Vulnerable to Financial Scams

Aging Makes Us More Vulnerable to Financial Scams: Here’s How to Spot Them

By | September 25th, 2023

Older adults are being targeted by scammers every single day. Here are some common financial scams and how to spot them.

Your phone rings out of the blue. It’s an unknown number. Picking up, you hear a gruff, aggressive voice on the other end. They tell you they’re from the IRS, your taxes are overdue, and you will be arrested if you don’t pay up in the next six hours. 

This is a typical script for a scam call that many people hang up on regularly. However, research shows that as people age, they become more susceptible to financial scams. In fact, in 2022, more than 80,000 Americans over 60 were reported to have been victims of financial fraud, amounting to a total loss of $3.1 billion — almost double the amount of money lost  to scams like this one in 2021. Experts say this figure is likely still underestimating the problem: Many more people are embarrassed to come forward. 

Research also shows that some older individuals are more susceptible to cons than others. 

A study published in the Annals of Internal Medicine assessed scam awareness in 935 cognitively healthy older adults, following up six years later to look at changes in cognitive health. Among the individuals who fell victim to fraud, the researchers found they were more than twice as likely to be diagnosed with Alzheimer’s or mild cognitive impairment over the next six years. 

According to  Fiona Carragher, chief policy and research officer at Alzheimer’s Society, while not everyone who was found to be especially vulnerable to financial scams went on to develop Alzheimer’s, the study showed that early-stage cognitive decline — which could be associated with a disease like Alzheimer’s — did appear to be a significant risk factor. 

“This study backs up previous research by showing, unsurprisingly, that people whose thinking and reasoning skills are declining are at higher risk [to] potential con artists,” said Carragher said of the study. 

The good news? There are ways to spot financial scams. Here is the most important  expert-backed way to help avoid falling victim to a scammer — and a few (of many) common scams to look out for.

The golden rules for staying safe from scammers: Never give out sensitive personal data over the phone.

No matter what the person on the other end of the phone says, if they’re asking for sensitive personal data — like your address, credit card number, social security, Medicare, bank information or any account passwords — do not give it out. You should not be required to as it isn’t secure. In fact, many institutions state on their website that they will never require people to give this information over the phone.

To verify whether the person on the phone is legitimate, take down their name and phone number, and call the entity they claim to be directly — like the bank or government service — to inquire about the issue. 

If you get a call from a person asking
for you to transfer money over the
phone for any reason, that’s a red flag.

If the caller says they’re calling from an agency or organization you’re not familiar with, ask a friend for help in Googling the organization to verify its validity and contact it directly via the number on its website.

Don’t transfer money to anyone over the phone without verifying the legitimacy of the call in multiple ways.

There have even been scams where scammers know the name of someone close to you and say they are with that person, or that that person is in danger. Some scammers have the ability to clone a loved one’s voice. They might imitate law enforcement. This can be incredibly scary, but if it happens to you, there’s a good chance your loved one is perfectly safe, and that this is a virtual kidnapping scam. If you get a call from a person asking for you to transfer money over the phone for any reason, that’s a red flag. Read more what to do if you get a call that might be a “kidnapping scam” here.

Beware these popular financial scams 

Scam #1: The tech support scam

One of the most common scams out there today involves texting or calling someone to inform them their computer has been hacked. From there, a “tech support” person asks the recipient to buy gift cards to cover the cost of “antivirus” software.

Alternatively, the scammers might ask you to download a program that grants them control over your computer to fix the supposed hacking issue. From there, they can take your personal data, passwords, and information, and, at worst, take money directly from your bank account.

Don’t fall for this scam. Companies like Microsoft or Apple will not call customers directly to tell them they have a virus. If you’re concerned about your computer, visit a computer repair shop in your neighborhood or better, seek counsel from a trusted and computer-savvy friend or family member. 

Scam #2: The unsolicited prize

Ever receive an email from a stranger — possibly one with lots of spelling and grammar mistakes — that promises you a lot of money, an amazing investment opportunity, or a new car, a free cruise, or an inheritance you didn’t realize you were entitled to? Often there’s a catch to this unsolicited freebie. 

If you respond to these emails, the person on the other end will ask you to share personal data and banking information so that you can transfer them a small fee to — supposedly —  pay off the expenses of sending you the prize. 

If you’re offered a prize or freebie you didn’t apply for and have never heard of, reduce your risk of being scammed by hanging up on the caller and never thinking about it again.

Scam #3: The sweetheart scam

Sweetheart scams are on the rise — and they may be difficult to spot. You meet someone online who claims to live in another country or is wary of speaking face-to-face or over Zoom. They build up a rapport and divulge their feelings for you, but they may not be who they say they are — and may have ulterior motives. The romantic partner may be a scammer who wants to use the relationship to bamboozle your money away from you or a loved one.

This one takes a while to unfold — and it hurts. But experts advise that when it comes to unsolicited phone calls, offers, or notices, people should take a “guilty until proven innocent” approach.

If you’re a family member, spouse, or caregiver, you can help your older loved ones avoid financial scams by watching for warning signs. Additionally, if an older family member has fallen victim to fraud, remember the link between vulnerability and early cognitive decline, and consider encouraging them to book an exploratory screening appointment for mild cognitive impairment. 

 

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3 thoughts on “Aging Makes Us More Vulnerable to Financial Scams: Here’s How to Spot Them

  1. Make sure to warn about the “grandparent-grandchild in trouble” scam. Several years ago someone called me saying he was my “grandson” and had been in an auto accident. He said he wanted to give this “lawyer” my number so bail could be arranged. Since none of my grandsons was over the age of 10 at the time, I knew it was a scam. I played along for a while and then cussed him out and told him that he already owed me $3k, so I wasn’t going to do a thing for him and hung up. Later I found out another relative had had the same pulled on him, but fell for it and lost $2700.

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