Older? Are You Alert for These Common Financial Scams?
Scammers love to target older adults. What makes older adults attractive targets? They are more likely to have "nest eggs," own their home, and have good credit. Many are trusting, good natured, and willing to believe what people tell them. Scams targeting older adults come via the telephone, email, and even the front door.
While the scams described below tend to be targeted towards older adults, anyone can be targeted. So whether you are older or not, it's smart to stay alert to the scams most active today.
- Grandparent Scam
This scam is also known as the "emergency scam" and starts with a phone call, email, or even a Facebook message from someone who claims to be a family member or friend of a family member. The "family member" is far from home, and needs money wired immediately to post bail, pay car repairs, or pay a hospital bill. In the latest twist to these scams, they may refer correctly by name to other family members.
You can avoid this scam by taking your time. Verify the situation by contacting the family member directly or checking the story with other family members. Do this even if the caller or message sender asked you not to do so because they don't want other family members to know.
- Caller-ID Spoofing
Many people find caller-ID for phone calls very useful but the feature can be spoofed. Caller-ID spoofing is making a false caller ID or a "cloned" ID appear on the caller-ID display. Scammers can use this to pose as a credit card company, bank, utility company, government agency or other business in order to steal your identity or financial information. In another twist on these scams, the scammer may use a name similar to a legitimate one.
You can avoid this scam by not giving out your personal and financial information to any incoming call. If you receive a call like this, hang up and call them back using the phone number on your statement, account card, or the company's website.
- Foreign Lottery Scams
In this scam, you may receive a letter, email, or phone call stating that you have won the lottery or sweepstakes in Canada or another country. The catch is, the message or caller indicates that you must pay taxes, processing fees, or delivery fees. You must send them the money or give them your credit card or bank account number before they will send your winnings.
You can avoid this scam by trashing the letter or email and hanging up on the phone call. Even if you've participated in a lottery or sweepstakes, you should never have to send money to receive your winnings. Also, note that it is illegal in the U.S. to participate in a foreign lottery.
- Investment Fraud and Scams
Everyone wants their money to grow and scammers try to take advantage. These scams take many forms. You could receive an offer in the mail, a phone call, an email, or an invitation to a free lunch seminar. The offers may use timely references to current economic events. Warning signs for this scam include promising high rates of return, a guarantee that you'll make a profit, claiming that there's no risk, and/or urging immediate action because the offer is only available "today."
You can avoid these types of scams by taking your time and doing your homework before deciding to invest. Check out the investment, the company offering the investment, and even the person selling the investment. Make sure you know what type of returns investments are making in the current market.
General Warning Signs of a Scam or Fraud
We've looked at some specific scams currently making the rounds, but there are others including variations on the ones above. Here are some tips to help you avoid being taken. Tear up the offer, hang up the phone, or delete the email if an "offer" raises any of the following red flags.
- The offer requires you to act quickly. In some instances the salesperson stresses "you must act now." If you are being pressured, just hang up.
- The company's address or phone number is not provided or the only contact information on their website is an email address.
- You must wire money to a third party, possibly in another country.
- The email or caller requests your bank account number, credit card numbers, social security number or other personal information. Legitimate companies including your credit union and other financial institutions never initiate such requests with customers in this way.
- If it sounds too good to be true, then it probably isn't true.
A Little Knowledge Can Protect a Lot
Making sure that you and family members know about these popular scams and common red flags can insure that your money and personal information stay secure.
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