High-pressure e-mails and phony Internet addresses touting bogus mutual fund Web sites are a problem that investors must learn how to deal with in advance if they are to avoid being stung by such a scam, according to Pax World Funds.
The company, which features socially and environmentally responsible mutual funds, issued six “phishing tips” that mutual fund investors can use to spot and avoid fake mutual fund Web sites, including those that are promoted by what may at first appear to be legitimate e-mail messages.
Portsmouth, N.H.-based Pax World Funds in June cooperated with the U.S. Securities and Exchange Commission (SEC) to shut down an unauthorized version of the Pax World Funds Web site. The look-alike Pax World Fund Web site offered outlandish promises of returns on investments and also charged excessive and impermissible fees. Results of the cooperation can be read here.
“Our eye-opening experience led us to conclude that mutual fund investors and investment companies need to know more about the dangers posed by phishing,” said Thomas W. Grant, president of Pax World Funds. “What we are doing today is sharing what we learned about phishing swindles in the mutual fund context and what people can do to protect themselves. It is our hope that this information will be of real value to all mutual fund investors.”
A typical phishing scheme will use a seemingly legitimate e-mail to deceive the recipient into thinking it is a message from a trusted company or government agency, rather than the con artist who is actually behind the communication. The purpose of a phishing scheme is simple: get the potential victim to disclose his or her account information, wire transfer details, credit card account numbers, Social Security number, passwords and other sensitive information.
In the case of mutual funds phishing scams, an investor may actually be lured into making phony transactions on a Web site that looks something or exactly like the home of a legitimate investment company. In addition to mutual funds and credit card companies, recent phishing schemes have involved “cloned” e-mails and bogus Web pages falsely put forward in the name of government agencies, including the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the Securities Investor Protection Corporation.
Based on what was learned in combating a phishing scheme, Pax World Funds issued the following six tips for mutual fund investors:
1) Keep a sharp eye out for high-pressure e-mails urging you to divulge personal financial information or to start making transactions at a new Web page. Phishers rely on urgent—and even upsetting—statements in their e-mails in order to goad people into taking immediate action. You may be asked to provide or “verify” user names, passwords, credit card numbers, checking account withdrawal codes, Social Security numbers, etc.
If you get an e-mail that warns you, with little or no notice, that your mutual fund account will be shut down unless you reconfirm your information related to the account, do not reply or click on the link in the e-mail. Instead, contact the mutual fund company by phone or by going directly to its main Web site, which most likely already is known to you. Check out the substance of the e-mail first instead of just automatically replying or clicking on the Web links in it.
2) Make sure you only conduct Web-based transactions on a “secure” page. The most common mistake is replying via e-mail with your confidential financial or account information. No legitimate company is going to ask you to do that. Instead, they will send you to a Web page that has been made secure for e-commerce purposes. If an e-mail urges you to click through to what is supposedly a Web page for your mutual fund, look for evidence that it is a “secure” page.
Among the positive signs that you may see is a URL starting with “https:” (instead of just “http:”) or a padlock icon on your browser frame. While it is a good thing to check for such security, keep in mind that this is not a foolproof way to keep phishers at bay. Some con artists who are phishers have legitimately acquired or forged such security.
If you are uncertain about the actual level of security associated with a mutual fund transaction Web page, the best bet is to close your existing browser window, open a new browser window and then go through the main mutual fund company Web site that is already known to you.
3) Be on guard for suspicious Web site addresses. Is the mutual fund Web site address that you are sent to different from the one that you have used before for your mutual fund account? Does the URL contain the mutual funds name (or some variation of it)—along with other words or numbers? These are possible signs of a “cloned” or bogus mutual fund Web site page.
Another common situation in a phishing scheme is a Web page that includes some, but not all, of the art, icons and navigation system of the Web site that has been “cloned.” Play it safe: Only use mutual fund Web site addresses that you have used before. If you are uncertain about the authenticity of a Web page, contact the company directly by phone or by closing your browser, opening a new browser window and then going directly to the main mutual fund company Web site address.
4) Review your mutual fund account statement carefully. Are there trades missing? Has someone conducted trades that you did not authorize? Is your account statement late or missing altogether (possibly as a result of getting rerouted to the mailing address of a con artist)? Your account should only cover transactions that you have personally authorized and undertaken.
5) Take advantage of the technology available to fight phishing schemes. Ensure that your browser is up to date and that security patches are applied.
Some phishing e-mails contain software that can harm your computer or track your activities on the Internet without your knowledge. Anti-virus software and a firewall can protect you from inadvertently accepting such unwanted files.
6) Report the problem! Even if you only suspect that you have been approached by a phishing scheme, let your mutual fund company know immediately. Send your mutual fund a copy of the e-mail and the possibly bogus Web site address. (When forwarding e-mail messages, make sure to include the ENTIRE original e-mail with its original header information intact.) It also is a good idea to file a complaint with the FBIs Internet Fraud Complaint Center.
Current or prospective shareholders with questions about any suspicious e-mail or Web site claiming to be a mutual fund company should contact their firm by telephone, or by writing directly to a known contact. Pax World Funds can be reached by phone at (800) 767-1729 or by e-mail at firstname.lastname@example.org.