Don’t Fall Victim: Tips for Avoiding Financial Fraud and Scams
Every year, millions of older Americans become victims of some type of financial fraud. It’s a massive problem, with the FBI estimating that seniors lose more than $3 billion each year due to fraud.
The National Council on Aging reports that 101,068 people over the age of 60 were victimized by scams in 2023, which represents an 11% increase compared to 2022.
The problem only increases as the older adult population grows. One study found that only about 14% of victims reported the fraud to the police.
Unfortunately, criminals are using new technological tools to make their scams seem more believable and harder to spot.
According to the FBI, some of the most common schemes targeting seniors are:
Romance scam:
Criminals pose as interested romantic partners on social media or dating websites to capitalize on their elderly victims’ desire to find companions.
Tech support scam:
Criminals pretend to be technology support representatives and offer to fix non-existent computer issues. The scammers gain remote access to victims’ devices and sensitive information.
Grandparent scam:
Criminals pose as a child or grandchild claiming to be in immediate financial need, requiring money be sent to them.
Government impersonation scam:
Criminals pose as government employees and threaten to arrest or prosecute victims unless they agree to provide funds or other payments.
Sweepstakes/charity/lottery scam:
Criminals claim to work for legitimate charitable organizations to gain victims’ trust. Or they claim their targets have won a foreign lottery or sweepstake, which they can collect for a “fee.”
Home repair scam
Criminals appear in person and charge homeowners in advance for home improvement services that they never provide. Or, once inside a person’s home, they distract the homeowner and steal valuables. Americans lose nearly $207 million every year to home improvement scams.
TV/radio scam:
Criminals target potential victims using illegitimate advertisements about legitimate services, such as reverse mortgages or credit repair.
Family/caregiver scam:
Relatives or acquaintances of seniors take advantage of them or otherwise get their money.There are steps one can take in order to avoid becoming a victim of fraud.These include:
Be wary of unsolicited calls and emails
Never provide personal information like Social Security numbers, bank details, or credit card numbers by phone or email unless you are sure the source is legitimate. Don’t click on unexpected emails or text messages; always use discretion when opening emails with attachments that could contain phishing attempts or malware.
Verify the identity of callers and visitors
Always ask for identification when someone calls, emails, or visits in person, claiming to represent an organization. If you receive a phone call, consider hanging up and calling the official number of the organization (from a verified source) to confirm the claim. Government agencies like the IRS or Social Security Administration will never demand immediate payment or sensitive information over the phone.
Proceed with caution when considering offers that seem too good to be true
Be skeptical of deals or investment opportunities that sound unusually profitable, easy, or urgent. Scammers often pressure people into making quick decisions. Take time to research any opportunity or consult with a trusted friend or financial advisor.
Resist pressure for immediate action
Scammers use high-pressure tactics to create a sense of urgency. If someone demands immediate payment or personal information, take a step back, breathe, and don’t be afraid to hang up or say ‘no.’
Use secure payment methods
Avoid wiring money, using prepaid cards, or making payments through unfamiliar platforms. Scammers often ask for payment this way because it’s hard to trace and recover. Use verified payment methods and be cautious with online transactions.
Limit social media sharing
Avoid posting sensitive information online, like full birthdates, addresses, or travel plans. Scammers often gather personal information from social media profiles to make their scams more convincing.
Use strong passwords and enable two-factor authentication
Use unique passwords for different accounts and enable two-factor authentication (2FA), such as using your password and then receiving a text with a code on your cell phone whenever possible.
Discuss offers with trusted friends or family
A University of Michigan study found that older adults who feel lonely or are suffering a loss are more vulnerable to financial fraud. Talking to friends or family about potential offers or requests can provide a second opinion. Scammers often target people in isolation, so staying connected and discussing any doubts can be very helpful.
Stay informed on common scams
Be in the know about common scams, especially those targeting older adults, like Medicare scams, sweepstakes scams, or grandparent scams. The Federal Trade Commission (FTC) and AARP offer descriptions of new scams and resources to keep people informed on the latest scams. The FBI even has a podcast detailing scams and how to avoid them.
Sign up for a fraud alert service
Consider using a fraud alert service to monitor credit reports and financial transactions. This can help seniors detect suspicious activity early on and take action to prevent further damage.
Financial fraud is a growing threat, but staying alert and informed can make all the difference. Recognizing warning signs, resisting pressure, and leaning on trusted people are key steps in protecting yourself. At The Carrollton our team is always here to be a second set of eyes or ears whenever you have questions or concerns, helping you stay safe and secure.