It was no Nigerian prince.
No long-lost relative wanting to share a "gi-gongous inheritance" with me. This email was current, well-written, and included credible personal details from a good friend.
"I'm really sorry to ask this, but I have no choice. On my way back from Columbia today my purse was stolen, and I am now stranded in the Mexico City airport with no means to carry on home!" the email said.
"I checked with American Airlines here, and they said they would allow me to buy a ticket to Dallas using cash, even without ID, on an exception basis. Once I'm in Dallas, my daughter can meet me and we will take it from there. I'll pay you back within a couple of days, but I need $1,000 to get moving again. This is crazy! I'm stuck! Thanks so much for this (in advance)! Here are the wire transfer details..."
This is a paraphrased email I received from an old friend a few short years ago. She had been on a volunteer assignment in Bogota, and was on her way home when the email arrived in my basket.
She had been sending regular weekly emails during her time in Columbia, all of which I read and responded to eagerly. The details of the email were plausible enough, but something in the tone of that day's email was uncharacteristic of her.
It was subtle, but clear enough to me. Also the fact that I am cheap-cheap-cheapo-cheaper-cheapest, edged me toward stalling, doubting.
Sure enough, within a few hours, I received another email from her, this time from a new email address, saying that her other email address had been hacked, and that she was NOT stranded, and that anyone who received the bogus email should NOT send any money.
All of this happened while she was actually in transit home, but the crook never got paid, thank goodness. The point here is, the bad guys are getting more convincing.
"Vigilance! Constant vigilance!"
So goes the battle cry of J.K. Rowling's Prof. Mad-Eye Moody, who had a magical eye that could rotate 360 degrees, making him a useful ally in combat. My wife has one of those, but she mostly uses it against the children.
I said mostly.
Some financial industry protocols we use will probably have application in your personal finances as well:
Never transfer money on the basis of emailed instructions. In my world, this can be grounds for dismissal. Always obtain at least vocal confirmation of the details.
Never email or text sensitive personal or financial records. Any crook with a pinch of ambition can breach standard email or SMS conversations, as noted above.
Protect your identity as you would your home. Use extreme caution when discarding any paperwork with personal information on it. Bank account records, credit card bills, tax records, etc.
Many of us recycle paper, meaning a bad guy could sift through our papers in a nice clean and dry environment, without worrying about slogging through dirty diapers soaked in bacon grease and rotten turnips. Thus, paper recycling is now strictly a dual project. No exceptions.
Any and all sensitive paperwork must be recycled separately in a secure manner, shredded or burned.
Don't write cheques to sketchy businesses.
I've personally seen them remanufactured in to fakes, and distributed nation-wide, with potential losses in the hundreds of thousands for a local medium-sized entrepreneur. (We got out of it without losing even a penny, thank goodness!)
In the financial industry, we are required to take some fairly extreme measures to ensure that the people we are dealing with are legitimate. This is probably less of an issue for your garage sale transaction, but for larger transactions, such as real estate, the sale of a business and so on, let the lawyers do their work.
If you keep a safe, and its contents are extremely precious, make sure it is fireproof. You might even consider a dual, or triple-custody locking system. Speaking of which...
A sock under
the mattress
If Peter Pocket-Picker picked a pack of principled preppers, how many packs of principled preppers could Peter Pocket-Picker pick?
Do you know any preppers?
Preppers go way beyond standard family emergency plans.
These are people who are convinced that someday soon the entire Western industrial complex will come tumbling down in to ruins, and their four-year supply of dried moose liver soup will finally prove to be the treasure they always knew it to be.
One way preppers prepare for the worst is to store wealth (such as gold or U.S. cash) in some hidden place only they know.
It doesn't take a risk management diploma to see the potential peril of this pumped-up paranoia.
One bad day, one flood, one fire, or even one forgetful fool, and a lifetime of hard work walks out the door along with that old wheel barrow you were thinking of turning in to a tulip planter.
If you think it's prudent to store some cash off-bank, that's maybe not a terrible idea (I don't do it), but limit it to roughly the same amount you would invest in Venezuelan oil stocks right now - that is, only as much as you are willing to lose.
Be careful out there.
Mark Ryan is an investment advisor with RBC Dominion Securities Inc. (member - Canadian Investor Protection Fund), and these are his views, and not those of RBC Dominion Securities. This article is for information purposes only. Please consult with a professional advisor before taking any action based on information in this article. See Ryan's website at: http://dir.rbcinvestments.com/mark.ryan.
