Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Practice Management > Marketing and Communications > Client Outreach

New Tech Scam Warning Shows How Vulnerable We Are

Your article was successfully shared with the contacts you provided.

Do you know what “hindsight bias” is? It’s the principle that once we know something has occurred, it’s difficult, if not impossible, to understand the thinking of people who didn’t see that event happening.

In practice, hindsight bias is what drives us to look back history and exclaim: “How could they have been so dumb?” 

Here are some examples of seeming human folly that I’ve collected over the years: 

  • Filling passenger-carrying dirigibles (think Goodyear Blimp) with highly flammable hydrogen gas (Google: “Hindenburg Disaster”).
  • Dumping toxic waste into the ground and/or waterways (Google: “Love Canal”).
  • General George Armstrong Custer dividing his 7th Calvary and attacking a village of 10,000 Sioux/Cheyenne with 240 troopers (Google: Little Big Horn).  
  • Designing car interiors with metal dashboards and protruding toggle switches (Google: ouch).
  • Decorating indoor Christmas trees with lit candles on their drying branches (Google: house fires in the 19th Century).
  • Believing that the Sun revolves around the Earth (Google: Nicolaus Copernicus).
  • Twelve publishers turning down the Harry Potter books (Google: J.K. Rowling net worth).
  • Decca Records turning down the Beatles because they “weren’t sellable” (Google: Rock ‘n Roll Hall of Fame, and 2.3 billion albums sold).
  • Russia selling Alaska to the United States for 2 cents an acre (Google: Alaskan Gold Rush, Prudhoe Bay oil field, Kodiak bears and Sarah Palin).
  • And since Super Bowl LI occurs this coming Sunday, how about the six quarterbacks picked ahead of Tom Brady in the 2000 NFL draft (Google: 450 touchdown passes, and 201 games won, including 20 playoff games and 4 Super Bowls, and counting).

I’m sure you can come up with an equally depressing list of your own. Yet the thing I find the most puzzling is that despite these myriad examples of questionable thinking, it never seems to occur to us that in 20, or 50 or 100 years from now, people will be looking back at some of things we do today and scratch their heads, too.

For some years now, I have suspected that one of the things that will elicit the “They did what!” response from people in the future will be our use of technology: specifically, our digital data that’s accessible via the Internet.

Most of us have everything from our medical records and credit cards and banking and investment accounts to our Social Security numbers and various passwords all residing somewhere in the virtual world. And for advisors, with all their client data, this problem is exponentially more troubling.

A quick Google search for the “World’s Biggest Data Breaches” reveals that even the largest—and what one might presume to be most secure databases on the planet—are subject to hacking: AOL, Home Depot, EBay, JP Morgan Chase, Morgan Stanley, Medicaid, the IRS, the U.S. Office of Personnel Management, the Department of Defense,  the Australian Immigration Department, the U.K. Ministry of Defence, the State Department/U.S. Embassy cables, the Department of Veterans Affairs, multiple state court systems and the recently widely reported Clinton campaign emails, to name but a few.

I suspect that most of us (and probably more than a few advisors) try to take some comfort in the notion that we’re really too small of a target for serious hackers. And we cling to this belief despite that fact that all too frequently, we get one of those “phishing” emails, requesting our user names and passwords to avoid having our emails blocked or our checking accounts frozen. All it would take is one distracted moment to send a response that could cause some real hardship.

Unfortunately, the chances of making such a mistake are probably more likely than we think.

Adam Levin, a consumer advocate who specializes in security and identity theft, and author of the best-selling book “Swiped,” recently put out an alert about a low-tech scam that’s all too easy to fall prey to. The way the scam works is that a fraudster calls pretending to be from a home security agency or cruise line, he wrote. “And they will use phrases like ‘Are you the lady of the house?’ or ‘Do you pay the household telephone bills?’ or “Are you the homeowner?’ Once they get that recorded answer [“Yes”], they will go through the sales pitch and explain that the unsuspecting victim has already agreed to pay for the product or service. Scammers will play back a person’s verbal confirmation and threaten to take legal action if they try to deny the charges.”

“Consumers should be on high alert for this scam,” he said, “especially the elderly and [other] vulnerable communities. Once the scammer has your recorded ‘Yes’ on file, they can combine it with credit card data or personally identifiable information they may already have to authorize fraudulent charges. If you receive this type of call, hang up. Check your accounts for any suspicious charges and sign up for transactional monitoring from your bank. Never give out personal or financial information over the phone and never authenticate yourself to an unsolicited caller.”

Of course, these targeted victims are often typical clients for financial advisors. And in my experience, advisors themselves can be fairly trusting, too. The big danger in this scam is that a phone call can catch us off guard, increasing the likelihood that we might answer questions while our minds are still on something else.

With all the possible tech hacks out there, it’s a bit ironic that we might become the source of our own data breach. I know it’s one more thing to worry about, but you don’t want yourself or clients to be the subject of some one’s future hindsight bias, asking: “He/she told them what?”  

— See these additional blog posts by Bob Clark:


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.