Identity theft is a growing threat. The Federal Trade Commission (FTC) received 650,572 reports of identity theft in 2019, a 46% increase from the previous year. The most common type of identity theft reported to the FTC was credit card new account fraud, up 88% from 2018.
As a financial professional, part of your role is to help your clients navigate many aspects of their financial lives. So, understanding how these statistics can impact your clients, especially your older clients, is important.
Ryan Schwoebel, special investigative unit and anti-money laundering manager at Protective, shares insights on the best ways you can help educate and protect your clients when it comes to identity theft.
Where can my clients learn more about identity theft?
Education can play a key role in helping to reduce the risk of identity theft. One way to help your clients is to gather good information for them and provide it in a checklist or identity-theft packet.
"Help your client base be aware of what the risks are," Schwoebel says. He suggests visiting sites such as Identitytheft.gov and AARP Fraud Watch, where your clients can get more information on common frauds and receive alerts for potential targets in their area.
What are the basic ways you can help your clients better protect their identity?
While it's difficult to completely erase the potential of identity theft from your clients' lives, you can encourage them to better monitor their finances.
Schwoebel cites tools like LifeLock for reasonably good levels of protection, if your clients have the budget. If not, he recommends turning to the three credit report bureaus: TransUnion, Equifax, and Experian. The law requires each of these bureaus to provide a free credit report each year. Your clients can go to AnnualCreditReport.com and request reports.
Schwoebel suggests staggering these requests. "What I recommend is pull one at the beginning of the year. Wait, four months, and pull another, and then wait, an additional four months towards the end of the year, and pull another," he says. "That way, periodically throughout the year, you're pulling a free credit report from one of the three bureaus, and you're able to see if anything looks amiss."
While monitoring credit reports are a great place to start, remind your clients that they should also check their bank and credit card statements on a regular basis. That way, if there is any fraud or suspicious activity, they can quickly report it, stop the fraud progress and help protect their credit score.
How can I help protect my older clients from financial elder abuse?
Unfortunately, as scammers become more sophisticated, one segment of the population that's increasingly targeted is the elderly. You may have elderly clients or clients with elderly parents that worry about scams.
Schwoebel recommends financial professionals keep a close eye on older clients, especially those who might be in the early stages of cognitive decline. In that case, he advises taking a few extra steps to help safeguard them, including:
- Connect with a trusted third-party. Speak with them about finding someone they trust who can help with decision-making, be it a registered financial representative, family member or power of attorney.
- Verify transactions. Unfortunately, a growing form of elder financial abuse involves scams with fake emails requesting disbursements or other transactions. Schwoebel recommends personally verifying transactions with the client directly, through the contact information you have in your records.
- Set up safeguards. Your clients can add another layer of protection to their financial accounts. They can request email or phone alerts for transactions, put verbal passwords on their accounts, or have the bank, credit card or insurance put a hold on any requests until verified by your clients.
While you can't fully protect your clients from the potential dangers of identity theft, you can help them reduce their risk and protect their savings, investments and credit score. Educating your clients about identity theft can help them better safeguard themselves and their loved ones.
Want to learn more about how you can help your clients? Find out what they should know about elder financial abuse.
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