Fraud Prevention Tip: Create a Family Code Word

In our last issue, we talked about the advancement of artificial intelligence (AI) and how it can be used to facilitate fraud. One particularly insidious form of fraud involves scammers impersonating family members or trusted authorities over the phone to deceive victims into providing money or sensitive information. This is considered what’s called a “deepfake,” which are videos, voice recordings and images doctored using AI to resemble and/or sound like a friend, family member, government official, etc. That’s why creating a family code word is a simple yet effective measure to protect your loved ones from falling prey to such schemes.

What is a family code word?

A family code word is a prearranged, secret word or phrase known only to your immediate family members. It serves as a private verification tool to confirm the identity of a caller or texter claiming to be a family member. This code word can be used in emergencies, when communicating through unfamiliar phone numbers or during situations where trust needs to be quickly established.

How scammers exploit trust

Scammers often rely on emotional manipulation to pressure their victims. Common tactics include pretending

to be a relative in distress, such as a grandchild needing bail money or a sibling involved in an accident. They might even use personal details gathered from social media to make their stories more convincing. In these high-stress moments, people are more likely to act without verifying the authenticity of the situation.

This is where a family code word can be invaluable. By asking the supposed family member to provide the agreed-upon word, you can immediately distinguish between a genuine emergency and a fraudulent attempt.

Here are some tips for creating a code word:

• Choose a unique word or phrase. Select a word that’s easy for your family to remember but difficult for others to guess. Avoid using common or predictable words like pet names or birthdays.

• Communicate it securely. Share the code word with all immediate family members in a secure setting, such as an in-person family meeting. Emphasize the importance of keeping it private.

• Establish guidelines. Agree on specific situations when the code word should be used. For example, if a family member calls from an unknown number or requests money unexpectedly, the code word can serve as a verification step.

• Practice its use. Conduct mock scenarios to ensure everyone understands how and when to use the code word effectively. This can help younger family members or seniors become comfortable with the concept.

• Update as needed. Periodically review and change the code word, especially if you suspect it has been compromised.

A family code word adds an extra layer of security that scammers cannot easily bypass. While they might impersonate a loved one convincingly, they’re unlikely to know your family’s private code word. This simple safeguard empowers you to pause and verify before responding to urgent-sounding requests, reducing the likelihood of falling victim to fraud.

Additional tips for fraud prevention

• Stay calm under pressure. Scammers thrive on creating a sense of urgency. Take a moment to verify the information before acting.

• Limit personal information online. Be cautious about sharing details on social media that scammers could exploit.

• Report suspicious calls. If you suspect a fraud attempt, report it to your local authorities or the Federal Trade Commission (FTC).

• Educate vulnerable family members. Ensure that children, seniors and those less tech-savvy understand the risks and how the code word works.

A simple step for peace of mind

In an era where fraudulent schemes are increasingly clever, a family code word provides a straightforward and effective way to safeguard against deception. By taking this proactive measure, you not only enhance your family’s security but also foster a sense of preparedness and unity. Remember, a little precaution today can save you from significant trouble tomorrow.

This information was provided by the Washington Bankers Association as part of the Banker’s Care initiative. Bankers Care began as an annual food drive, working in partnership with Northwest Harvest and has since expanded to include financial literacy and education programs and other philanthropic and community service contributions made by banks. Heritage Bank is a Bankers Care participant.