Year over year, older adults find themselves victims of some type of financial fraud. All told, according to a 2019 Senate Special Committee on Aging, seniors lose an estimated $2.9 billion each year to fraud schemes.
No matter your age, many people may feel confident in their ability to spot a scam. (Who hasn’t gotten that email announcing the “Crown Prince of Astrodemus” has left you $1 million and all you need to do to claim it is share your bank information?) Despite the obviousness of some of these tactics, fraudsters are clever. Read on for more information on some of the most common elder financial fraud schemes, and how to prevent them.
Five Common Elder Financial Fraud Scams – and how to prevent them
Year over year, older adults find themselves victims of some type of financial fraud. All told, according to a 2019 Senate Special Committee on Aging, seniors lose an estimated $2.9 billion each year to fraud schemes.
No matter your age, many people may feel confident in their ability to spot a scam. (Who hasn’t gotten that email announcing the “Crown Prince of Astrodemus” has left you $1 million and all you need to do to claim it is share your bank information?) Despite the obviousness of some of these tactics, fraudsters are clever. Read on for more information on some of the most common elder financial fraud schemes, and how to prevent them.
1. FRAUD: Impersonating the IRS. Millions of Americans, young and old, have been targeted by scammers fraudulently representing the IRS. In many cases, criminals claim victims owe back taxes, warn of foreclosure or wage garnishment, or worse, threaten prison.
PREVENTION: Know your rights. The IRS will never:
- Call demanding immediate payment or call without having sent a previous US Postal Service notification of an error.
- Require specific (credit card) payment over the phone.
- Ask for your Social Security number or credit card information by phone.
- Threaten you with police or legal action for not paying.
Contact USA.gov for more information on reporting IRS scams.
2. FRAUD: Unusual bank account activity. Many older adults rely on caregivers or family members to provide for them. This support ranges from day-to-day caregiving, to companionship, to handling bills. Red flags go up when large, unexplainable withdrawals occur, new accounts are opened, or non-sufficient funds notifications arise.
PREVENTION: Begin a family conversation.
- Verify who is and is not a signer or authorized agent on behalf of the older adult.
- Be vigilant in monitoring credits, debits, transactions, and transfers between and out of bank accounts.
- Separate duties, such as one family member balances the books while another family member pays the bills.
3. FRAUD: Telemarketing scams. Bogus charity solicitations, high-pressure sales techniques, and aggressive callers can make victims feel it’s easier to say “yes” than just hang up.
PREVENTION: Don’t buy from an unfamiliar company.
- It sounds simple, but ask yourself, “Do I know who or what this company (or charity) is?” No matter the slickness of the pitch, rely on your intuition to spot the fraudster. Other tips:
- Ask for written material to be mailed or emailed.
- Review the company online.
- Ask for the caller’s name, contact information, and the business’s license before exchanging money.
- Don’t give in to time-sensitive pressures. The linchpin of a telemarketer catching you on the phone is often phrases like, “I can’t guarantee this price if you call back,” or, “It is only valid during this initial call.”
- Take your time. Remember, YOU control what happens to your finances. Don’t be afraid to say no!
Ask to be removed from telemarketers’ lists by signing up for the National Do Not Call Registry.
4. FRAUD: The grandparent con. In this scam, victims receive a call from someone impersonating a grandchild in distress who “doesn’t want their parents to know.” The grandparent scam has been around for a few years. Have you gotten a call like this? The phone rings, a scared voice asks, “Is that you, Grandpa/Grandma?” The caller identifies himself as your college age grandchild. He’s in Boise (or any other city in the world); he’s been arrested, and he needs bail money immediately. “Could you wire $5,000 immediately? Don’t tell Mom and Dad; they’ll be mad.”
PREVENTION: Trust but verify!
- Take down the number, but do not send money or personal information. Also, don’t be duped by lines like, “Here, let me hand the phone over to the police.” That’s probably just another scammer!
- Call or text your grandchild directly.
- Call their parents.
5. FRAUD: The romance scam. You’re lonely and go on a dating site to meet someone. Soon, a connection blossoms, and with that comes requests for money for travel, hotels, visas, and more.
PREVENTION: Talk to someone you trust.
- Stop communications immediately.
- Pay attention if friends or family express concern.
If you think it’s a scam, report it to the Federal Trade Commission. Notify the website or app where you met the scammer, too.
For more information on preventing elder financial fraud, visit the AARP Fraud Watch Network or consult with your financial advisor or trusted family or friend.
