After working for decades to build a comfortable retirement plan, the last thing you want to do is lose your savings to scammers. Cons have been an unfortunate fact of life since the dawn of civilization, and as technology has evolved, so too has the complexity of financial scams.
Seniors, in particular, are a preferred target for scammers. They tend to have more wealth than younger targets, share a broad set of interests and concerns on which to prey, and can be easier to confuse with technical jargon and fast-talking. To protect your own retirement savings, and perhaps your elderly parents, be aware of common scams and how to avoid them
What Are Common Signs of Financial Scams?
Scammers are always looking for new angles to use, and current events are a frequent basis for their schemes. New scams have already popped up in the wake of coronavirus—one involves stealing banking info by claiming to help you collect your COVID-19 stimulus check. And there’s already been talk of vaccine-related phishing scams aimed at seniors. Don’t let your loved ones fall for this!
Another popular trick is to pose as a grandchild in need of financial assistance, whether to post bail, get medical care, or pay for necessary travel.
While the details of scams change over time, there are common themes and signs to be aware of:
- Scammers will usually contact you out of the blue, whether it be a phone call, email, or even showing up at your door
- Pretending to represent a government agency or company you have an account with is a favored tactic
- They’ll request money via less common means of payment, such as gift cards or wire transfers
- Scammers will pressure you to move quickly, sometimes with the threat of harm coming to yourself or loved ones if you don’t act immediately
- Offers that seem too good to be true usually are
Financial fraud costs seniors billions of dollars every year. By following a handful of tips and maintaining a healthy dose of skepticism, you can prevent yourself from being swindled.
Be Wary of Unsolicited Calls
Telemarketing is more prevalent than ever. While many legitimate businesses use it to drive sales, it’s also a popular avenue for scams. It’s best to approach any unsolicited call with caution, but it’s essential in matters of finance or health. Scammers will often pose as a bank or organization you have a relationship with. However, there are a few ways to ensure you’re talking to a real representative of that company.
First, ask why they’re calling. If the answer is unclear, missing any details, or doesn’t sound familiar, it’s very likely an attempt to deceive you. Vague explanations build just enough trust for you to start filling in the blanks while the scammer slowly earns your trust.
Second, ask if you can call them back. Any legitimate bank, health care organization or service provider will be happy to have you call them back at the number listed on your credit card, account statement, or their official website. If they ask you to call them back on a specific number, rather than the company’s official listed phone number, there’s a good chance it’s fraudulent.
Lastly, don’t hesitate to end a conversation if you’re uncomfortable. Scammers prey upon the victims by wearing them down throughout a conversation. Any time you have an uneasy feeling, politely but firmly end the call. And, if you have to, just hang up.
Protect Your Personal Information
Some scams directly steal money from victims, while others prey on your personal information. You should always be careful giving out personal details such as your:
- Social security number
- Bank account number
- Passwords and pins
Less obvious information, such as your mother’s maiden name or the name of your first school, can be just as valuable.
One particularly common scheme targeting retirees is a form of Medicare fraud. Scammers will pose as a Medicare representative and ask you for a variety of personal data, then use it for nefarious purposes such as identity theft. Keep in mind, Medicare will never contact you for your Medicare Number or other personal information unless you’ve given them permission in advance. If someone does, it’s a clear sign of fraud and you should end the conversation.
Exercise Caution Online
As more business has moved online over the years, internet-based fraud has grown more sophisticated. Email spam can be hard to discern from legitimate communication, and people can create fake websites that might fool some folks.
The best way to protect yourself online is never to follow links from random emails that look even remotely suspicious. When you need to pay a bill or make changes to your account, go to the company’s official website. If you doubt whether you’re using the correct website, call the company and talk to a customer service representative.
Don’t Make Hasty Decisions
Most cons work by hooking victims quickly with a good story. The scammer will present some deal that sounds amazing “but only if you take advantage of it today!” If a random caller is pressuring you to agree to a deal without time to think, say no. Given time and space to sit down and work through the details, you’ll often be able to spot flaws in the story. Any legitimate company will respect that you need time to think before coming to an agreement.
Consult a Trusted Financial Professional
As a final line of defense against scammers, never hesitate to consult your trusted financial advisor before agreeing to a deal. Not only do they have a comprehensive understanding of your financial situation, but they’re familiar with common scams that target older investors.
Fiduciary advisors can be particularly helpful in this realm, as they’re legally obligated to act with your best interest in mind at all times. Rather than weighing whether there’s a commission to make, their only goal is to protect your investments. If you have a question about a potential scam, they can help you assess the situation and ensure that you’re protecting yourself and your investments.
Want to avoid conflicts of interest with a fiduciary financial advisor? Learn how to identify fiduciary advisors with this special guide.