How to Spot a Scam
Russell W. Hall, CFP®
Scams that target seniors have always been extremely common, but it feels like they have intensified - or at least mutated - over the last several years as technology changes our lives. However, despite the many types, scams can really all be boiled down to one of four key elements. Knowing those elements can help you or those you love as you look for red flags or areas of concern to make sure you’re not being scammed.
1. Unsolicited Contact
This could cover phone calls, emails, texts, or any other method of communication that you or your loved one were not expecting to receive. It’s sometimes contact from a stranger, often purportedly from a trusted source like Social Security, the police, or the IRS. But it could also be contact from friend or family member (or someone pretending to be one), or unfortunately a caregiver in certain situations.
2. Offering Something Valuable
Scams are designed to appeal to you by offering a valuable resource or solution. The classic scams revolve around money, like get rich quick schemes, lottery or inheritance. But it could also be solving a “problem” - the phone call supposedly from your bank, notifying you that they had to lock down your debit card because someone tried to use it. You just need to confirm a few pieces of information to confirm your identity, like your date of birth and Social Security number, and they can unlock it for you.
3. Request for Information
Scammers are usually looking to acquire personal or financial information that they can exploit. As mentioned in the previous example, this information could be something obvious like your Social Security number. But it could also be more subtle – a call from the “CDC” supposedly doing “Covid tracking” – finding out who you have been in contact with recently, and asking you to provide their personal information also. Or it could be someone looking to begin a romantic relationship, who doesn’t seem to ask for anything at first.
4. Pressure to Act Quickly
Limited time offer! You must act now or your account will be shut down, or you will stop receiving Social Security. Your grandchild is in jail and needs bail money right away. They want you to do something without really thinking it through.
So what can you or your loved ones do, to avoid being a victim of these scams?
Question the offer! Use critical thinking, and run it by someone you trust. Does it seem too good to be true?
Think twice before taking action. As we said previously, there’s usually pressure to act quickly, and scammers will move on if it’s taking too long to convince you.
Sometimes seniors allow scams into their lives for other reasons that might be avoidable. Loneliness can be very hard, and there have been cases of seniors who knew they were being tricked by a supposedly romantic interest, but were just happy to have someone talking to them every single day.
Prevention, prevention, prevention! Knowing how your loved ones could be scammed and keeping an eye out is invaluable. In caregiver situations, watch out for red flags like a new friend or love interest, increase in phone or computer use, missing jewelry, secretive behavior, or unusual purchases.
As financial advisors, we often serve as a sounding board for our clients and have helped them avoid many scams. If you’re interested in knowing more, schedule a 15-minute discovery call with a fee-only financial advisor.
We are grateful to Kelli Morris at Council on Aging - Southern California for her presentation that we used to help write this article.