Did you know that the higher your net worth, the more likely you are to become a target of fraud, scams, and cyberattacks? Fraudsters tend to pay closer attention to high-net-worth individuals since the payoff can be much larger than other targets.
In this day and age, the tactics criminals use to gain control of someone’s assets evolve frequently. The best way to protect yourself from becoming a victim of fraudulent activity is to learn about what to look for and what preventative security measures are available to you and your family.
Below are some of the most common ways in which high-net-worth clients become victims of fraud.
1. Wire fraud
High-net-worth clients are more likely to wire large amounts of money on a regular basis, which makes it difficult to detect a fraudulent transfer amidst their normal banking activity. Some wire frauds are due to unauthorized wire transfers, while others are a result of authorized bank users unwittingly following fraudulent instructions.
For instance, a PURE Insurance member was targeted via email while in the process of purchasing a new property. The member received an email from whom they believed to be their attorney with instructions on wiring funds. Unfortunately, the member followed the fraudulent instructions and sent about $1 million to a bank account in Hong Kong rather than their attorney. Disclosure 1 It’s not only account owners who need to be extremely cautious with wire transfer requests – personal assistants and any other authorized users who can initiate payments must follow security measures to ensure the requests are legitimate.
Malware can infect a computer system in order to steal personal information, plant criminal evidence, or for means of extortion. Ransomware is a common malware that takes over a computer system and only returns data to the user if a ransom is paid. Experts predict that global ransomware will reach $20 million in damages in 2021. Disclosure 2
Other dangerous and damaging malware includes doxing (searching for and publicly broadcasting private or identifying information about an individual) to extort users and planting illegal items in order to get a user arrested. Disclosure 3
3. Identity theft
Given that high-net-worth clients tend to have more accounts, it can be difficult to detect when a new account or card is fraudulent. Cybercriminals can obtain the personal information needed to steal one’s identity through malware as described above, or through spear phishing.
Spear phishing is a targeted attempt at obtaining sensitive information from an individual in order to gain access to their financial accounts. Cybercriminals will disguise themselves as a trustworthy person or organization, usually via email, in order to inquire about personal details or account credentials. This information can then be used to steal your identity, open credit cards under your name, or log into your financial accounts. Some spear phishing emails include links that require you to fill out forms while other links will install malware onto your device once clicked.
Tips to protect yourself and your assets
- Ensure emails received are from legitimate addresses with correct contact information
- Don’t click on suspicious links in emails
- Create strong, unique passwords for your accounts
- Strengthen your home networks
- Use multifactor authentication
- Be diligent in monitoring your accounts
- Don’t assume your financial advisor is handling fraud detection for you
- Consider fraud coverage designed for high net worth families offered by McGriff partners: AIG, CHUBB, Cincinnati, PURE, Nationwide private Client and others.
McGriff offers additional methods to help protect your confidential data on our website.
In order to prevent huge losses due to fraudulent activity, high-net-worth clients need to prioritize cybersecurity and fraud coverage. Our experienced brokers at McGriff can help you successfully navigate this market. To find appropriate fraud coverage, it’s important to talk with one of our Family Risk Managers. If you aren’t currently working with one of our experts, please click below to read more about our Private Client services and to find a specialist near you.
Insurance Business America, “Hundreds of thousands on the line as high net worth clients become fraud targets,” accessed Dec. 30, 2020, https://www.insurancebusinessmag.com/us/news/cyber/hundreds-of-thousands-on-the-line-as-high-net-worth-clients-become-fraud-targets-118966.aspx(opens in a new tab)
Cybercrime Magazine, “Top 5 Cybersecurity Facts, Figures, Predictions, And Statistics For 2020 To 2021,” accessed Dec. 30, 2020, https://cybersecurityventures.com/top-5-cybersecurity-facts-figures-predictions-and-statistics-for-2019-to-2021/(opens in a new tab)
Worth, “The 7 Biggest Threats Facing High Net Worth Families Today,” accessed Dec. 30, 2020, https://www.worth.com/the-7-biggest-threats-facing-high-net-worth-families-today/(opens in a new tab)
Insurance products and services offered through McGriff Insurance Services, Inc., a subsidiary of Truist Insurance Holdings, Inc., are not a deposit, not FDIC insured, not guaranteed by a bank, not insured by any federal government agency and may go down in value.
McGriff Insurance Services, Inc. CA License #0C64544