Even if you’ve never been a victim of identity theft, it’s hard not to be aware of the risk. With each day comes news of another data breach at a trusted, large retailer, a clear indication that no organization is invulnerable. The same can be said for high-net-worth individuals.
Legend has it that when prolific bank robber Willie Sutton was asked why he robbed banks, he responded “because that’s where the money is.” So that is why wealthy people are optimal targets for identity theft—they have money. In addition, the wealthy also purchase more goods online, frequently have multiple credit cards and bank accounts, and often rely on employees or other intermediaries to buy things for them—all of which increases their susceptibility to the crime.
Most people may not be aware that the wealthy are targeted for identity theft because wealthy victims typically elect not to report such incidents, disdaining the media attention the disclosure would invite.
Greg Wheeler, president and owner of Duble & O’Hearn, an insurance broker based in New Haven, Conn., serving an affluent clientele, said he has worked with clients who’ve become victims of fraud, and says they are understandably press shy. “They don’t want the media poking around,” he said.
The HNW in the Crosshairs
Nearly 300,000 identity theft complaints were filed with the U.S. Federal Trade Commission last year, of which one in three was for bogus tax refunds. These figures have remained pretty constant through the years, although studies suggest that the actual number is higher.
The ways in which thieves try to steal the identity of individuals are truly ingenious. Greg noted one wealthy client who received a written letter from his bank thanking him for requesting online access to his account. He had never applied for this, however. Sure enough, the bank was able to trace the request to someone working in the person’s office with access to his e-mail and other personal information.
Another affluent client was on vacation in Europe and went to retrieve some cash from an ATM. She couldn’t get the money, the bank informed her, because she had made eight withdrawals earlier that evening for more than $3,000, which was the daily limit. When she reported the incident as fraudulent, the bank shut down her account and canceled her credit cards, making the vacation her worst ever.
Then there was the client whose bookkeeper received a polite e-mail stating, “Dear Laura. Please wire $48,000 to this account today. Love, Marjorie.” Laura looked at the e-mail and presumed it was legitimate, as Marjorie often requested such transfers, but the sum seemed high. She called Marjorie, who said she had not sent the e-mail. “Through the devious tactic of phishing, someone had been able to take over Marjorie’s e-mail account and knew her routines and means of correspondence with the bookkeeper,” Greg noted.
At Chubb, we see our share of wealthy clients who have become victims of identity theft. That is why we work with IDentity Theft 911, a firm specializing in identity and data risk management, resolution and education services. Adam Levin, the firm’s chairman and founder, said the risk is greater than most people know. “In addition to death and taxes, the third certainty in life is that you will be the victim of identity theft,” he said. “And if you are wealthy, the odds are not in your favor.”