With financial scams on the rise, it’s imperative to be on guard against all forms of potential financial threats. Unfortunately, some of the most vulnerable people may be your loved ones, especially elderly parents. This segment of the population is less likely to be savvy about scams involving money and about ways to prevent being a victim. Protecting your parents from financial scams is possible, though, with a few simple steps.
Keep Abreast of Trending Scams
In order to keep your parents from being victims, you need to keep abreast about the latest scams yourself. Stay informed by reading relevant articles online, especially those published by authority sites. For instance, the Consumer Financial Protection Bureau is an official website of the U.S. government. They are a verifiable source of reliable information about fraud and scams. Visit this site often to learn about the most recent trends in all kinds of financial scams. Other possible sources of reliable information regarding money scams include your bank or credit union, AARP, The National Council on Aging and certain financial sites such as Money and Investopedia. The more information you equip yourself with, the better you’ll be able to protect your parents.
Common Financial Scams to be Aware Of
This collection of common financial scams to be aware of will be incomplete, because new scams are always surfacing. It seems like scammers spend a lot of time devising new ways to cheat people out of their hard-earned money. Still, this list can form a basis from which you can begin to learn more about money scams.
Phishing
Phishing is the term used when emails, texts or telephone calls are used to trick people into giving their personal financial information. For instance an email might pop up on your parents’ phone telling them that their social security number has been leaked. They might be tricked into clicking on a link, where they then need to enter their SSN. These messages often appear genuine and urgent, prompting quick action from unsuspecting older folks.
To Prevent: Teach parents never to give out personal information to callers or emailers unless they themselves initiated the call.
Timeshare Fraud
Recently, it’s been discovered that a massive timeshare fraud scheme has been used to steal millions of dollars from unsuspecting Americans. As older people are more likely to fall for this real estate scam, this is a good one to be aware of to protect your parents. In this scam, timeshare owners are offered a chance to sell their timeshare, but with a catch. A hefty “tax levy” would have to be paid first. In fact, that fee goes to Mexican cartels, and the timeshare is never sold.
To Prevent: Educate your parents about this new scam. If your parents are eager to sell their timeshare, find legitimate companies that will help sell the timeshare on behalf of your parents.
Investment Fraud
Older folks seeking lucrative investment opportunities may fall prey to investment fraud. In this scenario, a “too good to be true” investment with little risk is the lure. In reality, the investment never pays out, and by the time the victims figure it out, it’s too late to recoup their losses.
To Prevent: Ask parents to loop you in on any new investments. Take the time to investigate investments thoroughly, together with your parents.
Grandparent Scams
In this particularly mean scam, a caller pretends to be a grandchild in distress, needing immediate financial help. The grandparent sends a money order or a gift card and, of course, loses out on all that money.
To Prevent: Give your children and your parents a secret word. Let your parents know to always ask for that secret word if anyone calls pretending to be a grandchild in distress.
Sweepstakes and Lottery Scams
With this scam, victims are told that they’ve come into a great deal of money by winning a lottery or sweepstakes. One famous sweepstakes in particular is often cited. To claim the prize, the victim usually needs to pay a fee or disclose personal data.
To Prevent: Remind parents that no reputable lottery or sweepstakes organization would ask for a fee in order to collect winnings. Encourage parents to contact you if they do receive such a notification, so that you can investigate its authenticity.
Tech Support Scams
Scammers may pose as tech support representatives, claiming that the victim's computer is infected with a virus. This usually happens with a scam popup on the computer. They then ask for remote access to the computer or demand payment for fake repair services. Older folks might feel embarrassed about “breaking” their computer and pay money without telling anyone.
To Prevent: Work with parents online, helping them to successfully navigate their way on the web. Let parents know that they can’t break their computer, and also teach them how to spot the differences between a legitimate website and a fake popup urging them to click.
If Parents do Fall Victim
If, despite everyone’s best efforts, your parents do fall victim to a financial scam, take action immediately. Don’t wait until “Monday” or “tomorrow morning.” Contact the banks, credit unions, investment companies and other relevant institutions where your parents have their money. Call credit card companies, cancel cards and have new ones mailed out, after verifying the correct mailing address. Next, contact your local police department. They may not handle the complaint directly, but they will be able to tell you which agency you need to notify, based on the nature of the scam.
Your parents spent their young lives taking care of you. Now it’s time to return the favor by watching your parents’ backs and protecting them from the clever financial scams sweeping the world. The more you and your parents discuss this risk, the better you can work together to keep them safe. For more information about safeguarding your parents’ financial future, get in touch with a CPA.
by Kate Supino