The Cyber Trap: Avoiding the Bait in a Scam-Filled World

As investors, we face the threat of cyber criminals every day. It is important to stay aware, updated, and educated on the different types of scams that hackers are using to access your private data, which can include sensitive information such as your Social Security number or even your bank and investment account details. You want to protect your hard-earned money, so brushing up on these tactics used by scammers will go a long way in terms of protecting yourself and your assets.

Why Do Scammers Scam?

Hackers and scammers usually operate for financial gain, and they will stop at nothing to accomplish this task. It is very important to understand the why first, and then the how. The why is important because this is how they can manipulate their targets. As an investor, it is important to have trust in your financial advisor as they are the people who are ultimately planning your financial life. Whether you are planning for retirement, for college, or even just for growth in the market, you are choosing to trust your financial advisor to give you the correct advice. Hackers and scammers will commonly prey on this trust that you have built with your advisor to then steal what is rightfully yours. They will also target the trust you have with your family members and your friends. Let’s look at some data from 2024, which showcases how common scamming has become, and then we will look at ways to mitigate the chances of getting scammed.

The Data

The FBI released its annual Internet Crime Report via their Internet Crime Complaint Center for 2024, and the data shows that there was a total of $16.6 billion in losses in 2024 connected to cybercrime complaints. This is a 33% increase from 2023, with a total average loss of $19,372 per case. Of the 859,532 complaints, the number one loss category is investment loss, totaling almost $6.6 billion. You may be thinking to yourself that you’ll never get scammed, but this is where it is important to pay attention. You may not get caught up in a scam, but your family members or friends might, especially if they are older in age. The number one age group that filed scam complaints last year was 60+, totaling $4.8 billion. This connects directly to different trends that are reported, one being scammers targeting senior citizens and claiming to be a family member, then requesting money for several different purposes such as an injury or a financial or legal crisis. There are other trends, such as call center scams, where scammers will impersonate different financial businesses, cryptocurrency being the popular category. As you can see, these scammers will stop at nothing to get what they want. They will prey on those who are unaware of the risks in the investment world and will take advantage of that.

How to Protect Yourself

Although the evolution and inevitable threat of cybersecurity attacks is daunting to think about, the ability to recognize and react accordingly is crucial – additionally, here is a list of preventative measures you can employ to protect your personal and financial information.

• Utilize a password manager to eliminate the redundancy of existing passwords.
• Enable two factor authentication, which adds a second layer of security to any website or institution you have an account with.
• Be aware of phishing scams. Do not click random links or download random email attachments.
• Always use a secure internet connection when logging into sites that contain personal information. Avoid logging in on public Wi-Fi and use a VPN if needed.
• Update your system software regularly. Keep your operating systems, browsers, and apps up to date.
• Lastly, if you ever have an ounce of suspicion, call a family member or friend first. Do not provide sensitive information over the phone or through text or email.

The rise in cybersecurity attacks reiterates the importance of remaining vigilant when proceeding with your investments. Increased awareness of various tactics scammers may use is critical, and it is important to take preventative steps to protect yourself.

Sources:

2024_IC3Report.pdf

FBI Releases Annual Internet Crime Report — FBI

Disclosures:

Apella Capital, LLC (“Apella”), DBA Apella Wealth is an investment advisory firm registered with the Securities and Exchange Commission. The firm only transacts business in states where it is properly registered or excluded or exempt from registration requirements. Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. Apella Wealth provides this communication as a matter of general information. Any data or statistics quoted are from sources believed to be reliable but cannot be guaranteed or warranted.