While spring brings about warmer weather and colorful flowers, it also brings an uptick of financial scams, due in part to con artists targeting tax returns. These scams disproportionately target the elderly. While nearly 90% of elders surveyed believed they could spot a scam, nearly 30% were unsure about common scam tactics – like whether or not the IRS accepted gift card payment or if the IRS would call and say there was a pending arrest for unpaid back taxes (neither are true.) It is estimated that more than $37 billion is taken from seniors in a year’s time from various scams.
Technology has increased both the number and sophistication of financial scams. Hackers are able to break into social media accounts and pose as other people, phone numbers can be bought and cloned to avoid telemarketing laws and callers are using public information gathered through the internet to appear to be legitimate.
But what every good scam has in common is playing on the victim’s emotions – typically love or fear.
Common Scams And How They’re Executed
Phishing and Baiting
Done by email, these scams are very similar. An email is sent that has shortened or disguised links that will take a victim to a website that appears authentic, but it actually will steal the personal information that is entered. Baiting emails also often have a link that contains a virus that will harm a computer.
Today’s older population grew up in a time when manners and trust were paramount. Scammers play to this sense of trust in these scams. The wording is innocuous (i.e. please update your records, or there appears to be a problem on your account, log in to make security changes) and there seems to be no harm. Anytime you receive an email requesting personal information or to click a link to a site you don’t recognize, delete the email immediately. You can go directly to any site you do business with and log in securely. Another safety feature is to look for the “lock” symbol on the internet search bar. If it is unlocked, DO NOT enter information!
These are usually phone calls and there are 2 versions: 1) The caller will tell you that you must send funds (typically by gift card) to pay for back taxes or face arrest. 2) A caller will claim to be a tax account that can file your taxes for you using little known deductions and get you a better refund.
The IRS will NEVER call regarding payment for taxes. Letters are mailed from the IRS with contact information. Scammers will prey on fear to act quickly – usually within 30 minutes – “to have them stop the deputy that is on the way to your home.” NEVER give personal information to a person that calls you unsolicited. Even if they appear to have basic facts about you – like address or birthday – do not agree to give them money or provide access to accounts.
Often used on Facebook, this can also be done over the phone. A message or phone call is sent (calls often come from overseas or prisons and can rack up costly phone bills as well!) and the victim is told a loved one is in danger or in jail and that money should be sent immediately.
Preying on love for family, the scammer tells the victim that time is of the essence and that the only way to help the person is by sending a gift card immediately. Usually the con artist asks for the number off the back and then uses them immediately.
You’re a Winner!
Commonly referred to as the Nigerian Email scam, this ploy too can be conducted by phone. A target is told they have won something – usually a large sum of money – but the only way to collect is by “releasing” the winnings with a payment.
Elders are often concerned about finances and these scams appear to be a surprise solution. Unfortunately, any money wired to the scammer is typically untraceable and lost, with no winnings received.
7 Tips To Avoid Being A Victim Of Financial Fraud
- Never give out financial information over the phone unless you initiate the call and are confident you are speaking with an official representative. You can always request a case number and call back using a number that you know is legitimate.
- Do not engage with the scammer. The longer you are on the phone or communicating through email or messages, the more likely you are to let your guard down and provide private information.
- Be password savvy. Yes, it’s a headache to remember what passwords for various sites but avoid using the same password for multiple accounts. Additionally, heed the advice to make the password “strong” using capitals, numbers and symbols. NEVER use common information like a birth date and consider changing passwords regularly.
- Don’t trust your caller ID. Scammers are able to use throw away numbers with local area codes so that people are more likely to answer a call. They can also make a legitimate name appear on the ID. Again, hanging up and calling back a number you trust will help stop a phone scam.
- Don’t pay upfront for anything you haven’t seen.. Don’t fall for it. Not only have you not won anything, your money will be long gone by the time you realize it’s not coming.
- Hang up on robocalls! If you hear a recorded message, hang up and report it to the FCC. The calls are illegal. Do not ever press 1 to speak to a person or have your name removed from a list. This just confirms the phone number is active and can lead to more calls.
- Don’t deposit a check and then wire the money. Checks can be bad and the issue not discovered for up to several weeks. At that point you will be responsible for covering the bad check at the bank since the contact information will be fraudulent.
Ways You Can Help Your Loved One
- Stay involved in their life. You can help protect them from being targeted by reducing their sense of isolation and loneliness, which can make them more susceptible to a “friendly” con artist.
- Get a copy of their credit report every year. Review the report together to check for accuracy and address errors promptly.
- Buy a shredder. Safe guarding personal information is one of the best ways to avoid identity theft and scammers.
- Be aware of changes in financial behavior. For instance, if someone that is normally very frugal withdraws a large sum of money, they may be paying toward a scam.
- Be aware of new friends or romances. “Sweetheart” scams are increasing and again prey on loneliness. These fake friends will convince your loved one they have their best interest at heart. Other family members that suddenly take an interest in an elder can also be a warning sign.
- Be supportive after a scam. If an older adult does become a victim, they may feel embarrassed. Responding in a non-judgmental way will make them more likely to talk about the incident with you and law enforcement or financial advisors. If your loved one is a victim of a scam, time is of the essence to try and recover funds or catch the criminal. Waiting allows the trail to run cold and also increases the likelihood memories will become fuzzy.
If you are ever in doubt, DO NOT give your financial information to anyone until you have researched and discussed the request with someone you trust, like a loved one or caregiver. Con artists want to pressure you into making a decision quickly. If the situation is legitimate you will be able to call back and settle the issue after discussing your options. The old adage “If it seems too good to be true, it probably is” holds true in the world of money schemes.
**If you spot a scam, report it at ftc.gov/complaint. Your reports help the FTC and other law enforcement investigate scams and bring crooks to justice.**