How to Protect Your Aging Parents from Scammers
Scammers are actively seeking to exploit older adults. In 2021, 92,371 older Americans reported falling victim to fraud, resulting in total losses of $1.7 billion.
The statistics are concerning, particularly for those who worry about their aging parents or other elder relatives being targeted. This article delves into the most common scams aimed at seniors and provides tips to protect loved ones from falling victim.
The Top 5 Scams
The National Council on Aging reports that out of 8,000 complaints made to a fraud hotline, 65% of them reported the following five types of scams:
Government representation scams: In government representation scams, fraudsters impersonate officials from government agencies such as the IRS or Social Security Administration and make threats to trick older adults into sending money or handing over their personal information that can be used for identity theft.
Sweepstakes and lottery scams: In sweepstakes and lottery scams, the scammer contacts an older adult claiming they have won a prize, but in order to receive it, they must first send money to claim the winnings.
Robocalls and phone scams. Scammers use robocalls to target older adults who answer their phones. They may capture and use the senior’s voice to make unauthorized credit card charges or other forms of theft. They may also claim that payment is required for an expired warranty or similar service.
Computer tech support scams. In computer tech support scams, the older adult receives a pop-up message on their computer or cellphone claiming that their device is damaged. The victim then calls a provided support number and pays a fee or unknowingly gives the scammer access to their device.
The grandparent scam. In the grandparent scam, the scammer contacts the older adult pretending to be a grandchild who needs financial assistance and requests help through gifts or money transfers. The scammer may have obtained the grandchild’s name by first asking, “Hi, Grandma, do you know who this is?” and, of course, Grandma obliges by providing a name.
Unfortunately, these are not the only scams that older adults face. Criminals use various ploys, such as romance and COVID-19, to target older Americans. To learn more about the scams targeting older Americans, check out this National Council on Aging article.
What You Can Do to Protect Your Parents and Other Loved Ones
You can take steps to help your parents avoid falling victim to scams. However, it may be challenging since your parents may be unwilling to discuss their finances.
Effective communication is crucial in this situation. The AARP article “Protect Your Parents from Scams” provides tips for talking with your parents about this issue, such as:
Make sure to explain the reasons behind your advice. According to AARP, it’s important you don’t just tell your parents to hang up the phone without providing context. For example, you can remind them that Medicare already has their information on file, so they won’t receive calls to verify it.
Be mindful not to shame or blame your parents. Such an approach can make them defensive. AARP suggests reminding them of what they taught you in the past: not to trust strangers—in this case, those asking for personal information or money.
Use reverse psychology. Ask your parents how you can do the same thing that they are doing. This could help them realize that because they don’t want you to lose money, they might be losing money too.
Involve your parents in helping others avoid falling for scams. If they have been targeted, ask them to consider sharing their experience to assist others in recognizing and preventing similar scams.
With a foundation of communication, you can take actionable steps such as:
Add them to the Do Not Call and Direct Marketing Association opt-out lists. Remove personal information such as phone numbers and birthdays from their social media accounts. Consider making their accounts and entries private instead of public. Also, check online by looking up their names on Google to see what information is being sold by websites. Contact those sites and request the removal of the data.
Establish read-only statements for yourself from their banks and other financial accounts to keep an eye out for fraudulent activities.
Check their credit reports on AnnualCreditReport.com.
You may also consider discussing with them the addition of a “trusted contact” to their financial accounts. For instance, our fiduciary retirement planning firm can add a trusted contact to certain investment accounts so that they can be contacted if any potential issues are detected.
A Concerning Reality
Scammers use technology and the trust of older adults to take advantage of them, resulting in billions of dollars in losses each year. Unfortunately, this money usually goes unrecovered, only encouraging criminals to continue their activities.
Our advisors regularly discuss financial safety with our clients. We urge you and your parents to have a conversation about the measures to be taken to protect against the growing number of elder scams. With open communication and practical steps, you can assist your parents in safeguarding what they have worked hard to build over the years.
This material was prepared by Kaleido Inc. from information derived from sources believed to be accurate. This information should not be construed as investment, tax or legal advice. This commentary reflects the personal opinions, viewpoints and analyses of the Stordahl Capital Management, Inc. employees providing such comments, and should not be regarded as a description of advisory services provided by Stordahl Capital Management, Inc. or performance returns of any Stordahl Capital Management, Inc. Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing in this piece constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Accessing websites through links directs you away from our website. Stordahl Capital Management is not responsible for errors or omissions in the material on third party websites and does not necessarily approve of or endorse the information provided. Users who gain access to third party websites may be subject to the copyright and other restrictions on use imposed by those providers and assume responsibility and risk from the use of those websites. Please note that trading instructions through email, fax or voicemail will not be taken. Your identity and timely retrieval of instructions cannot be guaranteed. Stordahl Capital Management, Inc. manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.