Is That Really Your Grandkid Calling, or an AI Scam Trying to Rip You Off? 3 Tips to Protect Your Money
Artificial intelligence has given fraudsters new tools that make it even easier to identify vulnerable retirees and steal their money. What can you do to stay safe?
Coca-Cola is making AI-generated commercials, and an entirely AI-generated folk band has passed 1 million listeners on Spotify… It's safe to say artificial intelligence has exploded into the mainstream and evolved at a breakneck pace.
Unfortunately, scammers have taken note, found ways to make this tool their own and made retirees their prime target. The "phantom hacker" scam, for example, has drained more than $1 billion from victims since 2024.
In this article, I highlight some of the newest tactics scammers are deploying and how AI is making this situation more difficult. I also offer three tips to help you catch fraud before it catches you.
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AI evolution
Gone are the days of the "Nigerian prince" asking for your monetary donation. Now, scammers can pretend to be a close friend or even a family member.
AI can change voices to make a man sound like a woman, or an older adult sound like a child, making hoaxes far more convincing and likely to snare older victims.
AI is also being used to help scammers find the most vulnerable targets. It can skim social media profiles to find retirees who post about their new car or a large charitable donation. It can read obituaries to find widows with life insurance benefits to claim.
New tools, old tactics
If you've never heard of a "crypto ATM scam," look it up. It's the newest way for scammers to push retirees into parting with their money.
But although criminals may have new ways to dress up their scams, the one key factor is that they need access to your personal information. Fraud therefore boils down to a simple formula:
- A scammer will contact you via text, phone call or email. They will use impersonation tactics to convince you they are a trusted source and that they're here to help. They may pretend to be tech support, your bank or even a family member.
- They will ask you to provide sensitive information or conduct a transfer on their behalf.
- This action will give them access to your accounts or allow them to walk off with your money.
A note here on the IRS, as we're in tax season: The IRS will never call you to demand payment or sensitive information. It will primarily communicate through the mail, which is not fast, but a lot safer.
With all that in mind, here are three tips to shore up your defenses in this new era of fraud.
1. Be smart with passwords
Passwords are your first line of defense, but hackers don't need to steal them from you — they can steal them directly from the companies holding your accounts.
The rate of data breaches in the U.S. is multiplying year over year. In 2025, more than 3,000 data breaches occurred, a 79% increase over the past five years.
If the password to your financial institution is the same as it is on your old MySpace account, one stolen password means every account is susceptible.
Ensure your passwords are complicated. They should contain more than 10 characters, a symbol and a number at the bare minimum.
Change your passwords regularly and do not use the same password for every account. As tedious as it may be to have a dozen passwords floating around in your head, it's imperative to keep your information safe.
2. Question every request
As a child, your parents likely told you to be wary of strangers. Nowadays, you're likely to be contacted by someone lying about their identity. They could say they are from your bank, your investment services, your health care provider or even your community center.
You should never hand over information freely, especially if you are not 100% familiar with the source asking for it.
Email and social media DMs are common avenues for scammers to reach out, but phone calls are still the most popular and effective method.
Scammers often want to push the urgency of the situation, forcing you to react quickly and fail to consider the ramifications.
If you're on the phone and feel you are being rushed to take immediate action, that's a red flag.
Try slowing down the process. Tell the person on the line that you'll call them back. Disrupt the path you're being pressured to take.
3. Verify with a third party
In every scenario where sensitive information is requested, verify the source. Most fraud that occurs in the business world is due to human error. It's why there are so many training sessions to prevent employees from clicking on fatal links or opening emails from unknown senders.
The weakest part of the security chain is always the human component.
If someone calls you claiming to be from your bank, take down their name and call the bank itself to verify.
If you get a text from a customer support representative, confirm by contacting the company yourself.
Even showing a friend a questionable email to get their opinion can be enough to stop fraud in its tracks.
Scammers will work in conjunction with one another to make their claims more legitimate. Don't innately trust the people who come to you. Contact organizations yourself to confirm or expose the identities of your callers.
The unfortunate thread that ties most fraud together is that older adults are prime targets. Retirees statistically have more liquid assets to steal and are less adept at deciphering scammers' tactics.
As we age, we all become less familiar with technological advancements and trends. Retirees must defend against bad actors more than any other group, but are often the least well equipped to do so. With a cautious eye and informed mind, that can change.
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- What Not to Do After Inheriting Wealth: 4 Mistakes That Could Cost You Everything
