Protecting A Loved One From Financial Scams

Older adults often become targets of scams that seek to exploit their savings and assets. Financial fraud aimed especially at older adults is a growing problem, but awareness and vigilance can keep people of all ages from falling victim to these schemes. 

Why are older adults common targets of financial scams? First, they are often sitting on a well-funded nest egg—and fraudsters know it. Second, older generations are typically more trusting and polite. They are less likely to hang up on a scammer. The older generations grew up in a time when the phone was a trusted form of communication. They are more likely to listen longer to a stranger’s call, giving the scammer enough time to hook them into their scheme. And unfortunately, falling for a telephone scam can itself be a warning sign for cognitive decline. A person with Alzheimer’s or other dementia might not be able to drive or work, but they can easily answer a phone call.

Falling victim to financial fraud after retirement can be devastating for older adults, explains Right at Home franchisee Jim Gall. “It impacts everything that they have lived and saved for over decades,” he says. And it can change the trajectory of their final years, preventing them from taking long-planned vacations or robbing them of the ability to leave the legacy they’d imagined for future generations.

Here are some of the ways scammers try to grift older people from their savings.

Social Security impersonation: Scammers posing as government officials call seniors claiming there are issues with their benefits. They request personal information, including Social Security numbers, bank details, or payment to resolve the alleged problems.

Medicare scams: Fraudsters offer fake services or products, claiming they are affiliated with Medicare. Seniors are asked to provide their Medicare numbers, leading to identity theft and unauthorized billing.

Grandparent scams: Grandparents receive calls from someone pretending to be a grandchild in distress, often claiming they need money urgently for an emergency. These scammers prey on grandparents' love for their family. These criminals often open with “I’m in trouble, Grandma” to try and get an older adult to respond with the name of a grandchild, such as “Is that you, Katie?”

How can we help keep our older loved ones from falling for an act of financial abuse? The key, say advocates for older adults, is awareness. Make sure your loved one is familiar with the ways that these scams work, and give them the following tips for safer telephone communications.

Be skeptical of unsolicited communication: Whether it's a phone call, email, or letter, be cautious when you receive unsolicited requests for personal or financial information. Legitimate organizations won't contact you this way. Remind them that the IRS and Social Security Administration, among other government agencies, do not communicate with people via telephone.

Verify identity: If someone claims to be from a government agency or a company, ask for their name, department, and contact information. Disconnect and independently verify their identity before providing any information.

Jim advises that any legitimate charity would be fine contacting you via mail for a donation. And furthermore, plan for your charitable giving. “If you have the ability, set a budget for donations and stick with well-known local or national charities,” says Jim.

Don't share personal information: Never share sensitive personal or financial details like Social Security numbers, Medicare numbers, bank account information, or credit card numbers unless you've initiated the contact and trust the recipient. Consider changing your standard greeting from “this is Mary” to the more anonymous “hello.”

Nothing is as good as preventing the fraud in the first place, and that includes estate planning. “It’s so important to have that done ahead of time, so everyone involved knows what kind of help you have lined up so those entities can step in for you,” says Jim.

Jim recalls when his mother wanted to make a small change to her will. However, upon review, there were whole sections that were out of date or irrelevant to current Michigan state law. “Getting a plan in place early is great, but it’s equally important to review it regularly with a specialist,” Jim advises.

Financial scams targeting older adults are both widespread and devastating. By staying informed, vigilant, and cautious, seniors can protect themselves from falling victim to these schemes. Additionally, fostering open communication with trusted family members and seeking advice from financial professionals can provide an extra layer of protection in preserving one's hard-earned assets and financial security in retirement.