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Creating a Fraud Prevention Game Plan

  • By The Mill Financial Partners
  • August 4, 2023

“An ounce of prevention is worth a pound of cure.” -Benjamin Franklin


As we enter the age of artificial intelligence, fraud prevention will play a more vital role in our lives. It’s not a matter of “if” scammers will try to get you and your loved ones’ money, it is a question of WHEN.

Unfortunately, the approach to fraud remains reactive. Instead of investing the required time and resources to proactively prevent it, many individuals adopt a mindset of dealing with the issue only after falling victim to it. The majority opt for blissful ignorance, seeking happiness in avoiding the harsh reality and refraining from planning ahead.

The issue with this approach is that some things are irretrievable.

Sure, you might lose thousands of dollars that you may never regain, however, my primary concern lies in the emotional and psychological burden of becoming a victim of fraud, and the lasting impact it can have on both the individual and their family as time goes on.

I remember when I almost became a victim of wire fraud. My wife and I were about to purchase an unbelievable home. We had even become emotionally attached to this home. The day prior, we received wire instructions from the attorney’s office for the exact amount we had previously discussed, and it said to make certain to wire the funds before noon or else we may not be able to close the next morning. I was in the middle of a remarkably busy day and in between meetings, so I made certain to wire the money right away.

Time stopped when I got another e-mail from the attorney’s office asking me again to wire the funds. At first, I was angry because I had already wired the money and checked that to do off my list, but then I became concerned. I then cross-checked the account and routing number from the previous email and realized they were not the same. Panic ensued.

Some fraudsters had been monitoring the closing attorney’s emails and knew the exact address, the time of the closing, and the exact amount of money that needed to be wired. Furthermore, they had not only copied the signature of the person we had been working with, but they also included the signature of the assistant who was filling in that day for our closing.

If that wasn’t enough, they created Gmail email accounts that showed up as the name of my realtor, my mortgage lender, and the closing attorney. Only after you clicked them did you realize that they were Gmail accounts.

The chef’s kiss to the entire operation is that they had stolen the identity of someone who had a very regal/attorney-sounding name and had died a few weeks prior. They then used that identity to open a bank account at a well-known credit union. If they can manage to deceive me, someone who is professionally trained to identify fraud, they can deceive anyone else as well.

I remember the feeling in my gut that day. It is a feeling that I will never forget.

When I had to tell my wife what happened, I broke down in tears. I was completely embarrassed and felt like an idiot. I felt like I had failed my family.

I am sharing this personal and vulnerable story with you because one of the most significant hurdles in combating fraud is the underreporting of such incidents. It is crucial that we openly discuss these matters and recognize that awareness stands as our most potent weapon in the battle against fraud.

Luckily, we were able to act in time. We froze the funds at the other bank, and we were able to go forward with the home purchase. Looking back, if we had not acted in the manner and time we did, not only would I be out of close to $100k, but we also would not have been able to purchase that home that has become a great rental for us which has appreciated $150,000 over the last couple of years. There are some things that you just cannot catch up from, and this might have been one of those instances.

To spare you from enduring what I went through, I present a 5-step game plan designed to safeguard you, your finances, and your game plan:

1.  Enable multi-factor authentication:

Yes, two-factor authentication can be annoying. Now, not only do you need to recall your password, but you also have to go through additional steps like receiving a text, email, or phone call for verification. Despite the extra time it takes, this remains the most effective method to safeguard your accounts.

2. Actually, listen to the experts when selecting passwords:

If you have been in any fraud training recently, the common theme is to think of a catchphrase for your password. The longer the password, the better. It’s also advisable to have different passwords for different accounts so that if somebody guesses one, they do not have access to all of them. Lastly, be careful of where you store these passwords. Sometimes when you use the notes page on an iphone, it will send an update of that note to your Gmail.  If somebody is able to hack into your Gmail account they will have the passwords for every single account that you own.

3. Do not trust and verify:

Keep your antennas up for suspicious emails, suspicious links, and suspicious phone calls. If something seems out of the ordinary, it probably is. Companies spend thousands of dollars each year to train their employees not to fall victim to phishing and whaling scams where people can get into your computer and track your activity. Remember, these fraudsters are not just going after businesses, they’re going after people too and they don’t care if you are a nice person, they might even prefer it.

4. ALWAYS call before you wire money:

If you do nothing else, please promise me that you will learn from my experience and call before you wire money. Do not call the number on the e-mail that you receive, rather look the business up online or call the number of the person that you have been working with to confirm the wiring instructions. Once that money is gone, there is no promise of getting it back. It is not your bank’s fault for listening to the wire instructions that you gave them, and there is no insurance on wire fraud.

5. Talk to your family – both parents and kids and consider having a password:

My fear of artificial intelligence began when I saw a segment on 60 Minutes highlighting the way AI (Artificial Intelligence) is used to imitate someone’s voice. They called an assistant of the show from a number that popped up as her boss’s name. Using her boss’s voice, they were able to get sensitive information from this assistant.

Although a harmless test, they were highlighting a new scam where fraudsters were getting grandkids’ voices from social media and using those voices to do a deep fake phone call to their grandparents claiming that they were in a precarious situation and needed money immediately. Often, it had to do with jail and the fake voice would ask them not to call their parents or anyone else about the incident.

This is why it is important to talk to your spouse, your parents, and your kids about fraud. It may not seem like a fun conversation at dinner, but it is essential that we discuss this and create a game plan to prevent it. Once again, we can live happily believing that ignorance is bliss, or we can face reality and create a game plan. I highly recommend that you and your family develop a password or a catchphrase that you can utilize for emergency verification purposes.

In conclusion…

This is certainly not the most uplifting article I’ve ever written, but if it helps one person prevent a fraudulent attack then writing it will have been well worth it. Stay informed, stay alert, and please please PLEASE create a game plan to protect yourself from the bad people.

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