Retirement is a time to celebrate, relax and reap the rewards from decades of working. However, it can be hard to enjoy the fruits of your labor when you're being targeted for fraud. While scammers don't discriminate, the people most vulnerable to scams tend to be older adults.
According to a new study from the AARP, scams targeting older adults cost them more than $28 billion each year. From strange phone calls to fake sweepstakes wins, older people are faced with a variety of outside threats. Many retirees are living on a fixed income and cannot afford to fall for any of these scams. They need their money to last for their entire retirement, and in most cases, the money stolen from them is never returned, which could be devastating to their financial situation.
However, there are a few basic guidelines that can help older adults understand what to look out for to avoid becoming a victim.
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1. Impostor scams.
One of the most common scams that older people face is impostor scams, specifically people impersonating government officials. In these scams, older adults will receive calls from people pretending to be officials with the Social Security Administration, the IRS or Medicare. They may ask for personal information like a bank account number or passwords. Scammers may go so far as to threaten victims with arrest or suspension of their Social Security payments if they don’t give them the information that they want.
If you receive a phone call from someone claiming to be a government official, it’s a scam and you should immediately hang up. Representatives from the IRS and Social Security Administration never ask for personal information over the phone and will not threaten legal action or demand money.
2. Grandchildren scams.
A scam that is becoming more common is the grandparent scam. This is when a scammer pretending to be a grandchild calls and asks for money. They will claim that they are in trouble and need money for bills or even say they were arrested and need bail money. Many scammers research social media pages or obituaries so they can share personal information to help convince the older adult that they are their grandchild.
If you receive a call like this, the first thing you should do is immediately hang up. Then you can call the relative the caller was pretending to be and see if they can verify they are ok. Don’t ever send money or gift cards to the imposter. A good tip is to come up with a code word with loved ones so if anyone is ever in real trouble you can ask for it over the phone so you know if it is an actual emergency.
3. Caregiver scams.
Many older adults have caregivers who live with them or spend a significant amount of time in their homes. These caregivers tend to have access to their clients’ personal information, making it easier for them to steal cash, credit cards or valuables. Some may even use this information to open up new credit cards or bank accounts to make purchases for themselves. Unfortunately, if the caregiver is related to the older person, many of these scams will go unreported because of the close relationship.
If you are hiring a caregiver for yourself or a family member, do your research. Make sure the person is licensed and comes from a reputable company. Ask for references and speak with people who have worked with them in the past.
Scams against older adults are scary and becoming more common. If you or a member of your family falls victim to a scam, the first thing you should do is report it to your local police department or sheriff’s office. If your case needs to be investigated further, they can refer you to the proper authorities. If you are worried about being scammed, educate yourself. By understanding what to look for, you can help protect yourself from becoming a victim.
Drake & Associates is an independent investment advisory firm registered with the U.S. Securities & Exchange Commission. This is prepared for informational purposes only. It does not address specific investment objectives, or the financial situation and the particular needs of any person who may view this report. Neither the information nor any opinion expressed it so be construed as solicitation to buy or sell a security of personalized investment, tax, or legal advice. The information cited is believed to be from reliable sources, Drake & Associates assumes no obligation to update this information, or to advise on further development relating to it. Past performance is not indicative of future results. Registration as an investment adviser does not imply a certain level of skill or training.
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