How Fraudsters Are Targeting Financial Advisors
Financial advisors need to be diligent as fraudsters increasingly target them to obtain client information for further fraud, according to new reports.
The Federal Trade Commission received close to three million complaints about financial fraud in 2018, according to FA magazine. And losses from fraud rose to $1.48 billion last year, a 38% increase over the year prior, the publication writes.
“Scammers are becoming increasingly cleverer,” Sherryl Ray, director of operations at EP Wealth Advisors, tells FA magazine. “We have to stop considering these scams as something perpetrated by one person and think of scamming in terms of large scale operations targeting a large audience of potential victims.”
Ray’s firm has already revamped its practices to protect clients, but she tells the publication advisors will also need to educate their clients about such scams. However, she says it’s essential advisors don’t scare clients unnecessarily, according to FA magazine.
Advisors should warn their clients — particularly senior investors — about scammers contacting them directly, Dan Moisand of Moisand Fitzgerald Tamayo tells the publication.
The FTC found that fraudsters are increasingly pretending to call from government agencies, such as the Social Security Administration and the IRS, according to FA magazine. Last year, such calls took the number-one spot from debt collection complaints received by the FTC, the publication writes.
Moisand suggests advisors tell clients to simply not answer phone calls from unrecognized numbers, according to FA magazine.