Keys for managing your finances in cyberspace and not dying while trying

Taking advantage of the boom in new technologies and social media, financial scams have become widespread in recent years. It is a criminal trend that you really need to know how to deal with.

The best way to avoid falling into the traps of criminals and endangering your finances is to know what the most common scams are and how to avoid them. Being properly informed about personal finance matters and knowing how to navigate the digital ecosystem can save you from major upsets. We will let you know what the most common scams are.

Financial “bucket shops“, those fly-by-night operations that you may have heard of, are entities that provide investment services, but which are not authorized by the Spanish National Securities Market Commission [Comisión Nacional del Mercado de Valores] or the Bank of Spain. Their services are a front for appropriating the capital of their victims by making them believe that they can earn a lot of money by making a highly profitable investment. To combat these scammers, here is an initial recommendation: when you are offered innovative investments with high returns and no risk, start to be suspicious.

But the dangers not only come from that environment. In recent times, several terms such as phishing, smishing and vishing have appeared in our lives, becoming ever more common. In these cases, the objective of the fraudsters is to obtain your personal and banking data and to impersonate your identity, using your accounts and disposing of your funds. With phishing, for example, you will receive an email that appears to be from your financial institution or a solvent service company asking you to click on a link and enter your data.  Smishing is the same, but it uses SMS, and vishing is telephone fraud where you receive a call from a person pretending to be an employee of a bank. In all these cases, the most important thing is not to be too trusting and take some basic precautions such as, for example, not replying to emails, messages or calls that ask you for confidential information, deleting the messages, not downloading active attachments and not running them, and checking the real URL of the bank or company that is apparently contacting you. Always be wary of anyone who asks you for your online banking passwords and credit card details. Your bank would never do that.

As frauds become better known, criminals become more sophisticated. Pharming, for example, is like phishing but a bit more complicated.  In this cybercrime, criminals infect the computer or electronic device with malware to redirect traffic from legitimate websites to fake pages created to collect confidential data. In this case, the best protection is to use an updated antivirus and antimalware software, keep your operating systems up to date, have a good password manager and always make sure that the connection is secure, in other words, that it has a security icon in the address bar, for example, a closed padlock, or that it starts with https.

In the financial world, cryptoassets  -digital representations of value or rights to assets that do not exist in a physical form- have been booming lately. Obviously, these products have also been the target of scams.  Many cryptoassets are fake, aggressively advertised to the public in all kinds of online media and offer incredible profits. In most cases the information is unclear and full of technicalities to confuse the investor.

To defend oneself against these new types of crime, the best approach is to be prudent and well-informed. That is why this year’s Financial Literacy Day has chosen the slogan Education for Safer Finances. The aim is to raise the public’s awareness that financial knowledge can help us avoid being caught up in fraudulent networks and putting our finances at risk.

If you would like more information and to better prepare yourself against financial fraud, we invite you to follow the tips that this week, to mark Financial Literacy Day, @soysocialmario will be sharing with us on TikTok and Instagram.