How Scammers Are Stealing Billions—And How to Stop Them
There has been an alarming rise of sophisticated online scams, as highlighted in a recent article from The Economist, which we’ve attached here. Here are some of the key takeaways:
Scale: Online scams may now rival illegal drugs in terms of global proceeds, generating an estimated $500 billion annually.
Sophistication: Modern scams, such as “pig-butchering,” involve long-term trust-building on social media and dating apps. Scammers pose as friends, business partners, or romantic interests, ultimately luring victims into fake investment schemes—fooling even seasoned professionals.
Victims: An estimated 1 in 100 Americans falls victim to scams each year, with U.S. investment scam losses reaching $12.5 billion in 2023. The total amount stolen from Americans annually is estimated to be $50 billion.
Global Impact: Scam operations have expanded worldwide, with up to 1.5 million people involved in the industry. In some countries, particularly in Southeast Asia, the scam industry may account for nearly half of the formal GDP, influencing entire governments.
How to Protect Yourself
Keep Your Credentials Secure
- Never share your User ID or password with anyone, and avoid writing it down.
- If you share your password with a third party, you assume responsibility for their actions.
- Be cautious about using account aggregation services, as these require sharing your login credentials with a third party.
- Enable multi-factor authentication (MFA or 2FA) on your accounts to add an extra layer of security.
- Set up a verbal password with Schwab and other custodians to prevent scammers from impersonating you, even if they obtain your sensitive information.
Recognizing and Avoiding Email & Text Message Fraud
Email scams are increasingly sophisticated, often appearing to come from trusted sources. Watch out for these warning signs:
- Emails or text messages claiming to be from a legitimate company requesting you to change your password via a provided link, often with threats of account suspension.
- Messages from supposed authorities asking for sensitive information such as passwords, Social Security numbers, or banking details, often creating a false sense of urgency.
- Emails or texts urging you to verify your account by clicking on a link and filling out a form.
- A suspicious link: Right-click on the link, select “Properties,” and check if the URL contains an ‘@’ symbol or an unexpected address—it’s likely fraudulent.
To protect yourself from email and text message fraud:
- Never reply to emails or texts requesting personal information.
- Scan attachments with antivirus software before opening them.
- Avoid clicking on links in emails or texts, as they may lead to phishing sites.
- Do not open or respond to spam emails or texts, as this can increase unwanted messages.
- Disable the email preview pane, which can execute certain viruses without you opening the email.
- If you receive a suspicious email or text, search online for the official phone number of the organization and call directly—never use the contact details provided in the suspicious message.
Please review the attached article for more details, and remember to stay vigilant. If you suspect you have been compromised, take the following steps immediately:
- Contact custodians: Notify your brokers, banks, investment advisors, and other affected institutions.
- Alert credit bureaus: Place a fraud alert on your credit with one of the three major bureaus (Equifax, Experian, TransUnion) to prevent new accounts being opened in your name.
- Change all passwords: Start with your financial accounts, including bank accounts and any accounts with us. Then, update passwords for your email and any other potentially compromised accounts.
For additional cybersecurity best practices, you can revisit our April 2022 article:
https://www.wescapgroup.com/2022/04/27/cybersecurity-threats-and-best-practices/ Stay safe,