Live Wisely - July 31, 2019
By Kristine Jepsen
Americans age 50 and up hold 83% of the country’s wealth. Scammers know this. Financial scams targeting this group are on the rise, stripping victims of more than $36 billion per year. Investor Protection Trust reports that one in five people age 65 and older has already been affected. Threats range from “imposter” scams, in which fraudsters pretend to be trusted contacts or acquaintances, to phony business opportunities, false IRS tax delinquency and malicious “tech support” messages.
Biological, social and legal factors conspire to make seniors vulnerable to financial fraud, according to Marketplace.org. Additionally, neurological research has suggested that even aging adults who are otherwise healthy and independent have less capacity than younger people to distinguish between trustworthy and dishonest individuals.
Social isolation can also contribute to increased vulnerability. Case studies by Adult Protective Services show that without the more consistent company of trusted family and friends, older adults can be more easily emotionally manipulated, feeling a “genuine” connection to scammers.
Finally, banks don’t designate emergency contacts, as airlines do, to notify when fraud is suspected in a senior patron’s account. By the time targets get help, it may be too late. Unfortunately, most money lost to scams is never recovered.
The most-reported –and most costly — form of financial fraud is imposter scams. Impersonators masquerade as distant family members, romantic interests, service providers or government representatives in their efforts to extort their targets, soliciting money or personal financial information. In 2018, more than 37,000 people lost a total of $34 million to imposter scams.
With more adults adopting increasingly complex technology, deceptors routinely pose as “tech support” professionals, calling victims to fix fictitious computer issues. These scammers convince people to give them remote access, or control, of a personal computer via the Internet, subsequently scanning the device for saved passwords, credit card numbers and bank account information. Some go as far as to install malware, or malicious software, to continuously collect and transfer this sensitive information.
Another protective measure is to employ the use of a password manager to scramble scammers’ access to any credentials stored on your computer. Password managers create and save unique passwords in one place, accessed with a singular, strong master password. Be sure not to store the master on your device.
Sweepstakes, Lottery and Prize Scams
These types of shakedowns prey on the excitement that comes with winning. They indicate that you’ve been selected to collect a prize, often a lump sum of cash or a new car, all you need to do is to simply pay the “processing fee”. When the payout inevitably fails to appear, they demand further payment, then more. They may make contact by email, phone or even fax.
These phony work-from-home and pyramid-earning schemes promise high returns for low investment. In 2018, the average victim of this scam type lost more than $6,000. If a company requires any type of payment or financial information from you in exchange for the promise of a job, it is probable the work of a scam artist.
When you or a trusted advisor suspects financial foul play, help protect future victims by doing the following:
In your day-to-day life, small steps can be taken to help reduce your risk. Remaining connected to trustworthy friends and family who can help detect fishy behavior, as well as staying on top of scamming trends, can make all the difference. After all, pennies saved should stay where they’ve been earned.
Kristine Jepsen is a writer and editor for literary journals online and in print, as well as a professional business counselor, Pilates and Oula! dance instructor, grant-writer, and brand content developer. Her work with Goodwin House at Home centers on health and wellness along the aging continuum, covering topics as diverse as dating apps and financial scams. She lives on a farm in the Midwest with her horse-loving tween daughter and many four-legged friends, large and small.