Financial Crimes: Keeping Your Money Safe in a Troubled Economy

With the job market still recovering from the 2008 recession and many financial institutions in trouble, keeping your money safe has never been more important. Criminals in the financial sector have found cunning new ways to take advantage of new technology and investor naivety, enabling them to lead businesses and individuals to complete financial ruin. In addition to making wise investment decisions, you and your money will benefit from a refresher course in financial crime.

Computer Fraud

One of the most prevalent financial crimes in the digital age, computer fraud occurs when hackers find their way into your computer and make off with bank account info, credit card numbers and other valuable pieces of information. Armed with your most sensitive financial information, cybercriminals can make large purchases in your name and put a sizable dent in your bank account. Computer fraud has become so widespread that it is often a required area of study for students pursuing degrees in financial crime.

To keep yourself safe from computer fraud, make sure your firewalls are up-to-date and always turned on. Since hackers often use viruses to invade computers, investing in top-notch virus-protection software can help prevent them from gaining access to your PC. Additionally, avoid opening suspicious emails from unknown senders, as this is a popular method of virus propagation.

Credit Card Fraud

These days, few people take the time to consider just how much they use their credit cards. From trips to the neighborhood drugstore to online shopping sprees, most credit cards are used multiple times daily. In light of the extensive array of establishments with your card numbers on file, it’s understandable that credit card fraud is on the rise.

If you suspect one of your credit cards has been compromised, go to the card company’s website and pull up a list of your recent purchases. If you come across any purchases you didn’t make, place a call to the company’s fraud department immediately. Most credit card companies won’t charge you for fraudulent purchases, so don’t panic if you discover someone else has been using your card.

Insurance Fraud

Often wrongfully described as a “victimless crime,” insurance fraud affects individuals with homeowners, auto and health insurance. When people make fraudulent claims and collect undeserved money from insurance providers, other policy holders ultimately pay the bill. According to the FBI, insurance fraud costs service providers over $40 billion annually. This cost, in turn, is passed onto other policy holders by way of increased premiums. So if you know someone who’s been defrauding his insurance company, don’t hesitate to give his provider a call.


It pays to do your homework before entrusting a stockbroker or financial advisor with your money. By misappropriating funds from your accounts and using your money for their own purposes, disreputable brokers and advisors are engaging in embezzlement. In some cases, guilty parties embezzle clients’ money with the intent of paying it back. Other times, embezzlers intend to leave their victims high and dry.

As Small Biz Daily explains, investor apathy and embezzlement go hand-in-hand, so make a point of keeping track of your investments. Check in with your financial advisor and stockbroker several times a week and request detailed reports on what’s happening with your money. This persistence help protect you from embezzlement, and it will also give you a better understanding of where your money is going.

Securities Fraud

Another crime associated with crooked stockbrokers, securities fraud is something novice investors need to watch out for. Securities fraud occurs when a broker sells his clients shares of companies that don’t exist, or “dummy corporations.” So if you’re a first-time investor, take everything your broker tells you with a grain of salt. Before agreeing to invest in a company, insist on conducting your own research. Brokers can be very convincing when pushing stocks, but if you can resist the urge to blindly follow their investment advice, you’ll dramatically reduce your chances of falling victim to securities fraud.

You work hard for your money, so you owe it to yourself to keep it safe. By understanding the nature and ramifications of widespread financial crimes, you’ll be able to spend and invest with confidence.

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