In 2018, the Federal Trade Commission processed 1.4 million fraud reports with losses totaling $1.48 billion. Fraud complaints in the category of identity theft included formjacking, in which cybercriminals steal sensitive information from online payment forms, account takeovers through data breaches, and new account fraud in the form of credit cards, mortgages, student loans or car loans. For high net worth individuals who are impacted by fraud, the costs can be staggering. One fraudulent wire transfer could result in hundreds of thousands of dollars lost in the blink of an eye. For this reason, affluent individuals should take extra precautions when it comes to security.
Why do the Wealthy Become Targets?
While other groups, such as senior citizens, may be considered more vulnerable, and therefore more susceptible to fraud, there are certain reasons cybercriminals are drawn to the affluent population. Those in a high profile role in a high profile industry, especially those with a net worth of $1 million or more, are uniquely targeted for fraud. This could be the result of:
- More exposure – they often have a high social media presence, with a larger group of contacts, or kids that overshare personal or family information online
- They deal in larger amounts of money – wealthy people may wire funds often enough, and in large enough amounts, that they may not notice immediately if an account was compromised
- Family and business accounts may be too connected – often times a business owner will use the same accounts for business and personal use. This can allow a cyber attacker to gain entry through a family member’s account and install code that can then access the business account.
Steps to Take to Protect Yourself From Fraud
- Educate yourself and family members – make sure the kids understand that sharing too much personal information can have lasting consequences. Financial contacts should be advised to think carefully before responding to “urgent” requests for information and that all transaction requests are verified.
- Maximize account protection – change and strengthen passwords on a regular basis, use multifactor authentication, take the necessary precautions to strengthen your home network, and separate business and personal accounts
- Protect yourself with specialized fraud coverage for high net worth individuals – Even if you are diligent about cyber safety, there is always a real threat that your identity or assets could be compromised. At Webb Insurance, we can help high net worth individuals and their families stay protected against the consequences of fraud. Fraud and cyber fraud coverage provides protection against financial losses due to fraud or a cyber attack.
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