Financial Scams: Top 5 Scams and How to Protect Yourself

Posted Dec 29th, 2020 in Prevention, Legal, Aging Successfully

an older aldy is looking at an email with a worried expression.

Unfortunately, older adults are a common target for fraudsters. With almost half of those over 65 reporting having been targeted. In the US older adults are cheated out of 3 billion dollars a year by scammers. Con artists can show up as door-to-door salespeople,  robo callers, telemarketers, by email and regular mail. This doesn't even consider the fraud and theft that can occur at the hands of family members.

In this article, I’ll share the top five scams that you  need to be aware of and how to protect yourself. 

The Email “Phishing” Scam

I receive an email phishing scam at least on a daily basis. This is an email that asks me to verify my credit card information or other personal information. This email usually looks like it's from a company or an agency that I might have visited before such as a bank, Canada Revenue, or an online service like PayPal or Netflix. I am asked to click on a link and update my credit card information. These emails can be very deceptive sometimes even using logos that are identical to those of the actual company. The thieves that send these emails are hoping that people will follow the link and update their banking information which can then be used to purchase items for themselves. 

How to avoid it: if you look carefully at these emails you'll notice that there are errors. The grammar may not be perfect. The language used may be odd and feature expressions that aren't commonly used in your region of the world. They may address you by a name that you don't normally use or even just as” Sir” or “Madam”. If you look at the return email address it's often a bizarre gobbledygook of letters and numbers. Most banks and online services do not ask you to update your credit card information by email. If this is necessary they will often contact you by your cell phone number if you've given it to them or by mail. Just delete these emails or find out how to block senders or report phishing scams to your email provider. 

The Grandson in Trouble 

The scam usually involves a phone call or an email from a thief impersonating a relative or friend that needs you to send money. Our first instinct is always to help out friends or family members especially if we can do so as easily as sending some cash.

How to avoid it:  Put down the phone and contact somebody else to verify if indeed there actually is a person in trouble. 

The Fake Sweepstakes 

Imagine how exciting it would be to get an email indicating that you've won a huge sum of money. All you need to do is make a payment to unlock this prize. The fraudster may tell you that you need to pay taxes on the amount of money or some other such ruse. 

How to avoid it: Never send money before receiving a potential lottery or sweepstakes payout. 

The Fake Anti-aging Product 

We've all bought things that have made incredible claims but many older adults are scammed into spending thousands of dollars on compounds or devices that are nothing more than nicely packaged garbage. Even worse some scams such as fake Botox have been toxic and could cause serious health consequences. 

How to avoid it: always talk to a health professional before signing up for a monthly order of vitamins or agreeing to any type of cosmetic treatment. Never sign up for something that requires an “auto ship” subscription that means you will get charged for items every month whether you need a refill on them or not. 

Risky investment schemes 

High risk financial investments are not a good idea, especially later in life. Older adults are known to have nest eggs or some may have sizeable pensions and are prime targets for people looking to start a brand new pyramid scheme. 

How to avoid it: have a financial advisor that you trust. If you get an offer that sounds too good to be true it probably is. Run it past a trusted family member or financial advisor before signing on the dotted line.

All these scams are frightening and can affect people of any age. Older adults may be more likely to be trusting, and many are isolated, leaving them open to these fraudulent attacks. We all want to be nice especially when someone phones us or comes to our door but that's what thieves are counting on. Fraudsters will stoop so low as to take advantage of an older adult’s goodwill and the consequences can be devastating. 

The other advice that I give to my older patients is to appoint a continuing power of attorney for property. This is when you name somebody that you trust to be your attorney and act on your behalf regarding your financial matters in the case that you become incompetent. It's probably not a bad idea to give this person permission to look at your financial records every once in a while, and to check in with them before agreeing on any large new investments, or a reverse mortgage, or before signing up for expensive new products or services that you may not need. 

Remember that it's OK to say “no “.  You've worked hard for your money all of your life and you need to continue to be vigilant in order to protect it later in life.


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