Protecting A Loved One From Financial Scams

As older adults navigate the financial landscape in their golden years, they 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.

“It can be a hard conversation for family to have,” says Right at Home franchisee Sandra Heintz. “But don’t ignore those early signs. Have an open conversation so that you can help when the time comes,” she advises.

“A person doesn’t start showing signs all at once, so recognize that cognitive decline is not a normal part of aging. It’s okay to talk about that and suggest putting up some financial guardrails.”

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?”

Grandparent scams are so insidious because they prey on the immediate, protective emotions felt by older adults. Make sure your relatives have the correct contact information about the grandkids, and explain why they should verify any communication outside that.

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.

Sandi advises her clients and their family members to familiarize themselves with the latest scams, and talk about how potential scammers prey on their emotions. You can read about scams targeting your local area through the Harris County Better Business Bureau.

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.

“Think about what they are asking you for,” says Sandra. “If it is gift cards or cryptocurrency that’s a big red flag. Once that money is gone you are unlikely to get it back.”

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.

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.”

Most of all, Sandra advises her clients to have a plan in place in case they become incapacitated. “Put some controls on what things that be changed,” she says. Instead of a $10,000 credit limit, make it $2,000 to limit the potential damage. Make sure your loved one has some credit reporting or has named a financial power of attorney to keep an eye on things.

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.