Outside voices and views for advisers

Help protect clients from scam attacks

If we continually educate our clients, we can help them become more aware

Mar 7, 2017 @ 2:20 pm

By Sheryl Rowling

The Securities and Exchange Commission is holding advisers to higher standards of care related to cybersecurity. Yet, while we put more and more protections in place, our clients are facing ever increasing scam attacks, whether through the internet or by phone.

Although it is not in our official job description to protect clients from personal fraud assaults, as a trusted adviser, we should do our best to keep them informed. In my firm, we often include scam warnings in communications to clients. Unfortunately, in spite of this, we occasionally find that a client has become a victim.

There's a few recent scams that we've seen and heard about from our clients. The first example is an old scheme; apparently still out there.

(More: Most financial fraud victims share specific character traits)

Yesterday, a client stopped by the office to inquire as to whether he would be entitled to a tax deduction for fraud. Regrettably, the client fell for the "grandparent fraud." He received a phone call from an "out-of-town sheriff" stating that his grandson had been arrested for intoxication. Because the sheriff confiscated his cell phone and the grandson didn't want his parents to know, he gave them my client's contact information. In order to bail the grandson out, my client would need to wire money immediately. As a loving grandparent, he did.

What my client should have done is call his grandson. The grandson would have answered his cell phone and the scam would have been thwarted.

Another fraud is aimed at successful working people. The scammer will email the target from what appears to be the head of the employee's company. The email says that because the head trusts the employee, he/she is asking the employee to contact their attorney immediately — and the attorney will explain everything. When the employee calls the number, the "attorney" states a plausible reason why the employee has to advance funds on behalf of the company, which will be reimbursed within a couple of weeks. As a loyal employee, the target often agrees to wire money.

What the employee should do is call the head of the company. Thus, the swindle would be prevented.

(More: Even capable seniors vulnerable to fraud, research finds)

No matter how old the scam, they seem to never go away. All the criminals need is one or two suckers to believe the ploy. Current schemes still include fake IRS email notices and PayPal/credit card billing update inquiries.

We can't singlehandedly eliminate financial fraud. However, if we continually educate our clients, we can help them become more aware.

Sheryl Rowling is head of rebalancing solutions at Morningstar Inc. and principal at Rowling & Associates. She considers herself a non-techie user of technology.


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