Protecting Your Money From AI Scams

By: Jack Strulowitz

Almost every family has a story about a phone call that sounded legitimate, a polite voice from the bank’s fraud department explaining that their account has been compromised and in order to protect it, you must submit a few details or private information so a wire transfer can be verified. By the time anyone realizes that the caller is a scammer posing as a bank official, the money has already moved. These calls have become so common that I received one myself while writing this column from an individual claiming to be my bank asking about a mysterious charge on my credit card that did not exist.

Scammers, unfortunately, have been around for years, but artificial intelligence has made them far more convincing, with better scripts and voices that can be copied from a few seconds of recording.

If this has happened to you or someone in your family, there’s nothing to be embarrassed about. These schemes are built around trust. Older people in particular spent most of their lives in a world where the person on the other end of the line was almost always who they said they were, and that is exactly why scammers target them. When a parent falls victim to a scam, the most useful thing a son or daughter can do is to help them put better protections in place, without making them feel foolish.

A great deal of the trouble starts with passwords. Many people use the same password for their email, their bank, their brokerage account, and every shopping site they have ever joined, which is a bit like using one key for the house, the car, and the safe deposit box. When any one of those sites is breached, whoever steals the password can try it everywhere else.

In investing, we diversify so that one bad holding can’t sink the entire portfolio, and passwords deserve the same treatment. Every login should have its own password, and the practical way to manage that is a dedicated password manager app on your phone, which creates, stores, and fills in strong, unique passwords for you. I would also steer you away from letting your web browser save and autofill your passwords. Those built-in tools are encrypted and are certainly better than reusing the same password everywhere, but they are only as secure as the browser and computer they live on, and a shared family computer or a lost laptop can expose everything. A password manager is built for that single job.

The phone is where the most painful losses tend to occur. If you get a call from your bank that you weren’t expecting, whether it concerns a breach, a suspicious charge, or a wire that supposedly needs your approval, hang up and call the number on the back of your card or on your account statement. A legitimate bank will never mind the extra step, and a scammer is counting on you not to take it. The same discipline applies to emails. Never wire money based on emailed instructions alone until you have confirmed it by phone at a number you already possess. And anyone who promises to send back double the cryptocurrency you send them is running a scam.

The newest version of all this is the hardest to accept. It is now possible to get a call from someone who sounds exactly like your spouse or child asking for money or account information, with the voice generated by AI from a short clip taken from social media or a voicemail greeting. The defense is the same as before. Hang up, call the person back on the number you know, and verify before anything moves, no matter how urgent the request sounds, because urgency is the tool these scammers rely on most.

For those of you with aging parents, one of the most useful steps you can take is to make sure you are named as a trusted contact on their investment accounts. Brokerage firms are required to ask clients for a trusted contact, which gives the firm someone to call if it notices signs of fraud, confusion, or unusual activity. Being named does not give you the ability to make transactions or view the account. Many accounts were opened before this became standard practice, and the form often never gets filled out, so it is well worth asking. While you’re at it, sit down with them and make sure the password habits above are in place on their accounts too.

These scams will keep getting more convincing as the technology improves, and it would be a mistake to assume that you or your parents will always be able to tell the difference by ear. What holds up, however polished the fake becomes, is the habit of slowing down and verifying through a channel you already trust, whether that is the number on the back of your card, or the one saved on your phone. A few minutes of inconvenience on a legitimate call is a small price to pay for never having to explain to your family where the money went. 

Jack Strulowitz is a Financial Advisor at Bernath & Rosenberg in Cedarhurst, NY, where he helps high–net worth individuals and families manage their investments and build comprehensive strategies for retirement, tax, and estate planning. For questions or to schedule a consultation, please contact [email protected] or 212-221-1140, ext. 129.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Securities and advisory services offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC.