New Year, New Reasons for Caution: Staying Safe Online

As we turn the page on the calendar to a brand-new year, there are many reasons for hope and optimism. Perhaps foremost on most minds is that vaccines are on the way, offering the promise of finally closing the door on the dangerous virus that has threatened the entire world for the past year. Also, the financial markets have proven remarkably resilient during the various disruptive events of the past twelve months. And the federal government has passed a fresh round of stimulus funding in its quest to maintain liquidity and help American small businesses and individuals ride out the worst economic effects of the pandemic.

But we still live in a world where the unscrupulous prey on the unwary. Especially where opportunities for financial aid exist, we can be certain that dishonest operators prowl, looking for ways to get their hands on money that rightfully belongs to others.

As if we needed fresh proof of this fact, the Federal Trade Commission (FTC) reported last October that the number of victims of online scams skyrocketed during the pandemic, resulting in nearly $117 million in losses in the first six months of 2020. Most of the losses involved online shopping, where people saw an advertisement on social media, put in an order, gave their credit card information, but the item never arrived.  Other scams relate to bogus romantic pitches, while others were making extravagant claims about amazing income opportunities or pyramid schemes where you would have to recruit new participants in order to make the income promised in the advertisement.  Perhaps most troubling, another cluster of victims answered an offer to receive relief money, which is understandably attractive to the thousands of people who have been laid off or furloughed during the COVID-19 pandemic.

Interestingly, some 94% of the victims reported that the scammers had caught their attention using just two social media platforms: Facebook or Instagram. In fact, a new round of “phishing” attacks (attempts to gain users’ login and other information by utilizing fake messaging) has arisen on Facebook; hackers gain access to legitimate accounts and then send instant messages (using the Facebook app Messenger) to friends of the hacked users. The messages contain links to videos, but if you click on the link, instead of viewing a video, you are asked to log in to your Facebook account. However, the log-in request is a fake that provides your login information to the hackers. If you get a Facebook message from a friend suggesting that you click on a link to a video, you should delete the message.

Are there ways to protect yourself?  One tip from the FTC is, before you buy based on a post, check out the company online, along with words like “scam” or “complaint.”  Never send money to a love interest you have not met in person. If you get a social media message from a friend about an offer or need for financial relief, get in touch with your friend (directly, not via social media); it’s possible their account was hacked. And if you spot a potential scam, report it.  The FTC has a website that allows you to tell them about fraudulent messages, claims, or products.

We want you to be safe in every way—online, personally, and financially. If you would like more information about staying safe on the internet, click here to read our article “Staying Safe Online.” And if you would like to learn more about how we work with our clients to offer reliable, research-backed guidance for investing, please contact Bernhardt Wealth Management.

Happy New Year! And, as always,

Buen Camino!