It’s understandable why con artists choose to target retirees for their more expensive scams. Many retirees are less likely to have someone to help them identify scams, which is in part because of the social isolation many older adults experience, and in part because of the discomfort of changing family dynamics. After years of being the family CFO and
financial decision-maker, retirees can feel awkward asking their adult children for advice.
The important thing to remember is that you can protect yourself, your money and your family from scammers. Whether you’re looking out for yourself, your parents or your adult children, here’s what you need to know to keep your money out of a con artist’s hot little hands this holiday season.
Although con artists are constantly coming up with new and innovative ways to separate you from your money, there are truly only a few types of schemes that they use. Everything else is just a variation on one of these five themes:
One of the most common ways for a scammer to get your banking information is for them to call you or email you, posing as a customer service agent, and simply ask you to verify information about your account.
We are so used to doing this sort of verification when we call our banks and credit card companies that it can seem natural to give your
Social Security Number to the professional-sounding stranger on the other end of the phone who asks nicely.
But you should never give out identity-related information to someone who initiates contact with you. What you should do is hang up on the caller and contact the institution directly. Then you can determine if the initial caller was legitimate.
Do likewise with emails that appear to be from your bank or other financial institution that ask you to reply with identifying information. Contact your bank directly to find out if there is an action you need to take. If there is, navigate to your bank using the official website, not through a link in the email — these can sometimes direct you to a scam site that looks legitimate but actually is capturing your log-on credentials.
2. Scams Exploit Your Fear
Fear has a way of short-circuiting our rational responses, which is why scammers often aim to make their targets feel afraid. If you are scared, you are more likely to send money first and ask questions later.
Here are some of the most common ways that scammers try to exploit your fear:
- Grandchild in trouble. With this scam, you receive a call from a young person who sounds a little like your grandchild. They tell you they are at the hospital/in jail/otherwise in trouble and need money, and then they beg you not to tell their parents. It’s natural that you would want to protect your grandchild and these scam calls can sound very convincing. But rather than wiring money right away, call another family member to find out exactly where your grandchild is.
- Lost money. In this case, the scammer will show you some sort of “evidence” that your account is empty or that you are about to lose your benefits. The con artist will then promise to fix the problem — for a price. As with other unsolicited calls from institutions, the key to thwarting this scheme is to hang up and check the information yourself through official channels.
- Imposing institutions. Scammers will sometimes claim to be calling from the IRS, using your anxiety about everyone’s favorite government institution as a way to get at your money. Similar schemes involve scammers claiming they are from the power company and they will shut off your power if you don’t pay right then and there. It’s important to remember that the IRS will only correspond with taxpayers through the mail, even in the case of an audit or other serious issue. And any other threatening call can be checked with the institution.
- Threats. In many cases, scammers will start using more direct threats if you have already given them some money and are balking at the idea of sending more. These con artists rely on both your natural reticence about sharing financial information — and your fear of their threats — to keep you from doing what’s best for you: contacting the authorities. If a scammer has started threatening you or your family, call the police and report the situation. Threats are a police matter, and you do not have to deal with them alone. You also should report the scam to the FTC.
3. Scams Exploiting Your Greed
Another easy way to short-circuit your rational thought processes is to put dollar signs in your eyes. These scams promise a big payout for a “small initial investment.” This is the basis of the infamous Nigerian email scams, yet you can find any number of greed-based scams out there.
One of the more common scams tells you that you have won the lottery, but you need to prepay the taxes in order to receive your prize. Scammers pretending to be calling with your lottery money may also solicit your banking account information in order to “deposit” your winnings.
Retirees also are often targeted with “no-fail” investment schemes that promise the moon and stars. This can be particularly tempting to an older adult who is feeling a little worried about the size of their nest egg. But after putting down your investment, the scammer disappears with your money.
4. Scams Exploit Your Sympathy
Con artists often use your compassion against you to get your money. The most common version of this is the charity scam, which you’ll often see in the wake of a major disaster. Fraudsters will set up fake websites that mirror actual charities, in addition to making phone calls and going door-to-door pretending to represent the charity.
The other way scammers exploit your better nature is to convince you that they personally are in dire straits and need your help. This kind of scam usually relies on an already-established relationship, and is often the end result of a romance scam or other long-distance “friendship.”
In both cases, you can protect yourself by only giving money directly. Donate to charity directly, rather than through phone, email, or door-to-door solicitations. If a friend says they need money for rent or a medical procedure, offer to pay the landlord or hospital directly.
The
FTC compiled a list to help make sure your dollars count for good, including researching the charity name plus “complaint,” “review,” “rating,” or “scam.”
5. Scammers Play the Part of an Expert
Scammers often target those who are feeling overwhelmed by their financial decisions, since it can feel like a relief to hand those choices over to someone who clearly knows what they are doing and wants to help. But a con artist doesn’t actually have to know anything to be able to fake competence.
Older adults in particular are vulnerable to “experts” who offer to help them with financial problems. These can range from inappropriate annuities to
reverse mortgage fraud. This is why it’s important to always get a second (and unbiased) opinion before you go ahead with any financial opportunity. Don’t let the expert who is selling you something be the only expert you talk to.
A similar tactic is when a scammer calls to “alert” you to a critical issue with your home computer system or network. Often, scammers claim there is a problem with security and offer to help protect your computer and files from viruses or hacking. These “tech support” calls can sound very convincing, and they play on the assumption that some older adults are not tech savvy. As a rule, you shouldn’t expect to receive inbound tech support calls from your computer or service providers.
