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The Resource Center Identity Theft & Protection The Resource Center | article

Accountants Encourage Consumer Protection Against Fraud

In light of a new survey, accountants are offering advice to consumers for protection against identity theft and other types of fraud.Though the tax return deadline has passed, U.S. accountants are still encouraging the best practices against identity theft and other types of fraud for taxpayers. The tips come in light of a new survey published by the American Institute of CPAs, which found that 50 percent of the 1,005 participating adults believe it is “at least somewhat likely” they will lose money in the next year because of identity theft.

Additional findings from the survey

Despite this heightened awareness of identity theft, many consumers still become victims. According to the survey, 21 percent of respondents have experienced an identity theft incident in the past year.

AICPA also found that victims are extremely proactive when confronted with fraud – 93 percent said they made some sort of effort to reverse or lessen the damages. These actions ranged from putting a freeze on their credits to using cash, checks and other forms of currency like bitcoins.

The survey, conducted over the phone by Harris Poll, coincides with Financial Literacy (or Capability) Month, which is recognized every April. In line with the purpose of the month and the survey’s findings, AICPA has offered some advice on protection to help reduce the number of fraud victims.

“There are basic steps people can take right now, before identity theft causes a financial nightmare,” Gregory Anton, chair of the AICPA’s National CPA Financial Literacy Commission, said in a statement. “Securing your personal information and only providing your Social Security Number when it is absolutely necessary are easy steps to take.”

Protection against investment fraud

Anton also suggested that consumers be more skeptical of investment fraud schemes, which he said “have the potential to cause major financial harm.” His advice is to stay away from anything that “seems too good to be true.” In those cases, your instinct is usually correct. According to the survey, 19 percent of respondents were victims of investment fraud.

According to the Securities and Exchange Commission, investment or “securities” fraud comes in several different forms. These include Ponzi schemes, pump and dump schemes, pyramid schemes and advance fee fraud.

Luckily, the agency has some helpful tips so consumers can make more informed decisions about their investments. For instance:

  • Be skeptical. Before making any sort of investment, ask plenty of questions and conduct thorough research. Since you are putting your money on the line, it’s not wise to enter blindly. According to the Securities and Exchange Commission, fraudsters won’t expect you to ask too many questions. If the person offering the investment seems uncomfortable by your investigating, don’t agree to that business deal.
  • Stay away from high risk investments. Any investment promising a high return comes with high risk. Fraudsters will try to reel you in with a “guarantee” of becoming rich quickly, but this is a huge red flag. The Financial Industry Regulatory Authority calls this the “phantom riches tactic.”
  • Don’t give into pressure. Investment schemes will try to pull you in using a number of different pressure tactics, whether it’s that everyone else is jumping on board or the deal has a short time limit before it disappears forever. Resist these and really consider whether or not this is something you want to invest in. Taking that time could save you from a financial nightmare.

In a world full of schemes and scams, it’s easy to fall victim if you’re not paying close attention to your assets. To further your efforts against fraudsters, you can invest in a service like Identity Guard, which can monitor your credit files and notify you of certain activity that may indicate fraud. This way, you’ll know someone is helping you keep an eye on your personal security.