We recently wrote about ‘boiler room’ fraud, which is a sophisticated scam that aims to relieve investors of substantial sums of money. However, with an economic downturn looming and inflation running at relatively high levels, we can expect an increase in the level of criminal activity, as they seek new ways of generating an income.

‘Boiler room’ fraud depends, for much of its success, on investors seeing an opportunity to make money from ‘inside information’ ahead of the market and thereby benefiting from the sudden upswing in the value of shares that either do not exist at all, or are in a worthless business.

They now have a counterpart in ‘recovery rooms’ which offer (for a substantial up-front fee) to recover the money you lost in the ‘boiler room’. Many people will also have, at some time or other, received an e-mail asking them to help ‘liberate’ money held in an overseas state in the name of a dead person, for a large percentage of the money. (This is not only going to lose you money, but could also land you up in prison for attempted money laundering.)

But there are many other threats to personal finances that do not require you to be taken in by a trick; instead they relay on the accidental side effects of what might appear to be normal behaviour.

Identity theft
One of the greatest threats we all face today is identity fraud, which can come in a number of forms. The most common probably results from the theft of old credit card, utility and other statements that can be used to establish identity so that criminals can establish bank and credit card accounts in your name. This enables them to run up large debts, ostensibly as you, which can at the very least damage your credit rating; at the worst you may have difficulty in proving that the debts are not, in reality, yours. Destroying old documents that identify you is essential.

This form of crime can also come from cloning or other misuse of credit cards. Fortunately, the new Chip and Pin cards reduce the risk of misuse in the UK. But some on-line purchases – and almost any use in the United States where the old ‘swipe’ system is still used – are still vulnerable. Protecting your card by hiding the Pin when you input it and never letting the card out of your sight in a shop, pub or restaurant can help protect you.

Phishing
We have written about phishing (where by a letter ostensibly from your own bank or someone respected like Google or e-bay asking you to ‘re-register’ your details as they have had a computer failure) before. By entering your details to their fake website, you have given the criminals total access to your account on the real one; allowing them to empty your account or incur liabilities for purchases they make.

In addition to never under any circumstances responding to such requests (because banks just don’t issue requests of this sort) it is not a bad idea to check your credit rating regularly to ensure that nothing is being counted against your financial record that you are unaware of. The golden rule is always to look at the real address you are being sent to (which should include https:), not the one that appears in an e-mail and always look for the closed padlock symbol.

Computer fraud
A more recent area that needs looking at is that if you use a wireless connection to the broadband, you must use password protection. If you do not, anyone can link in to your home network and not only ‘steal’ the internet access you are paying for, but also to look at your files, banking details and other information, in order to defraud you.

Perpetual vigilance is, unfortunately, the watchword. For help, contact Robert Bruce Associates.

NOTHING CONTAINED IN THE ARTICLE SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE. PLEASE NOTE THAT THERE MAY BE VARIATIONS FOR THOSE LIVING IN SCOTLAND AND NORTHERN IRELAND.