How to Guard Against Scams and Fraud

Scammers love to target older adults. Sure, they’ll go after people of all ages. However, con artists often prey on older adults because they assume that seniors are sitting on a pile of retirement cash – cash that they hope to steal. Researchers estimate that losses to older adults from financial exploitation range from $2.9 billion to $36.6 billion a year.

To avoid becoming a part of those statistics, you can reduce your risk by taking the following steps.

Be aware of scam red flags

Scammers are always coming up with new ways to get people to part with their money. Certainly, using resources such as AARP’s Fraud Watch Network can help you stay on top of the latest ploys. But one of the best defenses against scams is to be aware of their red flags. Be on the lookout for these telltale signs. 

• Requests to wire money: A call or email from someone asking you to wire money to claim a prize, make a purchase, or pay a fee for a work opportunity is usually a scam. Also be wary of requests for payments with a prepaid reloadable card.
• Calls from government agencies: Government agencies such as the IRS, Medicare and Social Security Administration will not call or email you. These agencies communicate by mail and will only contact you by phone if you call them first. They never ask for payments to be made by wiring money.
• Unsolicited calls:  Be wary of calls from groups you’ve never had contact with that are asking for your personal information. If you are worried that it might be a legitimate request for information, hang up then look up the number for the office or organization that supposedly was calling and call it directly to see if it was trying to contact you.
• Emergency calls from the grandkids: A call from someone claiming to be a grandchild in desperate need of cash fast could be a scam. Telltale signs include a plea to wire money. Ask the caller questions that only your grandchild could answer, or call your grandchild directly. 
• Limited-time offers: Emails, text messages, and phone calls from people offering a chance to get in on a money-making opportunity or investment for a limited time only are scams. 
• High-return investments with no risks: A pitch for an investment that offers high returns with no risk is a scam. All investments have some level of risk. 
• Free lunches: Offers in the mail to attend free lunch or free dinner investment seminars typically are sales pitches for high-fee, unsuitable or even fraudulent investments. Do not to go to these events.

Avoid spam calls

One of the most common ways scammers reach older adults is through phone calls. You can reduce your risk of becoming victims or telemarketing scams by using this three-prong approach.

Get on the National Do Not Call Registry

‍Opt out of unwanted sales calls by registering your home and mobile numbers on the Federal Trade Commission’s National Do Not Call Registry. This only prevents legitimate telemarketers from calling. However, you'll know that any sales pitch call you continue to get is likely for bogus products and services. 

Block spam calls

Reduce the number of spam calls you get by downloading a call-blocking app for your wireless phone. Major wireless carriers such as AT&T and Verizon offer their own apps with free and paid versions. There also are third-party call-blocking apps such as Hiya and Nomorobo.

‍Have a refusal script

‍The best way to avoid scam calls is to hang up on them—or not even answer. But if you consider it rude not to answer or hang up, come up with a sentence you can use to end a call without appearing impolite. For example, you could say, “I can’t talk now because I’m busy making dinner,” if you get a call that is questionable.  

Cut down on junk mail

Reduce solicitations by registering at DMAchoice.org to opt out of direct mail. It won’t stop the flow of marketing mail – just that from members of the Direct Marketing Association. However, this means that any solicitations you continue to receive in the mail might be questionable.

Also, watch out for junk email. Don't click on links or attachments in emails from people or organizations you don't know. Even if the email appears to come from a company you've done business with, such as your bank, don't click on any links. Call the company directly using the number on your statement or the company's website to see if there are any issues you need to resolve.

Monitor your financial accounts

You might become a victim of fraud and not even know it. That’s why it’s important to monitor your financial accounts for signs of fraud. 

Set up online access – with strong passwords – for all of your financial accounts if you haven’t already. This will make it easier to check your accounts regularly online for suspicious activity rather than wait for a monthly account statement to arrive. Set up alerts on your bank and credit card accounts to be notified by email or text message of activity on your accounts. You can also sign up for Carefull to speed up that process and get alerts for all of your accounts in one place. These alerts will help you identify fraudulent use of their debit and credit cards immediately if you see that there are transactions that you haven’t made.

Also, create a my Social Security account at SSA.gov to keep tabs on your benefits. This will prevent thieves from setting up my Social Security accounts in your name and changing bank routing numbers for deposits. 

Finally, check your credit reports to see if there are any accounts you don’t recognize, which could be a sign that your identity wasstolen to open lines of credit. You can get free copies of your credit reports from AnnualCreditReport.com.

If you find suspicious accounts,  contact the fraud departments at the three credit bureaus – Experian, Equifax and Trans Union. Numbers for the credit bureaus should be listed on your credit reports. 

Avoid investment fraud 

Unfortunately, there are plenty of so-called professionals who might offer to help  invest or manage your retirement accounts but will end up exploiting you.  Check the background of financial professionals with the Financial Industry Regulatory Authority’s BrokerCheck. Ask financial professionals questions such as what licenses they hold, whether any disciplinary actions have been taken against them, how they get paid and whether they can provide references. If the professionals can’t provide clear answers, that should raise a red flag. 

Also be wary of investments that are touted as having guaranteed high returns with no risk, that the professional can’t clearly explain or that don’t have documentation that can be reviewed for more information. The Securities and Exchange Commission provides detailed information about investments that are marketed to seniors and how to avoid fraud at Investor.gov.

[Read: How to Hire a Financial Advisor]

Watch out for exploitation by family members

Unfortunately, those who try to scam you might not be strangers – they might be family, friends or caregivers.

One step you can take to protect yourself is to name a power of attorney. That person will have the legal right to make financial decisions and transactions for you if you aren't able to yourself. It’s important tohave a power of attorney document drafted while you are mentally competent so it will be valid and so you can choose someone you trust. If you don’t name a power of attorney, you might be pressured later in life if you experience cognitive decline to name someone who isn’t trustworthy and who wants to take advantage of you.

Most importantly, if you think you are being exploited, don't be afraid to reach out for help. Contact trusted family members or financial and legal professionals you work with or local law enforcement.

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