I have a confession to make.
Recently, I was in the checkout line at the store and saw the perfect greeting card for my niece. It had a cute, raised graphic on the front that I knew she would love, and an adorable greeting inside. I didn’t even think twice about it – I bought it and sent it to her and included a check inside for a gift.
A week went by, and I hadn’t heard anything from her. I started to get suspicious, but assumed the post office was just delayed. During the second week, I received a call from my bank. My perfect card never arrived for my niece. Instead, someone had intercepted it in the mail, opened it up and saw that there was “only” a check inside, and then threw everything back in the mail. The post office had forwarded the check to my bank, which prompted the call from them and a lecture on the risks of fraud.
I was so embarrassed. I should have known better than to send a check through the mail. But, as I started to relay this conversation to my colleagues, I found out that many others have had this experience, too.
We certainly learned from our mistakes. So here are some important things to consider and be wary of and some suggestions for safer, money-gifting options. Hopefully, this will help keep you and your gifts secure, not just during the holiday season, but throughout the year.
First and foremost, think twice before purchasing large greeting cards with the intention of sending them in the mail. A bad actor may see the thick envelope with a handwritten address, assume that it is stuffed with cash or gift cards, and take the greeting card for themselves. If there is a check inside, the thief now has your account number, and if they are very sophisticated, they can wash the check and change the amount and the recipient.
A better idea is to give the greeting card in person. If that is not feasible, it is worth paying extra to send the card via either certified mail or a similar delivery service so you can have an extra layer of security and the ability to track the package.
Another option is to send virtual gift cards. This can be done directly through the retailer, such as Amazon, or through a third party, such as Visa. The recipient is notified of the gift through their email, so make sure their contact information is up to date.
Be wary of fraudulent scams when purchasing gift cards. When you are buying gift cards in a store, check the scratch-off film strip to make certain that it hasn’t been tampered with. A bad actor can access the code in advance, and then wait for someone to fund the card.
If you receive an unsolicited email or text offering you a free gift card if you “click on the following link,” it may be a scam trying to lure you into downloading malicious software. Similarly, a scammer may send an unsolicited email or text saying you have won money from a digital wallet, such as Venmo or PayPal. This is frequently accompanied by a link asking you to sign into your account.
When gifting money electronically, always be sure of the recipient’s identity. When sending someone money using a digital wallet, such as Venmo or PayPal, confirm the username with them directly. A scammer may set up a fake profile using a username and profile picture to impersonate someone you may know. If an account you are familiar with suddenly begins requesting money, contact the person directly before sending anything, as their account may have been hacked.
Additionally, be wary if someone you don’t know sends you money. The money may have come from a a stolen credit card. The scam is where they then ask you to send the money back to them via a digital wallet. When the digital wallet provider discovers the credit card was stolen, they will take the money back from your account, while the scammer keeps the money that was “returned” to them.
If you suspect that you have fallen victim to a scam, contact your financial institutions right away. They may recommend closing an impacted account or placing a freeze on the account.
Even if you have not experienced fraud, freezing your credit is always a prudent action. This blocks all potential creditors from accessing your credit file and opening accounts in your name. It generally takes about 30-60 minutes to contact all three credit agencies, but doing so is free and does not impact your credit score. After receiving your freeze request, each credit bureau will provide you with a unique personal identification number (PIN) or password. Remember to keep the PIN or password in a safe place, as you will need it if and when you need to lift the freeze later to apply for new loans/credit lines.
It’s also a good idea to utilize multiple layers of authentication, wherever possible. “Two-factor” authentication requires you to enter your regular account password, followed by a temporary code to your phone, email, or authentication app.
Visit our cybersecurity page on our website for tips on freezing your credit and other helpful information on how to protect yourself from cybercrime. To learn more about what Modera Wealth Management is doing to protect your financial and personal affairs, please read our brochure Protecting Investors from Cybercrime.
As always, please reach out to us with any questions.
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