Millions of Americans fall victim to financial fraud each year, and elder adults are particularly vulnerable. Below are some of the most common scams, warning signs and tips to prevent you or your loved one from becoming a victim.
Common Scams
Be aware of the different types of scams so you know what to look for.
- Romance Scam: Typically beginning online, romance scams target recent widow(er)s seeking love and companionship. Scammers build sophisticated digital personas to gain the trust—and funds—of vulnerable people.
- Grandparent Scam: Fraudsters posing as a grandchild or authority figure claim the grandchild has a tuition, legal or medical emergency. Victims are frightened into sending funds immediately to avoid dire consequences.
- Check Fraud: Victims are tricked into helping criminals launder money by acting as a “middleman” for financial transactions. Or, victims are given a bad check/transfer for more than they were expecting and asked to forward part of the money to another party.
- Government Impostor: Scammers pose as government officials from law enforcement, the IRS, FTC, FBI or similar and threaten serious legal consequences if payment is not made immediately. Official proceedings will be in writing and will give you plenty of time to verify their legitimacy.
- Recovery Scam: Fraudsters target previous victims and pose as officials who can help recover lost funds for a fee.
Red Flags
Watch out for these common signs of fraud.
- You’re asked to pre-pay taxes or fees on lottery winnings, an inheritance or similar windfall.
- Someone posing as a government agency, law enforcement or business requests payment in the form of a gift card or cryptocurrency.
- A “law enforcement” or a “government agent” contacts you by phone and threatens legal action or arrest if immediate payment is not made.
- A friend or romantic partner you met online but have never met in person asks you for money for any reason.
- Someone you’re doing business with (e.g., selling a car, eBay or Facebook Marketplace sale/purchase, etc.) asks you to deposit a check/accept a transfer for more than the amount of the transaction and return or forward the balance.
- Someone contacts you and requests money to help you recover from a previous scam.
- You’re asked to give someone you did not initiate contact with control of your computer.
Preventing Fraud
Here is what you can do now to stay safe.
- Add a trusted contact to your account(s): Provide your financial professional with the name and contact information of someone you trust. If fraud is suspected or there is concern for your well-being, a trusted contact can help the firm protect you.
- Carefully review your account statements regularly: If you see any suspicious transactions or activity you don’t recognize, contact your financial professional right away.
- Be alert for suspicious requests: If you receive a phone call or email that sounds like one of the scams or red flags listed above, ask your financial professional or a trusted family member or friend to review it with you before sending anyone money. Once funds are sent, they usually cannot be recovered.
- Maintain online safety: Keep your online IDs, logins and passwords secure. Change your passwords frequently and don’t open emails or click on links from unknown sources.
By staying vigilant, you can help protect yourself and your loved ones from being a fraudster’s next target.
Federal Bureau of Investigation: Elder Fraud
This material is being provided for educational and informational purposes only. D.A. Davidson & Co. is a registered broker-dealer and registered investment adviser that does not provide tax or legal advice. Information contained herein has been obtained by sources we consider reliable but is not guaranteed and we are not soliciting any action based upon it. Any opinions expressed are based on our interpretation of the data available to us at the time of the original article. These opinions are subject to change at any time without notice. Copyright D.A. Davidson & Co., 2023. All rights reserved. Member FINRA and SIPC.