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How to Protect Yourself From Financial Fraud as an American Abroad

June 6, 2023
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8 Tips to Keep Your Identity and Assets Secure as a U.S. Expat

U.S. expats living overseas can be more vulnerable to financial scams and fraud due to their reliance on wire transfers. However, there are several steps you can take as an American living abroad to avoid being a victim of an expat financial scam.

#1 – Be careful when wiring funds.

Sending funds via wire transfer is a fast and convenient way to move money internationally. International wire transfers, or remittance transfers, occur when a transaction is made directly between two bank accounts in different countries.

In contrast to an ACH transaction, which clears through a third party called an automated clearing house, a wire transfer bypasses the intermediary financial institution to place funds directly into the receiving account.

ACH transfers typically can’t be made between accounts in different countries, which is why many U.S. expats rely on wire transfers for moving money back to the United States. The problem is once funds leave your account via wire transfer, there’s no way of getting them back. This makes wire transfers particularly appealing to fraudsters, because after a victim wires funds, he or she has virtually no recourse once fraud is discovered.  

In addition, wire transfers typically don’t have strict verification requirements, which makes it easy for fraudsters to create convincing documentation and impersonate legitimate businesses in order to steal money.

The following steps can help you avoid being the victim of wire fraud.

  • Verify the receiver – Before making a wire transfer, call and confirm the wiring instructions using a verified phone number you have used in the past. Never rely on the contact information provided with the transfer request.
  • Use multifactor authentication (MFA)–Standard verification methods include just a username and password, which can be easily hacked. MFA requires additional verification factors that make it more difficult for fraudsters to access your accounts. Whether it’s your bank website or your email, setting up MFA can decrease the likelihood of getting hacked. However, using MFA can be tricky for expats, as some banks won’t accept foreign phone numbers. To avoid this issue, you can add an alternative email address to verify your identity.
  • Be on the lookout for mistakes – Carefully review the wire instructions for any inconsistencies, such as a subtle change in email address or phone number (e.g., using a lowercase “l” instead of “I” or transposing digits), incorrect grammar, spelling errors and incorrect punctuation. These can all be signs of a fraudster. If in doubt, verify with the institution by using a known phone number.
  • Report fraud immediately – If you’re the victim of wire fraud, it’s important to report it as soon as possible to the financial institution and the FBI’s Internet Crime Complaint Center. If reported quickly enough, the financial institution may be able to stop the wire, and the FBI may be able to help identify the fraudster.

#2 – Monitor your accounts.

One of the best ways to quickly identify fraudulent transactions is by consistently monitoring your accounts. Make a point to log into each of your accounts at least a couple of times per week to review recent transactions. It’s also a good idea to set up online banking alerts to notify you of any unauthorized or suspicious activity.

#3 – Never provide personal information over the phone or via email.

Your personal information can be used to access your accounts or steal your identity, so it’s important to always safeguard it. If you must send sensitive information over email, make sure to use secure file sharing or email encryption to securely send documents or attachments so they can’t be intercepted.

#4 – Avoid using public Wi-Fi and promptly shred all documents.

Public Wi-Fi networks aren’t secure. Any information exchanged over these networks can be intercepted. While not using public Wi-Fi altogether is likely impractical, avoid accessing financial websites and sensitive online data. If possible, you should never send personal or financial information over a public Wi-Fi connection. You may want to consider purchasing a global jetpack for reliable (and private) portable Wi-Fi or enabling an international data plan for your phone.

It’s also important to quickly shred unnecessary bank statements, bills and other financial documents before disposing of them, as these documents contain valuable information that can provide fraudsters exactly what they need to access your accounts. Or, consider skipping paper documents altogether by signing up for online statements and billing.

#5 – Be careful where you charge your devices.

A newer tactic used by fraudsters is called “juice jacking,” where scammers load malware onto public USB charging stations in order to access electronic devices while they’re being charged. This malware can transfer personal data and passwords directly to the fraudster, which can then be used or sold to others.

Instead of charging at public USB stations, use AC power outlets, carry an external battery or use a charging-only cable. If you must use a public USB port, be sure to select “charge only” (rather than “share data” or “trust this device”) when prompted by your phone.

#6 – Don’t fall for deals that seem too good to be true.

Remember that if a deal sounds too good to be true, it probably is. Americans living overseas are especially vulnerable to housing scams because they must sometimes make living arrangements quickly, sight unseen. Fraudsters are known to target foreigners with rental scams that promise housing at a price significantly below local market rates. Scammers typically have a reason for the deal, including a death in the family, a move for work, etc. and will be in a rush to complete the transaction and have you wire funds for a down payment.

Slow down and do your research before wiring any funds to secure a rental. Request a visit to the property or an online tour before committing.

#7 – Watch out for online dating scams.

Fraudsters have become adept at using online dating and social networking sites to establish “relationships” with unsuspecting victims. Victims of these romance or dating scams are asked to send money, quickly, for help with an emergency like a medical expense or to pay fees to get the fraudster out of trouble. Be wary of who you’re interacting with online, and never send money — especially via wire — to an unknown person.

#8 – Don’t fall for scare tactics.

Some fraudsters try to scare victims into giving away their money to avoid being arrested (by claiming to be with the IRS or another government entity and demanding an immediate wire transfer). These scammers often have some of your personal information and are able to call you by name and reference other details of your life, but don’t fall for it.

Never provide information to an unknown person, especially if you feel pressured to do so. If you’re in doubt, verify with your bank, local law enforcement or the IRS using the phone numbers provided on their official websites.

Could you use some help securing your financial data and avoiding fraud as a U.S. expat? Creative Planning International is here for you. We specialize in helping U.S. expats and cross-border families maximize their wealth and avoid costly mistakes. We understand the complex interaction of multijurisdiction tax and regulatory regimes and can help you develop operationally and financially efficient wealth management strategies to meet your needs. Because we serve in a fiduciary capacity, you can be confident that we’re acting solely in your best interests at all times.

To learn more, request a meeting with a member of our team.

This commentary is provided for general information purposes only, should not be construed as investment, tax or legal advice, and does not constitute an attorney/client relationship. Past performance of any market results is no assurance of future performance. The information contained herein has been obtained from sources deemed reliable but is not guaranteed.


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