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Fraud attempts against individual financial accounts on the rise, research firm says

On Behalf of | Apr 15, 2022 | Financial News

A new report warns of an increasing number of attempts to gain access to personal financial accounts through fraud, Financial Advisor reports.

LIMRA, a global research, consulting and professional development organization, examined fraud attempts perpetrated by people trying to impersonate financial advisors in order to gain access to their books. These cases were reported to have risen from 1.7% of all incidents in 2020 to 3.3% in 2021. LIMRA called these attempts troubling because if successful, fraudsters could access dozens or hundreds of customer accounts.

LIMRA members were reported to have experienced a 20% increase in the number of monthly fraud attempts in 2021, and the amount of money targeted grew by 30%.

The organization added that the strategies used by fraudsters are continuing to evolve due to the growth of online and mobile transactions involving money.

But while fraud attempts are on the rise, FINRA said financial services companies are also becoming increasingly vigilant in their efforts to combat these incidents. As a result, the number of successful attempts to fraudulently access accounts through a customer portal was down 16% last year. “This is a great indication that recent actions by members to shore up their online defenses are working,” said Russ Anderson, head of Financial Crimes Services for LIMRA.

Anderson added that one key for companies to prevent fraud is educating advisors and company employees on detecting incidents of potential fraud.

The research firm’s data found there is a higher likelihood for fraudulent attacks to occur on Mondays and Tuesdays, while the actual number of attacks are consistent throughout the year.

The attorneys at Lewitas Hyman have decades of experience dealing with securities fraud cases and have a deep understanding of how capital markets and financial service firms are intended to work to protect investors. Lewitas Hyman routinely represents investors harmed when financial professionals and their firms engaged in misconduct that caused their clients investment losses. If you think your financial professional or firm engaged in misconduct that caused you investment losses, contact us at  (888) 655 6002 or through our online contact form for a no-cost evaluation of your matter.