Broker Check
Elder Fraud—Mounting Your Best Defense

Elder Fraud—Mounting Your Best Defense

September 05, 2023

A year ago, Eden and Mark (last name withheld) lost their life savings to a scammer.

“We lost all the money we made in our business. All of the monies we saved together for 38 years we’ve been married, and it was all taken from us,” Eden told California news broadcasters.

It’s heartbreaking and frightening, but what happened? Eden received a pop-up notice on her PC about a virus and was told to call “Microsoft.” When she called the number, she was told that there was a “terrible problem” on her computer.

The man on the phone, who was not associated with Microsoft, told her the problem was connected to identity theft, and that she needed to transfer her money to safe government accounts in Hong Kong.

With the assistance of other scammers, she complied, making five wire transfers to the criminals to the tune of $564,000.

Critiquing situations after they have occurred can be tempting, but scammers have a talent for appearing genuine, trustworthy and convincing. They may make you feel like they genuinely care about your well-being.

Be on guard

There is no shortage of tricks that scammers will use to deceive the elderly. Some will use deceitful emails and texts that encourage you to redirect to their fraudulent websites. Others may impersonate loved ones, requesting financial assistance.

These fraudulent activities are becoming increasingly sophisticated and diverse. But the results are often the same. Seniors get bilked out of their savings.

According to the latest data, total losses reported to the FBI’s Internet Crime Complaint Center (IC3) increased a whopping 84% in 2022 to $3.1 billion.

This may be just the tip of the iceberg. Some may be unaware of the scam, and others may be too ashamed to report the theft.

Tech and customer support schemes continued to be the most common type of fraud reported, while monetary losses due to investment fraud jumped 300%, largely due to the rising trend of crypto investment scams.

For example, tech and customer support scammers, which primarily originate in South Asia, take advantage of their victims’ unfamiliarity with technology and online banking to quickly take as much money as possible.

Some may be as simple as a call from “tech support” informing you that your computer has a virus.

You don’t. This is a scam. No one will call you to inform you of an infected PC.

They will claim to remove it for a fee, but they will also snoop around for relevant financial information, and you may unwittingly download malware that helps them track your every move.

Or, a pop-up message or blank screen on a computer tells the victim their device is damaged and needs fixing. A phone number to reach ‘tech support’ (actually the scammer) is provided—this is what happened to Eden in the opening story.

Remember this: tech support won’t call you to tell you there are issues with your computer. If you get such a call, hang up. Ignore pop-up numbers. Just turn off your PC and turn it back on.

A small dose of prevention goes a long way

It’s a difficult reality, but as we age, our cognitive abilities may decline, making ourselves or our loved ones more susceptible to fraudulent activities.

But there are steps we can take to fight back.

1. Designate a trusted contact. This person has no authority over your accounts but is someone your financial institution may contact to discuss issues if they suspect something is awry.

2. Be leery of unknown phone numbers. Signing up for the National Do Not Call Registry will reduce telemarking calls, but this does nothing to stop scammers. If you don’t recognize the number, be leery about who may be on the other line.

For example, why are you receiving a call from a toll-free number? Let it go to voicemail. Many are robocalls and don’t leave a message.

Did the call come from a recognized firm you conduct business with? It may or may not be legitimate. It’s OK to call the company back using a phone number that you know is legit.

3. Freeze your credit report with the three major credit rating agencies at no cost. This helps prevent accounts from being opened in your name without your knowledge. When the need arises, you may temporarily remove the freeze.

[Provide the following if you feel it is appropriate.]

Here are the three major credit agencies and a quick and easy way to contact them to freeze your credit report.

Understand their methods

The following are some of the primary scams being used now to defraud elders. Beware!

1. Investment scams promise quick riches and pressure the elderly into accessing their retirement accounts, the equity in their home or convince them to go into debt.

2. The lottery/sweepstakes/inheritance scam falsely notifies individuals that they have won a cash prize or will receive an unexpected inheritance from a distant and previously unknown relative.

3. There has been an increase in romance scams, which can be particularly challenging to identify, as the perpetrator creates a false online persona to gain the trust and affection of the victim.

These scammers could be called the “Houdinis of con artists” as they are very believable, genuine and caring. Once scammers earn your trust (and your heart), they start requesting money and won’t stop taking advantage of you until you cease sending them funds.

You might think that this sounds implausible. Why would anyone send cash to someone they haven’t met and one that probably lives in another state?

Well, love clouds judgment, and the elderly are especially ripe for abuse if they are lonely and their judgment isn’t as sharp as it once was. Besides, older folks are not the only ones whom romance scammers have conned.

4. Scammers call unsuspecting older adults and pretend to be from the IRS, Social Security or Medicare. These organizations never make unsolicited phone calls. Hang up the phone.
Be aware of the grandparent scam. You may get a call that goes like this. “Hi, Grandma. Do you know who this is?” When the unaware grandparent guesses the name of the grandchild the scammer most sounds like, the scammer secures their trust.

The fake grandchild then asks for money to solve some urgent financial problems (such as overdue rent, car repairs or jail bonds).

As you can see, there is plenty to be aware of. And these are just some of the more prevalent scams that are used to prey on the elderly.

We go to great lengths to secure your assets.

It’s important to stay vigilant, as scams can come from various sources. Stay alert and on guard.

If the request looks out of the ordinary, that should be a red flag. It may turn out to be legitimate. But if not, caution and an ounce of prevention are worth their weight in gold.