Unfortunately, Greystone Financial Group has heard from several clients that they have been tricked by sophisticated scam artists. Financial scams targeting senior citizens are an increasing concern, affecting millions of older adults each year. With an aging population and a growing dependence on technology, seniors are at greater risk of falling victim to sophisticated and malicious schemes. The Federal Bureau of Investigation (FBI) has identified several common scams and offers essential recommendations for recognizing and avoiding these fraudulent activities.

Seniors are targeted for several reasons.  Often seniors have more accumulated savings that makes an attractive target.  Also, seniors living alone or who are otherwise socially isolated can be susceptible to trusting a stranger.  Scam artists are also looking for an individual suffering from cognitive decline.  Finally, with technology changing so quickly, the scammers are trying to play on a person’s lack of technical knowledge.

Understanding Financial Scams Against Seniors

There are several types of scams being perpetrated against seniors and younger people alike.  Below is a list of some of the most reported scams:

    1. Telemarketing and Phone Scams
      • Grandparent Scam: A caller poses as a grandchild in distress, claiming to need money for an emergency situation. The scammer often asks the senior not to tell anyone else.
      • Lottery and Sweepstakes Scams: Seniors are told they have won a lottery or sweepstakes but must pay taxes or fees upfront to claim the prize. These prizes are, of course, nonexistent.
      • Charity Scams: Scammers solicit donations for fake charities, especially after natural disasters or during holidays, exploiting the generosity of seniors.
    2. Internet and Email Scams
      • Phishing: Fraudulent emails or websites trick seniors into providing personal information such as social security numbers, bank account details, or passwords.
      • Tech Support Scams: Seniors receive calls or pop-up messages claiming their computer is infected. The scammer then offers to fix the issue for a fee or gains remote access to steal personal information.
    3. Investment and Financial Fraud
      • Ponzi and Pyramid Schemes: These schemes promise high returns with little risk but rely on recruiting new investors to pay earlier investors. Eventually, the scheme collapses, and the last investors lose their money.
      • Advance Fee Schemes: Scammers promise victims a substantial reward in return for an upfront payment, which is never returned.
    4. Health Care and Prescription Drug Scams
      • Medicare Fraud: Scammers pose as Medicare representatives to get seniors to provide personal information or offer bogus services at makeshift clinics.
      • Prescription Drug Scams: Seniors are sold counterfeit or non-existent drugs online, risking their health and finances.
    5. Home Repair and Contractor Scams
      • Door-to-Door Scams: Fraudulent contractors offer services at a low price, require payment upfront, and either perform shoddy work or disappear without completing the job.
    6. Phony Google Search Numbers
      • A scam call center places phony ads on search engines enticing an unsuspecting caller to send money to an illegitimate business.
    7. Romance Scams
      • Scammers create fake accounts on dating websites marketed to seniors, then work to build trust with unsuspecting victims. After several weeks or months of regular online communication they ask for money to help them out of an emergency.  Once the money has been sent, the scammer disappears.

FBI Recommendations for Avoiding Scams

The FBI provides several recommendations for seniors and their families to help recognize and avoid financial scams:

General Advice

      1. Be Skeptical of Unsolicited Offers
        • If you receive an unsolicited phone call, email, or message, be cautious. Scammers often reach out without any prior contact.
      2. Verify the Source
        • Always verify the identity of the person contacting you. Call the organization directly using a phone number you know is legitimate.
      3. Don’t Share Personal Information
        • Never give out personal or financial information over the phone, email, or internet unless you initiated the contact and know it is a reputable source.
      4. Avoid sending gift cards to anyone not known to you.  Often scammers will ask you to buy gift cards and give them the numbers on the back.
      5. A legitimate service will not need you to stay on the phone with you while you go to the bank to make a withdrawal.

Additional Tips

      1. Monitor Financial Statements
        • Regularly review bank and credit card statements for unauthorized transactions.
      2. Shred Personal Documents
        • Shred documents containing personal information before disposing of them.
      3. Use Strong Passwords
        • Use strong, unique passwords for online accounts and change them regularly.
      4. Stay Educated
        • Stay informed about the latest scams by following news reports and resources like the FBI and Federal Trade Commission (FTC).

Real-life Examples of Scams

Understanding real-life examples can further illustrate the severity and prevalence of these scams:

      1. The Case of the Fake IRS Agent
        • A senior received a call from someone claiming to be an IRS agent, threatening arrest unless a payment was made immediately. The senior was instructed to purchase gift cards and provide the card numbers to the caller. Fortunately, the senior’s family intervened before any money was lost.
      2. The Deceptive Contractor
        • An elderly homeowner hired a contractor who knocked on the door offering to repair the roof at a discounted rate. The contractor requested a large upfront payment and then disappeared without completing the work.
      3. The Bogus Online Pharmacy
        • A senior, looking to save money, ordered medication from an online pharmacy that offered significantly lower prices. The drugs received were counterfeit, putting the senior’s health at risk.

Conclusion

Financial scams targeting senior citizens are a pervasive and pernicious problem. These scams exploit the trust, isolation, and accumulated wealth of seniors, leading to significant financial and emotional harm. The FBI’s recommendations provide a robust framework for recognizing and avoiding these fraudulent schemes. By staying vigilant, educating oneself and others, and following best practices for protecting personal information, seniors can significantly reduce the risk of falling victim to these scams. Remember, if an offer seems too good to be true, it probably is. Protect yourself and your loved ones by remaining cautious and informed.


Eric Babcock
Director

Disclosures:
This is provided for informational purposes only and should not be interpreted in any way as investment, tax, accounting, legal or regulatory advice. An investor must take into consideration his/her individual circumstances.

There is no guarantee investment strategies will be successful. Investing involves risks including possible loss of principal. There is always the risk that an investor may lose money. A long-term investment approach cannot guarantee a profit.  All expressions of opinion are subject to change. This article is distributed for educational purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, products, or services. Investors should talk to their wealth advisor prior to making any investment decision.