As a family’s wealth and fame grow, so does a family’s attractiveness as a target for identity theft, fraud, extortion, robbery and a host of other crimes. Why? “Because that’s where the money is,” as the criminal Willie Sutton reportedly said when asked why he robbed banks. And shady characters of all sorts are finding an increasing number of ways to get at that money, thanks in many cases to rapidly changing technology.
Here are five top personal security risks that families with substantial assets should address:
HNW Risk No. 1:
“Inside jobs” by domestic staff, home contractors, and other people brought into the family’s circle of trust
Given their often busy lifestyle, high-net-worth families typically employ a nanny or caretaker and hire contractors to handle major home improvements or maintenance projects. These people are in a unique position to do harm. In 2005, police arrested a painting contractor who had been working on the home of a rich celebrity. The contractor had told an acquaintance that he planned to kidnap and hold for ransom the celebrity’s young son. Luckily, the acquaintance called the police, and the plot was thwarted.
But wealthy families would fare better if they didn’t depend on luck and rather depended on professional background screens. In the case of the painting contractor, it was discovered that he was a convicted felon.
“More than 90% of Americans never run a background check on the individuals they hire, including people who will spend significant time in their homes, much of it unsupervised,” says Mike Guidry, founder, chairman and CEO of The Guidry Group, an international security consulting firm that handles security problems for many of the world’s largest organizations. “Few even check references.They’re trusting to a fault.”
Nor should background screening be considered only at the time of the hiring decision. Families should consider screens every two years or more if security ‘indicators’ present themselves. Guidry cites the case of a nanny who was employed by a wealthy family to care for their three small children. “The nanny had been with the family for seven years,” Guidry says. “During that time, she had undergone an abortion and broken up with her longtime boyfriend, and had turned to drugs and alcohol for consolation. She requested at short notice a week's vacation. It was later determined that her ‘vacation’ was time spent in jail for driving under the influence of alcohol. She also had been driving the children for quite some time with a suspended driver’s license. Periodic background checks would have unearthed this behavior.”
HNW Risk No. 2:
Careless online behavior, especially by children
The rapid evolution of social media and online databases has significantly altered the safety and security landscape for families. Careless online behavior allows criminals to easily glean addresses, birthdays, family relationships, images and other personally identifiable information for ill purposes. For instance, in 2010, New Hampshire police arrested a burglary ring that had stolen at least $100,000 of cash and other valuables by targeting the homes of people who had shared their location via social media networks.
Criminals can also use personal information to clone someone’s profile and gain acceptance into his circle of friends. Then they use that position to launch various confidence schemes. Other criminals have hacked into personal email accounts and then used the information to direct financial advisors to wire money to fictitious accounts.
Children represent a particular concern given their willingness to share personal details and build large followings as a sign of social status. Recently, a billionaire computer mogul with a $2.7 million personal security detail had to shut down his daughter’s Twitter account because she was sharing potentially dangerous details about the family’s vacation plans.
To guard against these cyber risks, wealthy families should set clear guidelines about what and when information can be shared online for the entire family. They should also engage a monitoring service that can alert them when privacy policies change and sensitive information becomes exposed online. These services can often help remove such information or spread misinformation to confuse potential criminals.
HNW Risk No. 3:
Routinely providing private information to public organizations
Families must be wary of sharing information not just online but with institutions, too. Even the most well meaning and reputable organizations may have leaky information security practices. For instance, Identity Finder found that nearly a fifth of nonprofits between 2001 and 2006 had needlessly published in their tax returns the Social Security numbers of contributors. These returns are open to the public.
To minimize the potential for identity theft when dealing with schools, hospitals and other organizations, always ask if giving a Social Security number is absolutely necessary and if another identifying numbers, such as an employee ID number, will suffice. Additionally, ask how the information will be used, who else might have access to it and how it will be kept secure.
In some cases, even your name should be withheld. For instance, serious art collectors often choose to shield their identity by bidding anonymously at auctions or letting a dealer conduct business on their behalf. By hiding their identity, they keep their wealth discrete and leave thieves guessing as to the artwork’s location.
HNW Risk No. 4:
Robust but impractical home security systems
Modern home security systems can perform amazing tricks. They can detect the slightest air movement, heat change, out-of-place sound, or weight change. They can recognize voices, faces, fingerprints and retinal patterns They can be operated and monitored remotely with a smart phone or remote computer. But none of these capabilities matter if the family neglects to turn the systems on—a not uncommon scenario.
In many cases, a wealthy family aspires to be very security conscious and invests in a state-of-the-art security system, but their day-to-day motivation to operate the system falls short. Perhaps the control panel is too complex or located in an inconvenient part of the home, or perhaps it doesn’t match their lifestyle. They may have kids or pets whose curiosity and unpredictability cause false alarms when they venture into areas rigged with motion detectors.
Families would be better served to work with a security expert that understands how to make the system practical as well as effective. The Guidry Group calls this “practical best practices.” By asking about the family’s habits, lifestyle and concerns, they can recommend small changes, such as putting a control panel next to the bed or in the garage, that ensure the system will be used.
HNW Risk No. 5:
Lack of emergency preparation and drilling
Whether it’s the crash of glass as a burglar breaks a home window, an outraged driver within inches of your car, a suspicious vehicle following your child or the sudden takeover of your computer screen, preparing and drilling for emergency situations can make all the difference in the safety of your family.
In many cases, the right actions may seem counterintuitive. For instance, if you suspect someone is tailing your vehicle with malicious intent, slowing down instead of speeding up can be the better course of action. Slowing down can smoke them out and give you more time to make decisions instead of less. But if you haven’t trained for this situation, you won’t know.
For this reason, we encourage wealthy families to plan for likely emergency situations, and then rehearse the best courses of actions. This could involve establishing a safe room within the home that is protected by extra strong doors and locks and equipped with emergency communication equipment. It could involve setting specific evacuation routes, communication protocols and rendezvous points if family members become separated. These situations should be rehearsed at least once a year to keep memories fresh.
Considering the many threats to the personal security of wealthy families, at ACE we often get asked about achieving the right balance between being cautious and living carefree. Nobody wants to go through life constantly thinking about all the bad things that could happen. As part of our insurance program, we try to educate our clients about the risks and then present a range of easy solutions—such as access to professional background screening and identity theft protection services—and let the family decide.
We usually find a few small lifestyle changes can significantly improve their security profile.