New Account Fraud: A Growing Threat to High Net Worth Investors & How to Protect Yourself

 In this episode of The Retirement Guide, George Jameson, CFP® and founder of Capital Wealth Group, discusses the growing threat of new account fraud targeting high-net-worth investors. Learn about the tactics used by scammers and discover essential tips to protect your wealth. 

 Welcome to "The Retirement Guide" Podcast! I'm your host George Jameson, owner of Capital Wealth Group, a Fee Only Advisory firm. Whether you’re nearing retirement or already retired, Join me each week as we explore the world of retirement planning and equip you with the knowledge and tools you need for a successful retirement.

Thank you for tuning in to this episode of The Retirement Guide. If you enjoyed this episode, please subscribe & leave a review. If you'd like a free 30-minute retirement review, visit our website at www.capitalwealthplan.com to schedule.

This is for education only.It is not tax, legal, or investment advice. Before  acting on any information consult your tax, legal, or investment advisor.

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Transcript

Welcome back to another episode of The Retirement Guide. I’m George Jameson, a Certified Financial Planner and founder of Capital Wealth Group located in Columbia Sc. 

In my last episode, I covered important information on protecting your identity and finances online. We often underestimate the risks associated with our online activities—whether it's emails, text messages, social media, or general web browsing.

After further research, I've decided to dedicate this episode to a more specific discussion on this new scam targeting High net worth investors and nonprofit organization accounts and the top 10 ways to protect yourself. 

A concerning trend I've been hearing about is that fraudsters are increasingly targeting high-net-worth individuals and nonprofit organizations accounts. 

New Account Fraud Targeting Brokerage Firms
This type of fraud involves criminals using stolen personal information to open new brokerage accounts in someone’s name and then draining funds from the victim’s legitimate accounts. Here’s how it usually plays out: scammers first steal personal information—often through identity theft or data breaches. Then they use that information to open new accounts and make changes to existing ones, like updating the email address or adding their own bank accounts. Finally, they transfer funds from your legitimate brokerage accounts into their new, fraudulent bank accounts. This kind of fraud combines identity theft, account takeovers, and new account fraud, making it especially effective at targeting investors’ assets.

Why It’s So Dangerous
Several factors make this scheme particularly risky. Fraudsters often use automated tools to quickly open multiple fake accounts. They create synthetic identities by mixing real and fake information, which makes detecting the fraud even harder. And because digital onboarding is vulnerable, the fraud can happen before anyone notices. Plus, once they gain access, they can move funds almost immediately, making it tough to stop.

Top 10 Protective Measures You Can Take To Protect Yourself from this Scam and Others
 

1.      Monitor Your Accounts: Review your statements and account activity on a regular basis for any unauthorized transactions.

2.     Use Strong Authentication: Please Enable two-factor authentication. I know it’s a hassle, but it’s a must on all of your financial accounts including Brokerage accounts, bank accounts, IRA’s, 401k’s and credit card accounts.

3.     Guard Your Personal Info: Do not share sensitive data online unless you know it’s a legitimate site. especially with unsolicited requests.

4.    Freeze Your Credit from all 3 Agencies: A security freeze can prevent new accounts from being opened in your name. It’s simple and Free. I have all 3 of mine frozen. 

5.     Place a Security Freeze on a System called ChexSystems: ChexSystems is a specialty consumer reporting agency that collects and reports information about your banking history and activity. This can potentially help prevent criminals from opening bank accounts and brokerage accounts in your name and then stealing your money. It's not 100% full proof but it’s free and definitely worth it! You are also entitled to one free report annually which can help you spot any fraudulent activity. You can request a freeze online at www.chexsystems.com, by phone at 800-887-7652, or by mail.

6.    Verify Suspicious Communications: If you receive any strange requests or alerts, contact your brokerage firm directly using trusted methods.

7.     Secure your passwords. Using password manager software makes it easier to manage your login information across websites—and helps you create strong and unique passwords. Additionally, adding a verbal password to your Schwab accounts is another layer of protection. This is an effective security measure to prevent a successful and/or prevented fraud attempt.

8.    Use biometrics where available. If your smartphone or PC offers biometric security options like a fingerprint reader or voice or facial recognition, we recommend using those features. They add another unique layer of security that could stop financial criminals in their tracks. We highly recommend that you enroll in Brokers Voice Identification.

9.    Do not click on links in emails and texts. Online financial criminals try to make their emails or texts look legit. Be skeptical of all emails, texts, and any links and attachments unless you are 100% certain that the email or text is legitimate.

10.  - Stay current on the latest scams. Keep up-to-date on the latest scam tactics so that you can protect yourself from falling victim. Visit these sites for information: 

www.fbi.gov/scams-and-safety

www.consumer.ftc.gov/features/scam-alerts

Bonus 2 - Set up account alerts. Monitor your financial accounts by setting up alerts to warn you when any important changes are applied to your account.

 That wraps up todays episode on the most common scams and the top 10 ways to protect your identity and your hard earned money! IF you found this helpful, please share and rate my podcast! 

Have a great day and be safe out there! 

Disclaimer
The information discussed in this podcast is for general explanations and education only. It is not tax, legal, or investment advice. Before considering acting on any information heard here, first consult with your tax, legal, or investment advisor. Thank you and have a great day. 

 Learn more about Capital Wealth Groupand George Jameson, CFP®, MBA, a Financial Advisor based in Columbia, SC, CLICK HERE!

George can be reached at (803) 250-6464 orgeorge@capitalwealthplan.com

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