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As a financial adviser, your dream is to set your clients up for independence and wealth. Sometimes, scammers can throw this path off course, requiring you to offer practical and emotional support to clients.
Navigating the aftermath of a financial scam is challenging for everyone involved. However, these steps will alleviate short-term stress and build back financial stability and security for the future.
Strategies to Support Clients After Financial Fraud
Taking action after experiencing financial fraud can help clients feel more empowered in their recovery process. Discuss and guide clients through the following steps to begin the fraud investigation and defend against further damage.
1. Document the Event
While it may be stressful for the client to recount the scam, getting as much detailed information as possible is crucial for thorough reporting. Time is of the essence, so advisers can provide emotional support and practical advice to hasten documentation.
2. Contact Financial Organizations
Help your client reach out to their debit and credit card companies to freeze cards and obtain transaction records. Freezing cards can block scammers from doing more damage. Taking this step as soon as possible brings clients more peace of mind during a difficult time.
3. Reach out to Federal Agencies
Federal agencies are the next points of contact. Guide clients through the process of filing reports with entities like the Commodity Futures Trading Commission or the Federal Trade Commission. Your clients are likely undergoing significant stress, so something as simple as providing a phone number or facilitating the conversation can provide much-needed support.
4. Submit an Insurance Claim
If the individual has insurance for identity theft, now is the time to help them submit a claim. If the client does not have insurance, you can help them get it later to block potential scam attempts in the future.
5. Take Action on Other Compromised Spaces
Changing online credentials for the most vulnerable websites can add another layer of security. You can recommend altering passwords for more than banking and investment platforms. E-commerce or retail outlets often tie cards to user accounts for seamless ordering. Reviewing these sites is vital, too.
6. Call Friends and Family
Depending on the type of scam, the scammer may have access to personal details about the client’s friends and family. Warning them to avoid potential scams by relaying the experience can prevent the situation from worsening. If the client is embarrassed, the adviser can calm their fears by moderating or leading those conversations.
Techniques for Long-Term Recovery and Protection
A scam could take seconds but have years-long impacts. Once you quell your client’s immediate worries, you can advise them on how to protect their identity and financial assets in the future using these techniques.
1. Stay Educated
Increasing literacy about scams will help avoid follow-up scams. Hackers and fraudsters are getting more creative in finding ways to tap into people’s financial assets. The advent of cryptocurrency has bred a host of new threat variants. Gift card scams are still present yet often overlooked. Some scammers even claim to help people get loans by providing them with fraudulent credit privacy numbers, an alternative to social security numbers.
2. Implement Security Measures
Advanced security measures provide critical defense against financial scams and other cyberattacks. Two-factor authentication, transaction monitoring and unique, varied passwords are all great tools to protect financial access and data from hackers.
Many financial institutions allow their clients to set up alerts for suspicious activity. Along with these common security measures, regularly monitoring accounts, transactions and credit reports to catch unauthorized activity early is a simple but effective way to enhance financial security.
3. Revise Financial Priorities
The client’s relationship with their finances could be permanently altered because of this experience. If they feel fearful of technology, avoid suggesting they use artificial intelligence-related services and or sign up for more online accounts.
Advisers should prioritize active listening to see if a client’s financial goals have changed, what would make them more comfortable moving forward, and if they have any reservations.
4. Rebuild Credit Scores
Scammers can max out cards or submit personal loan requests, negatively impacting an individual’s credit reports. These hits could take years to rectify without expert insight. Educate clients on how to communicate with credit bureaus and appeal credit report errors.
Forging Financial Safety
Scammers can impact anyone, and financial advisers play a special role in helping people recover. While financial fraud presents a setback, you can assure clients the situation is not a permanent blow to their credit or financial security. With calmness and expertise, you can get them back on track.
Related: How To Handle Client Conversations About End-Of-Life Planning