The results of an identity theft incident can also cause emotional distress, especially for older adults.
Research has shown that the effects of identity theft are more severe for lower-income individuals and people of color. However, most studies have not examined the financial and psychological impact on older adults. Using data, researchers analyzed how socioeconomic status, demographic characteristics, and incident-related factors relate to the total amount stolen, out-of-pocket costs, and emotional distress for people aged 65 or older.
They used logistic regression to estimate the relationships among these variables. They also asked respondents if they experienced credit- or banking-related problems such as being denied credit, loans, or a checking account, paying higher interest rates, or having checks bounce. They were also asked if they contacted their financial institution following the incident.
Fraudulent investment schemes
Fraudulent investment schemes can be devastating, leaving you with a net worth far lower than you started with. Whether you were saving for retirement, hoping to leave a legacy for your children, or trying to pay for college tuition, losing these funds can have long-term consequences on your finances. Moreover, fraudsters can use stolen identity information to take out loans and empty your bank accounts. Protecting yourself against investment scams can help you regain control of your finances.
Investors often educate themselves about types of investment fraud, recognizing the importance of being aware and vigilant against various schemes and deceptive practices that can compromise their financial security and investments.
A fraudulent investment scheme promotes an unregistered and often fake investment opportunity that promises high returns with low risk. It may be announced by mail, phone, e-mail, or through face-to-face salespeople. It is often a Ponzi scheme, which steals money from new investors to pay existing investors. In addition, it can be a pyramid scheme, in which each level of the pyramid gets paid by recruits and pays commissions to other participants in the scam.
Another common investment scam is broker embezzlement, in which a trusted intermediary steals lawfully obtained assets for unauthorized personal gain. This can include tampering with documents by changing the date, name, or address or creating fictitious service invoices. This type of fraud is prevalent in online transactions. If you receive investment information through social media, look for edits and markings that indicate the document has been tampered with.
Scam artists use various methods to get people to hand over money. They can pretend to be the census, local utility companies, or banks. They also use social media to target people. These messages are designed to trigger fear and panic to steal personal information or money. Never click on a link in an unsolicited message, as it can lead to a scam website and give the scammer access to your personal information.
Scam artists often target groups with common characteristics. They may try to convince members of a church, sports team, or other group that they are trustworthy and will make them rich. They also target people who have lost money in previous investments. They can ask them to invest more once they have a person’s trust. The scammer will then take the money and disappear. These scams are known as affinity fraud.
Another type of investment fraud is called a pump-and-dump scheme. The scammer will buy cheap stocks and then lie about the stock’s quality to push its price. Once the price peaks, they will sell off their shares and leave you with worthless stocks. The famous Bernie Madoff Ponzi scheme was a pump-and-dump con.
Scams that target the elderly
Older people are often targeted for financial scams because they have significant amounts of money in their accounts. They also have a higher risk of dementia and poor cognitive functioning, making them vulnerable to financial exploitation. In addition, the vast majority of senior fraud victims are not strangers; over 90% of all reported a family member or acquaintance committed elder abuse. Moreover, these crimes go unreported and are challenging to prosecute, leaving the victim with little to no chance of recouping their losses.
One of the most common scams involves a caller posing as a government representative, such as the Internal Revenue Service or Social Security Administration. These scams can drain the victim’s identity and bank account. Another common scam involves the use of fraudulent substances to treat health problems, such as pain or depression. The FDA does not approve these drugs, and they can cause serious side effects.
These types of scams are a constant threat, and the number of people they affect grows yearly. However, seniors can protect themselves by maintaining a healthy dose of skepticism and learning to recognize red flags that could indicate a scam. In addition, they should keep their financial records safe and notify their financial institution if they suspect any suspicious activity.
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