One of the unfortunate realities of being a family caregiver is dealing with elderly scams, which usually involves financial fraud. Not only are these scams common, they’re also costly: The FBI estimates seniors lose more than $3 billion a year to financial scams targeted at the elderly. Keeping financial information safe is a necessary part of helping your loved ones keep their money safe.
What is financial fraud?
Financial fraud can be anything from a minor annoyance to a devastating, life-altering event, explained Amy Fontinelle for Investopedia:
“The fraud can involve the use of deceptive, unfair, misleading, or false business practices,” she said. “Fraudsters typically target senior citizens and college students, but all consumers are at risk of fraud.”
Identity theft is one of the most common financial frauds. Scammers use personal information to assume an identity, which they then use to access accounts, open credit cards, take out loans, make purchases, and more. Credit and debit card fraud and mortgage fraud are also common.
Phone-based frauds are particularly concerning. The elderly are particularly vulnerable to these types of scams, as they often sound legitimate and can be intimidating and even threatening. Seniors who are used to conducting business over the phone – and who may have declining mental health or cognitive impairment (estimated at 40% of the senior population) – can be deceived by the official manner of these scammers.
The most common elderly scams
- Government imposters: Callers pretend to be on official business from a government entity such as the IRS or Social Security Administration in order to gain personal information. They’re often very threatening.
- Grandparent scam: Callers trick seniors into thinking they are a grandchild or other relative, then ask for money, usually through a gift card or wire transfer so it can’t be traced.
- Medicare or insurance scams: Callers pretend to be from a Medicare office and ask for information to verify identity, give benefits, follow up on a claim, or for another legitimate-sounding reason.
- Tech support scam: Callers pretend to be support reps and trick seniors into giving them access to computer logins and online accounts.
- Sweepstakes and charity scams: Callers trick seniors into thinking they’ve won a giveaway or lottery, then ask for identifying information to “claim their prize.” Another variation of this scam is a caller who pretends to be calling on behalf of a charitable organization to collect donations.
How to avoid financial fraud
Keeping financial information safe is the first and most important step to take:
- Talk with your parents about avoiding elderly scams. Emphasize that scammers often sound very legitimate; they know what to say and how to sound official. They use tools to mask the phone number so it looks like it is from an official source.
- Remind seniors to never provide personal information, banking passwords or other key details over the phone or in an email without checking with you first.
- Keep passwords unique, difficult to memorize, and in a safe tool such as a password manager.
- Limit the people who are able to access financial information or accounts. (Unfortunately, financial fraud is often committed by trusted family members, friends and caregivers, who may have easy access to funds.)
- Review financial statements and accounts on a regular basis.
- Keep computer anti-virus software and malware protection updated to avoid downloading viruses from online activity.
Tools to keep financial information safe
With the right tools, you can put roadblocks in place to keep scammers away from your loved ones. Here are some recommendations to help you get started:
- Block spam calls: Install a spam-blocking app on all phones and devices to prevent scam callers from even reaching your loved ones. Robokiller and Hiya are both good options that block more than a million known spam numbers; you can also manually add numbers to a blacklist. TextKiller is a similar app for blocking spam text messages.
- Keep passwords safe: Use a password manager such as LastPass or 1Password to generate unique passwords that are difficult to guess or hack. They’re also difficult to memorize, which means your parent won’t be able to share them over the phone or in an email from memory. This single precaution can be a huge help for peace of mind and reducing the risk of financial fraud.
- Keep email spam-free: Some email clients have an effective built-in spam-blocking filter, but not all do. If your loved ones use email frequently, check the inbox with them for spam mail. If any spam emails are getting through, install an email spam-blocking filter such as Mailwasher or SPAMFighter.
- Protect computers: Malicious software can allow for data mining, which puts personal information at risk. It’s easy to accidentally download a virus, especially for seniors who may not be as savvy about pop-ups and suspicious links or email attachments. Install anti-virus software such as Norton Antivirus on all computers.
- Guard against identity theft: An all-in-one protection against identity theft can help protect your loved ones from a number of elderly scams. We recommend Identity Guard: The company has been in the industry for approximately 25 years and has helped protect approximately 47 million consumers in that time.
If you suspect fraud, document everything and report it right away. Don’t be afraid to ask questions or require verification if something seems suspicious. Scamming is a very real concern, and protecting your loved ones requires good resources and ongoing vigilance.