Protect yourself and your loved ones from fraud
One of the most devastating things that can happen is to be the victim of financial fraud. Unfortunately, financial exploitation is all too common. In the five years ending December 31, 2020, the U.S. Senate Special Committee on Aging Fraud Hotline received more than 8,000 complaints nationwide. That number is expected to grow as our population ages. No one wants to think about their parents or grandparents being taken advantage of, but it’s something you should be prepared for. And it’s not just older adults falling victim to fraud, according to a study by AARP and the University of Stanford, 20% of Americans will suffer from some form of financial fraud before they turn 55.
Tips for spotting and avoiding fraud
The scams outlined below made up more than 65% of complaints.2
1. Government impersonation scams
In government impersonation scams (also known as government imposter scams), scammers pretend to be from the Internal Revenue Service (IRS), Social Security Administration, or Medicare. They may say the victim has unpaid taxes and threaten arrest or deportation if they don’t pay up immediately. Or they may say Social Security or Medicare benefits will be cut off if the victim doesn’t provide personal identifying information. This information can then be used to commit identity theft.
Government imposters may demand specific forms of payment, such as a prepaid debit card, cash, or wire transfer. Using special technology, they often “spoof” the actual phone number of a government agency or call from the same zip code (202 for Washington, D.C., for example). This can trick some people into thinking the caller is from a valid source.
2. Sweepstakes and lottery scams
The sweepstakes scam is one many people are familiar with. Here, scammers notify the victim that they’ve won a lottery or prize of some kind. If they want to claim their winnings, they must send money or gift cards up front—sometimes thousands of dollars’ worth—to cover supposed taxes and processing fees. Scammers may impersonate well-known sweepstakes organizations (like Publishers Clearing House) to build trust among their victims. Of course, no prize is ever delivered..
3. Robocalls and phone scams
One common robocall is the “Can you hear me?” call. When the person says “yes,” the scammer records their voice and hangs up. Robocalls take advantage of sophisticated, automated phone technology to dial large numbers of households from anywhere in the world. While there are legal uses for this technology, robocalls can also be used to carry out a variety of scams on whoever answers the phone. Some robocalls may claim that a warranty is expiring on the victim’s car or electronic device, and payment is needed to renew it. Like with government impersonation calls, scammers often spoof the number from which they’re calling to make it appear as if the call is from a reputed organization.
Yet another popular phone scam is the “impending lawsuit” scam. In this case, the victim receives an urgent, frightening call from someone claiming to be from a government or law enforcement agency (like the police). They are told if they don’t pay a fine by a certain deadline, they will be sued or arrested for some made-up offense.
4. Computer tech support scams
Technical support scams prey on people’s lack of knowledge about computers and cybersecurity. A pop-up message or blank screen usually appears on a computer or phone, telling the victim their device is damaged and needs fixing. When they call the support number for help, the scammer may either request remote access to the older person’s computer and/or demand they pay a fee to have it repaired.
“Tech support fraud is increasingly common and targets some of the most vulnerable individuals. Above all, remember that whether it’s a phone call or a website, legitimate tech support won’t ever proactively seek you out to fix an issue,” said Emma McGowan, a privacy and Security expert at Avast.
5. The grandparent scam
This is so simple and so devious because it uses one of older adults’ most reliable assets, their hearts. Scammers call a would-be grandparent and say something along the lines of: “Hi, Grandma, do you know who this is?” When the unaware grandparent guesses the name of the grandchild the scammer most sounds like, the scammer can instantly secure their trust. The fake grandchild then asks for money to solve some urgent financial problem (such as overdue rent, car repairs, or jail bond). They may beg the grandparent not to tell anyone. Since fraudsters often ask to be paid via gift cards or money transfers, which don’t always require identification to collect, the victim may have no way of ever recovering their money.
In other versions of this scam, the caller claims to be an arresting police officer, doctor, or lawyer trying to help the grandchild. They then use high-pressure tactics that play on the emotions of their victim to get them to send cash as quickly as possible. There are even reports of scammers showing up at older adults’ homes, posing as a “courier” to pick up the money.
6. Romance scams
As more people turn to online dating, con artists are seizing the opportunity. Romance scammers create elaborate fake profiles, often on social media, and exploit an adults’ loneliness to get money. In some cases, these scammers may be (or pretend to be) overseas. They may request money to pay for visas, medical emergencies, and travel expenses to come to visit the U.S. Since they tend to drag on for a long time, romance scams can bilk a person out of substantial funds. The FTC found that in 2020 alone, older adults lost $304 million to romance scams.
What is elder fraud?
Elder fraud is any act that financially exploits an individual who is 60 years of age or older. Many types of fraud, such as romance scams and internet scams, target older adults and are often perpetrated by someone pretending to be who they are not.. Financial abuse can be particularly devastating because it can quickly destroy a victim’s life savings and future financial security.
Signs of elder fraud
Financial abuse can manifest itself in many ways, including a caregiver or family member stealing from their loved one. Family members often overlook or misinterpret the signs of a fraudulent caregiver. To be on the lookout for elder abuse, watch for the following:
- Unusual or unexplained bank account activity. If a loved one’s personal bank account suddenly receives large, unexplained deposits or withdrawals, they may be the victim of financial exploitation.
- Changes in a loved one’s spending or savings habits. For example, giving away a large portion of savings to someone who’s not entitled to it could be a sign of financial exploitation.
- A sudden change in health or appearance. If a parent or grandparent suddenly stops eating properly, stops taking medication, or starts to look unkept, these could be signs of untreated illness or poor care from an exploitative caregiver.
How to protect your loved ones from being scammed
- Stay informed. The best way to protect your loved ones from being scammed is to stay informed. Be aware of current scams, especially those targeting older adults, so you know what to look out for.
- Trust your instincts, if something feels off, it probably is. If a loved one suddenly receives a large sum of money or a financial windfall, especially if it doesn’t seem to fit with the person’s usual earnings, be suspicious.
- Talk with your loved ones. Foster communication between your loved ones and be sure that you tell them what to look out for. Don’t be afraid to ask questions like “who are you talking to?” and “who is sending you money?”
Conclusion
Fraud often takes the form of internet or phone scams and can affect people of all ages. Scammers will reach out, pretending to be someone they are not, and try to trick victims out of their money. There are ways to protect yourself from these scammers, but it’s also important to recognize the signs of abuse and get help if you think a loved one is being mistreated. It can be difficult to recognize financial abuse and intervene, but it’s important to stay on top of your loved ones’ financial situation. If you need assistance with this, I’m here to help. Reach out today.
Sources
Top 5 Scams Targeting Our Nation’s Seniors Since 2015 (2021), U.S. Senate Bill 611
Romance scams take record dollars in 2020, FTC Consumer Protection Data Spotlight. 2021
How To Avoid a Government Impersonator Scam, Federal Trade Commission Consumer Advice, 2021.
BBB Warning: If caller asks “Can you hear me?,” just hang up, Better Business Bureau, 2020
Elmwood Park man loses life savings in bank remote access scam, ABC 7 Eyewitness News, 2021