3 Vulnerabilities Facing High Net Worth Individuals – And You, Too
Celebrities, politicians — and you. It turns out that no one is immune from financial and reputational risk at the hands of scammers. From merely embarrassing to catastrophic, here are three threats that face people from all walks of life, and what to do about them.
After Instagramming photos of an outsized diamond ring and other jewels she’d brought with her to Paris Fashion Week, Kim Kardashian returned to her hotel suite late at night in October 2016, Snapchatting to her fans that she was in for the night. Just before 3 a.m. jewelry thieves entered the room by force, bound and gagged the celebrity, and made off with $5 million in glittering stones.
Even if you don’t travel with a bag of diamonds, when it comes to social media, certain information can put you at risk:
- Flaunting major purchases or travel plans. Showing off your new car, posting photos from your trip to the big game, or sadly, even sharing funeral arrangements for a family member can put your family at risk for theft. Be circumspect, and think about what might result from sharing your comings and goings.
- Disclosing personal details. Even seemingly harmless details, such as pictures of your milestone birthday, can add up over time to give criminals a big picture profile of you and the ability to impersonate you. According to the AARP, the “grandparent scam” led to $328 million in losses in 2017 alone. A fraudster calls a grandparent pretending to be a grandchild, or perhaps his or her lawyer. The caller is in trouble and needs money right away. In many cases, enough information was gleaned from social networking sites to make the story sound plausible.
2. Social engineering
Whether it’s phishing, spoofing, or some other form of trickery, social engineering is at its core the old-fashioned use of deception — particularly impersonation — to trick you into giving out confidential information and funds.
Youth are often particularly vulnerable to manipulation. In one case we saw, a scam artist targeted a high net worth individual who had a developmentally disabled adult daughter. He learned details about her and her family from her online posts, befriended her, and over time, convinced her to send thousands of dollars to what she thought was her former private school.
Also in the workplace, business email compromise (BEC) scams are on the rise. Posing as an employee’s manager, CEO or chief financial officer, criminals coerce an employee to make large, urgent cash transfers. In 2016, the FBI’s cybercrime division received more than 12,000 BEC complaints with losses in excess of $360 million.
To combat these growing risks:
- Always verify sources that ask you for money or confidential information. Use a communication method different from how they contacted you to confirm their identity.
- Discuss the importance of online privacy with your children. Set strict privacy controls, and teach them not to accept friend requests from people they don’t know. Tell them to talk to you if they receive any request for money or information.
3. Malicious exes
It could be a disgruntled former employee or a bitter former flame. Suddenly, terrible things begin to appear online about you, putting you or your company’s reputation at risk. When it comes to malicious exes, the reputational harm and emotional trauma they inflict can surpass loss, although the two are often linked.
Perhaps you’ve even received an offer to make some compromising information go away — unfortunately, modern-day blackmail schemes such as revenge porn and “sextortion” are surprisingly common yet understudied, according to the Brookings Institute.
The key is to nip it in the bud if you can:
- Before firing an employee, assess the threat. Debrief your corporate counsel on any situation that makes you uneasy.
- If trouble arises, act quickly. A deep investigation can sometimes unmask the person behind the online identity, allowing your attorney to consider the next step, such as preparing a cease-and-desist letter. In other cases, the attorney might sue the internet service provider to reveal an identity.
- Contact law enforcement, even if the perpetrator tells you not to, and especially if you feel physically threatened. Sometimes the situation warrants seeking a temporary restraining order for 30 days, and then to petition the court to make it longer if justified.
The common thread: human fallibility
As it turns out, hacking humans can have more devastating effects than hacking computers, and the more information a criminal has about you, the more likely they are to succeed.
The common cure is an ounce of prevention. Think of personal privacy measures not as a hassle, but as a way of life that enables your freedom and protects you from financial, emotional and professional ruin.