In today’s digital landscape, financial scams are becoming more sophisticated and harder to detect. At American Trust Wealth, we’re dedicated to helping you protect your financial security and stay informed.

11 Types of Financial Scams

1. 1. Phishing Attacks
      Phishing is a deceptive practice where scammers impersonate legitimate institutions to trick individuals into revealing sensitive information.
      How it Works: Scammers send emails, text messages or make phone calls pretending to be from banks, credit card companies or other trusted entities. They often create a sense of urgency, asking victims to “verify” account information or claiming there’s a problem that needs immediate attention.
      Red Flags: Requests for personal information via email or text, unexpected communications asking you to click on links or download attachments and messages with poor grammar or spelling.
      Protection: Never click on suspicious links or provide personal information in response to unsolicited communications. Always verify the sender’s identity independently.

1. 2. Identity Theft
      Identity theft occurs when someone uses your personal information without your permission, typically for financial gain.
      How it Works: Criminals obtain personal data through various means (data breaches, stolen mail, phishing, etc.) and use it to open new accounts, make purchases, or commit other frauds in the victim’s name.
      Red Flags: Unexpected bills or credit card charges, calls from debt collectors for debts you don’t recognize or unfamiliar accounts on your credit report
      Protection: Regularly monitor your credit reports, use strong and unique passwords, be cautious about sharing personal information online and consider identity theft protection services.

1. 3. Investment Scams
      These scams trick individuals into investing money with promises of high returns, often with little or no risk. They are designed to steal money or personal information, with the perpetrators often offering fake or misleading opportunities in areas like stocks, real estate or cryptocurrency.
      How it Works:
      

• Ponzi schemes: Scammers pay returns to earlier investors using the money from new investors, giving the illusion of profitability.

• Pump-and-dump schemes: Fraudsters artificially inflate the price of a stock through false or exaggerated claims, then sell their shares at the inflated price. Once they sell, the stock price drops, leaving other investors with losses.

• Pyramid schemes: These rely on recruiting new members, where returns are based on the recruitment of others rather than legitimate investments.

• Cryptocurrency scams: Fraudsters promote fake cryptocurrencies or digital tokens, promising massive profits, but the investments either don’t exist or are vastly overhyped.

Red Flags: Promises of guaranteed high returns, pressure to invest quickly and investment opportunities that sound too good to be true.
Protection: Always research investment opportunities thoroughly, be wary of unsolicited offers and consult with a trusted financial advisor before making significant investments.

1. 4. Elder Financial Abuse
      This type of fraud specifically targets seniors, taking advantage of their potential vulnerabilities such as isolation, cognitive decline or unfamiliarity with technology
      How it Works: Scammers may use manipulation, coercion or deception to gain access to an elderly person’s finances. This can include family members, caregivers or strangers who build a false relationship of trust.
      Red Flags: Sudden changes in financial habits, unexplained withdrawals or transfers, new “best friends” who seem to have undue influence.
      Protection: Stay involved in elderly relatives’ lives, watch for signs of isolation or cognitive decline and consider setting up safeguards like dual controls on accounts.

1. 5. Business Email Compromise (BEC)
      This sophisticated scam targets businesses, aiming to redirect large sums of money.
      How it Works: Hackers gain access to a company’s email system, often through phishing. They then impersonate executives or vendors to request wire transfers to fraudulent accounts.
      Red Flags: Urgent requests for large transfers, slight changes in email addresses or payment details, pressure to bypass normal procedures.
      Protection: Implement strict verification procedures for financial requests, use multifactor authentication for email accounts and train employees to spot BEC attempts.

1. 6. Ransomware Attacks
      Ransomware is a type of malicious software designed to block access to a computer system until a ransom is paid.
      How it Works: Typically spread through phishing emails or by exploiting vulnerabilities in outdated software. Once activated, it encrypts files or locks the system, demanding payment for the decryption key.
      Red Flags: Sudden inability to access files, ransom messages appearing on screens, unusual system behavior.
      Protection: Regularly update and patch software, maintain robust backups, use reputable antivirus software and educate yourself about safe online practices.

1. 7. Romance Scams
      These scams exploit people’s emotions and desire for connection.
      How it Works: Scammers create fake profiles on dating sites or social media, build a romantic relationship with the victim, then ask for money, often citing emergencies or travel expenses to meet in person.
      Red Flags: Reluctance to meet in person, requests for money or financial information, stories that don’t add up.
      Protection: Be wary of online-only relationships, never send money to someone you haven’t met in person and be skeptical of sob stories or emergencies requiring financial help.

1. 8. Imposter Scams
      In these scams, fraudsters pretend to be someone the victim would trust or feel obligated to help.
      How it Works: Scammers may pose as government officials (e.g., IRS agents), tech support personnel or even family members in distress. They use this false identity to solicit money or sensitive information.
      Red Flags: Unsolicited calls or messages claiming to be from official sources, pressure to act quickly, requests for unusual payment methods like gift cards.
      Protection: Verify the identity of anyone asking for money or information independently. Government agencies typically don’t call to demand immediate payment.

1. 9. Account Takeover
      This occurs when criminals gain unauthorized access to a victim’s financial accounts.
      How it Works: Using stolen login credentials (often obtained through data breaches or phishing), scammers access accounts and make fraudulent transactions or changes.
      Red Flags: Unexpected password change notifications, unfamiliar transactions on your account, sudden loss of access to your accounts.
      Protection: Use strong, unique passwords for each account, enable two-factor authentication wherever possible and monitor accounts regularly for suspicious activity.

1. 10. Synthetic Identity Scams
       This sophisticated form of identity theft combines real and fake information to create new identities.
       How it Works: Criminals use a real Social Security number (often belonging to a child or elderly person) combined with a false name and other fabricated details to create a new identity. They then use this identity to open accounts and build credit before maxing out all available credit lines.
       Red Flags: Credit inquiries or accounts you don’t recognize, particularly if you’re monitoring a child’s or elderly parent’s credit report.
       Protection: Regularly check credit reports for all family members, including children. Consider freezing credit reports, especially for those who don’t actively use credit.

1. 11. Check Washing
       Check washing is a type of fraud where criminals alter legitimate checks to steal money.
       How it Works: Thieves steal a check, often from a mailbox and then use chemicals to erase the original details like the payee name and amount. They rewrite the check with new information and deposit or cash it under a false identity.
       Red Flags: Unfamiliar check transactions, missing checks or bank notifications of altered checks. Keep an eye out for discrepancies in your bank statements.
       Protection: Use secure mailboxes or electronic payments. Monitor your bank account regularly for suspicious activity and consider enrolling in automatic alerts for checks.

Steps to Take if You’re a Victim of a Financial Scam

Even with precautions, financial scams can still occur. If you believe you’ve fallen victim to a scam, take these steps immediately:

• • • Contact your bank and any financial institutions to report the fraud and freeze any affected accounts.
    • File a police report with your local law enforcement agency.
    • Report the scam to the Federal Trade Commission (FTC) and relevant authorities, such as the FBI’s Internet Crime Complaint Center (IC3) for online scams.
    • Place a fraud alert or credit freeze on your credit reports to prevent further identity theft.
    • Monitor your financial accounts closely for any unauthorized activity and keep a record of all communications related to the incident.

How American Trust Wealth Combats Financial Scams

We have a significant infrastructure in place to protect our clients’ assets. One feature we would like to highlight is multi-factor authentication (MFA) as an optional add-on security feature for your online client portal. If you’re unfamiliar with MFA, it is a multi-step process that requires more than just traditional login criteria to access your client portal, often involving a text message security code.

It’s important to highlight that while information security is of the utmost importance, the client portal has “view only” functionality. This means no transactions, trades or transfers can occur online.

In summary, your client portal will not have MFA functionality as a default setting, but this optional feature can be activated upon request.

Please reach out to us with any questions to activate MFA for your online access or to begin using online access if you are not already utilizing this feature.