Seniors Are Often Targets of Financial Scams: Here’s How You Can Help Protect Them

According to the Federal Trade Commission, senior citizens across America lost over $193 million in the year 2020 due to phone scams alone. During the pandemic, there has been an increase in scams, both online and offline. Unfortunately, seniors are often the target of scams. If you have elderly parents or parents who don’t keep up with technology, it’s understandable that you want to protect them from being targeted by criminals.

In this blog post, we share everything you need to know regarding how to protect your parents from financial scams.

What Is Financial Fraud?

Financial fraud happens when a person takes money or other valuable assets from another through the use of criminal activity or deception. While financial fraud has existed for a long time, it has increased on online mediums and in recent years. Scammers have been taking advantage of the Covid-19 pandemic and have conned people out of their money under the pretense of providing jobs.

During these times of uncertainty, it is beneficial to know as much as possible about existing scams that you may encounter and how you can avoid them. Below are just a few things you can do for scam prevention that will keep your elderly loved ones and their hard-earned retirement funds safe and sound.

Warn Them About Investment Fraud

There will be many “experts” who offer to help your parents manage their retirement savings or invest their money to grow their existing savings. However, these scammers will only exploit them; be sure to conduct a thorough background check on all investment and financial advisors by using the Financial Industry Regulatory Authority’s BrokerCheck. You can also tell your parents to ask them questions regarding the licenses they have if any of their past clients have taken disciplinary action against them, and if they have any references they can provide.

If your parents find that the so-called professionals can’t provide clear answers to each question, this is a red flag, and your parents should steer clear of them. Other red flags to look out for include:

• Promises of “guaranteed” high returns with no risk

• Lack of knowledge when asked questions

• No documentation about their services

Tell Them About Common Scare Tactics

One of the most common ways scammers commit fraud is by scaring the elderly. Be sure to share the following with your parents to prevent them from getting scammed:

• If a caller or individual online claims that they’ve kidnapped a family member or are asking for funds for emergency care needs, it’s best to check on that family member first to verify. It’s better to risk an awkward phone call than to give money to a stranger for no reason.

• If a caller asks for immediate payment after claiming that an account is suspended or closing, they are not to be trusted. This is suspicious activity and you or your parents should contact the account’s financial institution immediately.

• If a caller claims to represent their bank, insurance company, or a government agency and asks for payment, account information, or sensitive details, they are a fraud. Legitimate institutions require verification and will usually communicate this type of information by mail or secure messaging service. Do not conduct business with the fraudulent individual and call your parents’ institution immediately.

Phone scammers can be convincing, so emphasize to your seniors that real government agencies and businesses will notify them via mail if there are serious financial matters to be settled. Additionally, they will always provide ample time to get everything in order, so someone that is trying to rush them along is almost definitely a fraud. Should your parents be subjected to scare tactics, remind them to never provide personal information or payment and that they can always turn to you for further advice.

Remind Them To Never Share Personal Information

As mentioned above, always remind your parents never to provide their personal information, because it is another tactic that scammers use to get away with crimes like credit fraud, bank fraud, or identity theft. This means they should avoid disclosing information such as:

• Social Security numbers

• Account numbers

• Passwords

• Personal information such as name, address, and year of birth

This is especially true if they receive a call from someone claiming to be from an unknown institution or agency. Of course, they won’t need to be this strict if they made the call themselves to check up on their account or to sort out details.

Tell Them Not To Trust Caller IDs

Today, caller ID is a standard feature on most smartphones and even landlines, making it easy to identify who is making a call. However, seniors need to know that criminals can easily falsify caller IDs — it’s best to encourage them not to completely trust caller IDs, and to beware of calls from Social Security, Medicare, the IRS, and financial institutions. A good way to combat suspicious calls is to let unsolicited calls from government agencies and businesses go to voicemail.

They can then check the number from the call against trusted sources, such as paperwork from their account or the business’s official website.

Have Them Register on No-Call Lists

Be sure to have your parents included on the National Do Not Call Registry; you can also help them register if needed. Once it takes effect after about a month, they should notice that telemarketing calls will stop; those that still get through will likely be scams, so they can be ignored. However, calls for charity solicitations and political fundraising might still keep coming.

Never Make Payments To Collect Money

This is one of the most common scams that happen over the phone; a person calls to inform a victim that they have just won the lottery or sweepstakes and that a huge amount of money is waiting for them. However, there’s always a catch — they have to pay a transfer fee or service fee first to get started with the claim process. It will help to remind your parents that legitimate prizes will usually be announced through the mail and that there should be no required payments.

Tell Them To Just Put the Phone Down

Because seniors are usually naturally courteous, they may be reluctant to end their phone calls abruptly. A great solution to this is to practice role-playing with them to illustrate how callers may speak and how they might try intimidation to collect money. Be sure to give them the feedback and coaching they need to end the call before they are subjected to a scam, even if they need to end the call mid-sentence.

Other Steps They Can Take

Here are other things you can do to help your parents avoid financial scams:

• You can check their credit reports via AnnualCreditReport.com to make sure that there are no fraudulent accounts open under their names.

• You can put their address on opt-out lists such as the Direct Marketing Association. In this way, legitimate vendors won’t be able to send junk mail, and your parents will know that anything still able to make its way to their doorstep is likely from fraudsters. They will then be able to report the package or mail it to the U.S. Postal Inspection Service.

• If by chance they become victims of fraud, AARP is the best place to get help. You can call the AARP Fraud Watch Network Helpline at (877) 908-3360, where you can expect a reply in the next 48 hours.

Conclusion

To ensure that our parents and other aging loved ones stay safe from scammers, helping them develop a sense of awareness and vigilance will go a long way. Providing them with a bit of education about what to look out for and informing them of red flags they may encounter will prevent the loss of their identity and retirement funds. Make sure that they know you’re just a phone call away if they’re unsure of a caller or institution’s credibility.

By putting the following tips to work, you’ll be able to rest easy knowing that your parents will know what to do, even if you’re not always with them.