Financial Scams Targeting Seniors: What to Watch Out For0 USER TIPS ADD YOUR TIP
Unfortunately, there’s no shortage of con artists waiting to take advantage of the elderly. Scams aimed at seniors can happen via the telephone, email, online, snail mail or right in their homes. In fact, almost 17 percent of Americans over the age of 65—nearly seven million people—have been exploited financially, whether getting into an ill-suited investment, being charged fees above the norm for financial services, or falling prey to outright fraud. That’s why it’s important to protect yourself and loved ones against fraud and scams.
Why seniors are so vulnerable
Older adults can be attractive targets because they often have cash from retirement funds and Social Security. Loneliness is a factor too. They may be so glad to be talking on the phone with someone that they get tricked into donating to a charity that turns out to be fake, or attend an “investment luncheon” just to get out of the house. Loneliness can also lead to depression, which can compromise decision-making ability. And people in the early stages of dementia are especially vulnerable to financial scams and abuse due to their cognitive decline.
How to protect a loved one from financial scams
Concerned about a parent or another loved one? Take steps to help keep them safe from scammers:
- Warn them about phone calls from people allegedly from charities or even the IRS. Tell them to just hang up and to never give out any account information, unless they initiated the call.
- If they’re active online, talk to them about keeping computer passwords secret and not sharing other personal information (banking info, Social Security number) online or over email.
- Have an attorney draw up appropriate documents giving you financial power of attorney. This gives you access to their accounts, so you can keep an eye on any changes or suspicious activity in their accounts.
Watch out for these red flags that someone has fallen prey to a scam:
- Have there been any large withdrawals from their accounts, or any unusual patterns that could indicate that someone unauthorized accessed their funds? Review your parent’s bills and financial account statements regularly.
- On the home front, are valuable items missing, or have they hired someone to do what seem like unnecessary repairs?
- Has your parent suddenly given valuables or signed over assets to someone else—including a family member or a trusted person outside of the family?
If you suspect financial abuse by a caregiver or relative, contact Adult Protective Services, your state’s social service agency that investigates abuse and neglect of aging adults. Your local Area Agency on Aging is another good resource. If you or a loved one has been the victim of fraud (say, a fake IRS or lottery scam), alert your state attorney general’s office, your local FBI office, or the Federal Trade Commission.
Scams to watch out for
Being prepared is the best defense. These are the top 10 scams targeting seniors, according to a 2017 report from the U.S. Senate Special Committee on Aging. (In 2018, there’s also a new Medicare card scam to watch out for.) Get to know them, and share these prevention tips with your parents, too:
1. IRS impersonation scams
The basic scam is that you get a call saying you owe the IRS and if you don’t pay ASAP by certified check, credit card, electronic wire-transfer, or prepaid debit card, then some unthinkable scary thing will happen. Rest assured the IRS isn’t going to call you and demand payment or threaten to send law enforcement to your house. If you owe money, you’ll get a letter. The IRS provides more tips on how to spot a scam phone call on their website.
2. Sweepstakes scams
In this classic scam, the target gets a phone call or email saying they’ve won or have been entered to win a prize—and they’ll need to pay a fee to either collect the alleged winnings or up the odds of winning.
3. Robocalls/unwanted calls
Robodialers can distribute pre-recorded messages or connect the person who answers the call with a live person. The culprit is often overseas. They pretend to be from a government agency or bank and ask to verify account or personal information, such as credit card numbers, bank accounts, or Social Security numbers. Con artists can “spoof” the number from which they are calling to hide their true identity or appear to be from someone legitimate, like a government office, or use a number that looks like the caller is phoning from the victim’s state.
The FTC advises that if you get an inquiry from a company or government agency seeking personal information, don’t provide it. Instead, hang up and call the phone number on your account statement, or from the company’s or agency’s website, to confirm that they need something.
4. Computer scams
In this scam, the target receives a call from someone claiming to be from a tech giant like Microsoft or Dell, often claiming that the target’s computer is infected with a virus. They’ll then request remote access to your computer, personal information, and credit card and bank account numbers so you can be “billed” for “fixing: the virus. The FTC offers more advice on what to do if you suspect a tech scam. And if you do need tech support, look for a company’s contact information on its software package or on your receipt.
5. Elder financial abuse
Abuse can come from those closest to an older adult—guardians, people appointed by a court to look after the affairs of another. In a 2010 report, the Government Accountability Office identified hundreds of allegations of abuse, neglect, and exploitation by guardians in 45 states and the District of Columbia between 1990 and 2010. At that time, the GAO reviewed 20 of these cases and found that guardians had stolen or otherwise improperly obtained $5.4 million from 158 incapacitated victims, many of whom were older adults.
6. Grandparent scams
There’s nothing like a grandparent’s love, and that hasn’t gone unnoticed by scammers. The Senate Aging Committee’s Fraud Hotline has received frequent reports of con artists telling victims their family member was pulled over by the police and arrested after drugs were found in the car, or is otherwise in serious trouble. The scammer asks the victim to help by sending money in the fastest way possible. After payment, the fraudster often calls again requesting more money. If you get such a call, ask questions only your grandchild would know how to answer.
7. Romance scam/confidence fraud
According to the FBI, con artists contact victims online, through a chatroom, dating site, social media site, or email. After a time, the caller’s circumstances change—they need money. The FBI says, in addition to losing money to these folks, victims may also have unknowingly taken part in money laundering schemes or shipped stolen merchandise. Be cautious of someone who tells you he or she is in love with you and cannot live without you and needs you to send money.
8. Government grant scams
A phone call from a fake organization like the “Federal Grants Administration” or the “Federal Grants Department” or classified ads in newspapers from such organizations will claim that the agency is offering “free grants,” but the scammer will ask the target to wire money for processing fees or taxes before getting that “free” money. Know that government grants never require fees of any kind.
9. Counterfeit check scams
Criminals have mastered the art of duplicating checks, making them hard to distinguish from legit ones. In one scenario, crooks target victims through classified ads and online auction sites. They agree to purchase a listed item and send a fake check to the seller. The FTC explains that the scammer usually comes up with a reason for writing the check for more than the purchase price, and will ask the seller to wire back the difference after depositing the check. Trouble is, the victim usually won’t figure out the check was bad until after sending the con artist the difference.
10. Identity theft
With personal information like a Social Security number, fraudsters can access a victim’s bank account, apply for credit, and even file for Medicare or Social Security benefits in their name. Again, make it a rule—and make sure your parents know—to never give out personal information on the phone, if you haven’t initiated the call or aren’t 100 percent sure who you are talking to.