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’s been even more of a problem since the pandemic, explains Right at Home franchisee Paul Blom. “There was so much isolation, so people were more likely to answer a call just to talk to somebody.”

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?”

Paul has unfortunately had a client experience the grandparent scam. “When she described the call, she was super emotional about it,” Paul explained. “But she was smart to question if her grandkid was actually in the town the caller mentioned.” While the client was able to recognize the scam before losing any money, she was deeply affected by the experience.
“There’s a significant emotional aspect,” Paul says. “Their sense of safety and security is shattered.”

Another of Paul’s clients got a call from the “European lottery,” and was told she needed to send $10,000 to claim her prize. Thankfully she was suspicious enough to refuse, and Paul helped her report it. Those reports, through entities like the Better Business Bureau or a state attorney general’s office, help alert other people to scammers. Becoming familiar with online “scam trackers” could help you or a loved one avoid financial fraud.

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.

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.” Paul advises single female clients living alone to change their voicemail to a generic male voice that offers no identifying details.

Financial scams targeting older adults are both widespread and devastating. “Having caregivers helps,” explains Paul. “Clients will tell caregivers things they don’t want to admit to their children, like experiencing a fall or falling for a scam.”

But the best protection is prevention. Paul makes sure that all new clients are asked about financial power of attorney and encourages family members to have that conversation before someone is incapacitated and unable to make sound financial decisions. An elder law attorney or geriatric care manager can help families put financial guardrails in place to help protect an older adult’s nest egg. And if you suspect you or a loved one have been taken advantage of, Minnesota Elder Justice Center can help.

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.