Fraud Is Now a Family Financial Planning Issue

With the emergence of artificial intelligence, cybercrime is becoming an even greater concern.¹

A text from your child asking for money. New wire instructions moments before a home closing. A phone call that sounds exactly like someone you love. These aren't scenes from a movie anymore. They're increasingly common examples of how fraud is evolving.

While technology plays an important role in protecting your information, some of the most effective safeguards involve people. A family that knows how to recognize suspicious activity and verify important financial requests is often far better prepared than one that relies on passwords and software alone.

Make It a Family Affair

Fraud prevention works best when it's treated as a family responsibility rather than an individual one. Everyone who may be involved in financial decisions, or who could become the target of an impersonation scam, should understand the warning signs and know how your family plans to respond.

Many successful scams don't succeed because technology fails, they succeed because someone feels pressured to act quickly. Discuss ahead of time how your family will handle unexpected requests involving money, sensitive information, or changes to financial accounts. Agree that no one will send funds or share account information until the request has been verified through a trusted method.

Consider establishing protection protocols that involve every family member. It's important to make sure these guidelines cover at least three major areas: how to manage your social media exposure, how to protect your financial accounts, and how to keep your wire transfers secure.⁵

Be Careful with Social Media

Social media accounts present a significant vulnerability. They offer a wealth of personal information that can be used against you and your family. As your family's digital footprint grows, so do the opportunities for cybercriminals to gather information that can be used in AI impersonation scams and other forms of fraud.²

To address the social media issue, you could start by establishing some guidelines for how your family members should and should not use it. Eliminating social media is not realistic, but it's important to agree on what types of information should not be posted online.

Sharing information about large purchases or vacations, for example, is not recommended. You may also want to limit your public online audio and video and set your profile to private.

Even with strong privacy settings, information shared on social media can help scammers create convincing impersonation attempts. AI can generate realistic voice clones or highly personalized messages that appear to come from a child, grandchild, or other trusted family member requesting money or sensitive information.

One simple but effective safeguard is to establish a family verification phrase or password. If an unexpected financial request is made, everyone in the family should know to verify the request using that shared phrase or by contacting the person directly through a known phone number before taking any action.

Strengthen Your Financial Accounts

Financial accounts are another target of cybercriminals. They often attempt to gain unauthorized access to financial accounts through "phishing" emails or text messages that prompt you for account information, passwords, credit card information, or a Social Security number. Sometimes these messages include a link and attempt to create a sense of urgency, hoping that you'll act without stopping to consider whether the link is safe.

Your family's plan should include pausing before clicking on links in emails and text messages, especially those that urge immediate action. Be sure everyone recognizes the source and takes note of misspellings and poor grammar, which are often red flags.

Use a unique password for each financial account. Consider using a password manager to create and securely store your passwords. Also, use security software on all your devices. ³

Multi-factor authentication (MFA) is another must. In addition to a password, this typically requires a code that is texted or emailed to you when you log in. Never share this one-time code with anyone who calls, texts, or emails you.

Whenever possible, consider using app-based authentication, such as Microsoft Authenticator. As an additional layer of security, the app can verify your identity using biometric information, such as a fingerprint or facial scan, or a physical security key that you plug into your device. ⁴

Establish Trusted Contacts

Having trusted contacts on all your financial accounts is another recommended precaution. A trusted contact is someone, often a family member, who is familiar with your normal financial activity and overall well-being. If something appears amiss in one of your accounts, your trusted contact may be contacted under certain circumstances. They can help confirm whether a financial transaction seems consistent with your normal behavior, providing another layer of protection against fraud. ³

While this person would be listed on your financial accounts as a trusted contact, they would not have account authority. They would not be able to trade, withdraw funds, or act under a power of attorney.

Your Advisor Can Help

You don't need to tackle all these safeguards at once. In fact, one of the benefits of working with a financial advisor is having someone who can help you identify the protections that make the most sense for your family's situation.

A conversation may include reviewing trusted contacts, discussing who has authority under powers of attorney or trustee arrangements, identifying where large cash transfers typically occur, and establishing simple verification procedures for unexpected financial requests. These discussions can help ensure your family's financial safeguards are aligned with your broader financial plan.

While no one can eliminate fraud risk entirely, thoughtful preparation can make your family significantly harder to target. As AI continues to evolve, protecting your wealth increasingly means protecting the decisions surrounding it. A thoughtful financial plan helps protect not only your assets, but also the people and processes that safeguard them

Sources:

⁽¹⁾ FBI Internet Crime Complaint Center - https://www.ic3.gov/AnnualReport/Reports/2025_IC3Report.pdf

⁽²⁾ FBI/IC3 - https://www.ic3.gov/PSA/2024/PSA241203

⁽³⁾ FINRA - https://www.finra.org/investors/insights/customer-account-takeovers

⁽⁴⁾ National Cybersecurity Alliance - https://www.staysafeonline.org/articles/multi-factor-authentication

⁽⁵⁾ Corvus -- https://www.corvusinsurance.com/blog/funds-transfer-fraud

This information is meant for educational purposes and not as direct tax or legal advice. Rules and regulations can shift anytime, so it’s always best to consult a qualified tax advisor, CPA, or attorney for guidance tailored to your specific situation.