Many families will gather this week for Thanksgiving – and if there are seniors at the table, many experts recommend that families bring up financial scams as a topic of conversation.
Popular scams include the “grandparent scam”, or a phone call that offers seniors fake lottery winnings. From the Arizona Republic:
“Seniors often are more vulnerable because they’re generally friendly and happy to talk to people,” said Adam Levin, founder and chairman of IDT911, a Scottsdale firm that provides identity-theft management services. Those chats might be initiated by crooks.
Many seniors also have money, which can make them a target. Many have paid-off homes and ample investment portfolios and receive regular cash flow from Social Security and pension benefits.
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Seniors are often targeted for certain types of investment pitches, including some outright scams. Levin refers to one as the “grandparent scam,” in which a crook calls a grandparent claiming that a grandchild or other relative has been stranded in a foreign country or injured in an auto accident. The pitch includes an appeal for money that needs to be sent quickly via a wire transfer.
Another common scam often targeted to the elderly involves false lottery winnings. According to Levin, telephone solicitors tell the potential victim that they have won a big prize but just need to buy magazines or make some other purchases to qualify, with a usual requirement that the money be sent via wire transfer.
Scam artists are getting more sophisticated, which makes it increasingly difficult to tell legitimate inquiries from potential swindles. For example, a crook might already be in possession of your credit-card number and its expiration date. Armed with this information, a crook might trick you into revealing the three-digit security code that he or she needs to complete a purchase, usually under the guise of verifying your identity, Levin said. Or a swindler might already have all your credit-card information and use it to seek out more, such as your Social Security number.
What advice can you give to seniors to help prevent them from becoming victims of these scams? The experts at the Arizona Republic have some tips:
One key lesson is to be wary of any unsolicited request for information, especially over the phone or through an e-mail message. Also, you should question requests for information that presumably come from your bank, credit-card company or other financial firm. The caller could be an impostor. Any legitimate business that you already deal with should have all the information they need. If in doubt, hang up and call the company back on a telephone number that you find on your own.
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As another general caution, Finra advises everyone to be careful about attending investment seminars offering free meals, often held at swank restaurants. The potential dangers range from being subjected to a hard sales pitch for an unsuitable product to an appeal for personal information that can be used by ID thieves. Yet free-lunch seminars are common. A 2013 Finra survey found that 64 percent of respondents age 40 and up reported having been invited to one.
- Stay involved. Crooks are less likely to succeed or even target someone if they know a family member is vigilant. If you trust the neighbors, ask them to keep an eye open. Encourage your parents to call you before buying a big-ticket item, signing any loan documents or making new investments.
- Conduct a regular home audit. Make sure important financial documents are safely locked away and computers have adequate safeguards in place.
- Monitor caregivers. Let them know you’re watching, and try to do a criminal background check on anyone who has direct access to elderly individuals or their homes.
- Offer to help handle financial transactions and account management. If appropriate, check your parents’ incoming mail for suspicious offers and monitor their bank, credit-card and investment statements. Close accounts that aren’t regularly used.
Photo Credit: Satya Murthy via Flickr Creative Commons License
