Impersonation fraud is on the increase, so we all need to do whatever we can to reduce the risks of becoming a victim.
But, before I get into what is being done to prevent it from happening, here is the background to the extent of fraud impersonation.
There were over 3,800 reported cases of fraud impersonation in the first six months of 2018 – And that’s just the cases that were reported! In the first six months of 2018, there were 3,866 cases of impersonation scams reported contributing to an unbelievable £500 million being stolen by fraudsters. Yes, you did read that correctly, £500 million.
Impersonation scams happen when the fraudster manages to hack into an individual’s email account, pretending to be the individual, requesting the withdrawal of funds from an account. Unfortunately, it is still on the increase, so we need to be aware that this type of crime could affect any of us.
How does impersonation fraud work?
- Firstly the fraudster hacks into your email account and obtains information about your investments from emails that you have previously sent.
- Impersonating you, they then send an email to the financial adviser requesting funds urgently.
- They request that funds are paid into an account that funds are not normally paid into.
- The email often asks for the client not to be contacted, usually for some elaborate reason.
- They can even provide documentation with signatures on as they could have stolen your signature from other documents that they have managed to extract from your email account.
- Other documentation required is often certified as further proof of evidence, all fraudulently created.
- Furthermore as they have hacked your email, they continue to monitor and respond or delete emails to ensure that the fraud is not detected.
- Unfortunately the funds are often long gone before the fraud is identified.
What are we doing to protect you from impersonation fraud?
We need to be extra vigilant to ensure that you are protected as far as possible. We have the following process in place to look after our clients.
- All emails received from clients requesting the withdrawal of funds is checked for an unusual style of writing, spelling and grammar. Even the incorrect use of uppercase and lowercase letters.
- We check the tone of the email to see if it is different to the usual style of correspondence.
- We check to see if the email contradicts the financial plan that we have agreed with the client.
- We would be immediately suspicious if the email from the client specifically asked us not to call them, especially if they claimed to be unobtainable for a reason such as being abroad.
- We check that the bank account details for the payment of funds is not a different account to normal.
- Finally if we still remain suspicious, we do ring our clients to confirm their intentions.
I am pleased to say that we have never had an attempted fraud on one of our clients, let alone any of our clients actually become the victim of a scam. However, we have to be ever vigilant as financial crime continues to increase.
This article has been prepared in good faith and based on Midlands Investment Agency’s understanding of the law and interpretation thereof at the time of creation. The contents should not be regarded as specific advice and we always recommend that specific advice is sort from a qualified professional. No responsibility can be accepted by Martin Dodd or Midlands Investment Agency Ltd., for any loss that may occur by a person acting or refraining from acting on the basis of this article.
Martin Dodd author of the Financial Freedom Formula