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Financial Education Suspended: Vulnerability to Cybercrimes

15 May, 2024 | M Aparicio

We want to prepare this article with great care and dedication due to the significant importance it has and should have for citizens to achieve good financial education and to be well protected against cybercrime.

Deceptions, scams, and frauds have always been present throughout humanity, but now, thanks to the great advances in technology and relying on their channels and methods, we are faced with extreme figures of cybercrime, increasing the likelihood that any of us could be a victim at some point, once or even several times.

We will focus the article according to four aspects that we consider important within financial education:

Knowledge about cybercrime and some of its most representative examples.
The importance of knowing how to handle financial products that involve certain complexity, such as mortgages, investment funds, etc.
Learning to organize and plan our personal economy to achieve a healthy financial state.
The need for financial education as a mandatory subject in the educational system.

The Need for Financial Education

Cybercrime

All citizens should be aware of cybercrime, know of its existence and its extensive variety and typology, to be able to prevent, protect ourselves, and act against it.

Cybercrimes hold great importance within financial education, but there are many other topics that should also shape it.

Complex Financial Products

We all know about the significant abusive clauses contained in many of the mortgages granted during the economic expansion phase, which gradually came to light after the burst of the real estate bubble.

Many citizens signed mortgages beyond their means and did so with minimal knowledge of the various variables that make up a mortgage, and what is most regrettable is that this continues to occur.

However, currently, thanks to the regulation, transparency, and protection of clients that has been established in recent years through royal decrees, resolutions, and circulars, the potential for abuse and the possibility of signing contracts that can easily become harmful has been significantly limited.

Planning Our Personal Finances

We are also aware of the need to have sufficient financial skills to organize our daily and personal finances in order to avoid falling into situations of over-indebtedness or even bankruptcy, which could lead to desperate situations of economic suffocation and prevent us from leading a dignified life, even causing psychological disorders such as anxiety or depression.

Financial Education as a Mandatory Subject Throughout the Educational System

Therefore, at Hipotecas Plus, we consider it crucial that financial education becomes a mandatory subject at all educational levels. This would not only help us manage our finances better, but it would also provide us with tools to protect ourselves from external threats, such as cybercrime, and we would know how to handle complex financial products much more effectively.

Financial Education from a Global Perspective

Following the previous introduction, we can now say that financial education is a set of knowledge that not only involves knowing how to manage our money or our income.

It should be a powerful tool that grants us skills to organize our economy intelligently and allows us to move our money safely, protected from cybercriminals who are always ready to take advantage of any loophole with the ultimate goal of committing fraud.

Seeking Financial Knowledge

It would be severely detrimental to simply remain ignorant about cybercrime. Against it, we must arm ourselves with knowledge, because ignorance will be the key with which they will deceive us, defraud us, and ultimately rob us.

If we lack financial education in our cultural background, it places us in a position of vulnerability. It leaves us in a state of fragility, exposure, and risk from money swindlers.

We must be aware that the techniques of cybercriminals are becoming increasingly sophisticated and the chances of falling into their nets are ever higher, especially if we are vulnerable people who do not take care to protect ourselves and arm ourselves with knowledge.

We will now detail some of the most common scams and against which it is advisable to always be well protected.

Phishing

Phishing is a sophisticated technique where scammers convince their victims that they are professionals from legitimate institutions, thereby obtaining our most confidential information, our personal data, passwords, our very identities, and with all this, they can have the necessary tools to cause us significant economic disaster.

Through fraudulent emails or websites that look identical or very similar to those of your bank or any financial institution you are a client of, you are asked to update your personal information. In this situation, you are a potential victim of phishing.

Financial institutions are tired of stating that they will never ask for anyone’s personal data or passwords.

No matter how authentic the email looks compared to the bank or financial institution we often deal with, we can always find clues that they are trying to deceive us: grammatical errors, the domain address is not exactly the same as the real bank or financial institution, the format or colors might have slight variations…

By acting cautiously, under the premise that we are being asked for very sensitive information, we can avoid the scam and immediately cut off contact with the scammers.

Investment Fraud

It’s a long-standing classic, now rampant in the technological era. But its principles remain the same: offering juicy and even incredible returns in a very short time. Immediately, the following maxim should come to mind: “If it’s too good to be true, it’s probably a scam.”

Victims are tempted by the prospect of a quick and substantial return on their invested money, but ultimately all the invested money ends up in the hands of the scammer if they manage to realize their deception. Behind this tempting investment lies a psychologically Machiavellian design intended to easily ensnare victims.

In this link, you can read a BBC news story about how a man lost over $500,000 in Bitcoin through a fake Elon Musk account, which included a link to a page that looked entirely professional where participants’ Bitcoin amounts were supposedly doubled after being sent to another account.

The outcome was clear: the victim sent his Bitcoins but there was no return. We invite you to read this dramatic news story to understand how scammers can operate.

With financial education, you already know that if an offer seems too good to be true, you will recognize the scam, stay away, and keep your money safe.

Identity Theft

Another significant danger is identity theft.

In this type of cybercrime, scammers gain access to your personal data and can use it to apply for credit cards, make fraudulent transfers or financial transactions in your own name, and even open bank accounts.

If you have financial education, you will always keep your personal data and passwords protected and never allow access to them.

Organizing and Planning Our Finances

Financial education will not only be a powerful antidote against cybercrime but will also help ensure our economy and finances are solvent and healthy.

Currently, most banks and other financial portals provide us with professional tools that can help us manage our finances successfully. With these tools, we can have:

Control of Our Expenses
Planning Our Savings and Investments
Identifying Where We Can Improve Our Finances
How to Create an Ideal and Realistic Budget
How to Build a Financial Cushion to Protect Ourselves Against Uncertainties and Unforeseen, Inevitable, and Urgent Expenses, and to Avoid Debt.

In short, how to make the smartest possible decisions with our money.

With excellent financial education, we may not need these kinds of tools because we will know how to develop and follow a personalized budget that suits our needs and priorities, but they can always offer useful ideas and advice.

Conclusions

In this new article from Hipotecas Plus, we have seen the importance of financial education in order not to find ourselves unprotected and vulnerable to scams and cybercrime, and also its necessity to provide us with sufficient knowledge to understand everything necessary about financial products that involve an extra level of complexity.

Last but not least, this same financial education will be of great use in organizing and planning our economy wisely, thus achieving the healthiest finances possible.

We insist that we consider financial education should be a mandatory subject across the entire educational spectrum.