How to Spot a Financial Scam: A Guide for Seniors
Scams targeting older Americans are widespread and, unfortunately, still growing. So, if you or someone you know has been targeted by a scam artist trying to steal money or personal information, you're not alone. According to the Senate Special Committee on Aging, older Americans lose an estimated $2.9 billion annually to fraud and exploitation, a number that is probably substantially underreported.
According to Broadridge Investor Communication Solutions, Inc., most scams start with a call, an email, a text, or an official-looking letter that appears to be from a government agency or a legitimate company. Sometimes the scam artist will go door-to-door soliciting business or donations to charity.
Scam artists are very good at gaining the trust of well-meaning people by convincingly impersonating someone authoritative, knowledgeable, or trustworthy — such as an IRS agent, a tech repair person, or even a relative. They play on your sympathy or make convincing threats to pressure you to go along with a scam. "Send money or provide personal information right now," they say, "if you want to help someone or prevent something bad from happening."
Broadridge Investor Communication Solutions shares some typical scenarios:
IRS scam: "You owe back taxes and penalties. Send payment immediately via a wire transfer, or you will be arrested."
Sweepstakes scam: "Congratulations, you've won a prize! To collect it, provide us with your bank account number so we can deposit a check."
Grandparent scam: "Hi Grandma, it's me. Don't you recognize my voice? I've been in an accident and need money for car repairs. Send gift cards, and don't tell anyone because I'm embarrassed."
Home repair scam: "I was just doing some work down the street for your neighbor, Bob, and I saw that you need some shingles replaced. I can do that for half the price I usually charge if you pay me in cash today."
If you are targeted, never give out personal information or send money. You don't need to make a quick decision. Call a friend, a relative, or the police for advice. Report the scam immediately to a fraud hotline such as the Senate Committee's toll-free hotline, (855) 303-9470.
Another popular con targeting seniors is the Social Security imposter scam. The scam generally starts like this: You answer a call or retrieve a voicemail message that tells you to "press 1" to speak to a government "support representative" for help in reactivating your Social Security number. The number on your caller ID looks real, so you respond. The "agent" you reach tells you that your Social Security number has been suspended due to suspicious activity or because it has been involved in a crime.
You're worried. You know how important it is to keep your Social Security number safe. So when the caller asks you to confirm this number to reactivate it or says your bank account is about to be seized, you’re alarmed. The scammer tells you the Social Security Administration (SSA) can safeguard your social security number if you put your money on gift cards and provide the codes. If you balk, you may be reminded that your accounts will be seized or frozen if you don't act quickly.
Although none of this is true (the SSA will never threaten to seize benefits or suspend numbers), many people have fallen for the Social Security imposter scam, and the numbers are rising. According to the Federal Trade Commission (FTC), more than 76,000 reports of the Social
Security imposter scam were filed between April 2018 and March 2019. Reported losses during this period were $19 million, and almost half of the reports were filed in February and March 2019.
Here are some tips directly from the FTC to help you avoid becoming a victim:
Do not trust caller ID. Scam calls may appear on caller ID as the Social Security Administration and look like the agency's actual number.
Don't give the caller your Social Security number or other personal information. If you already did, visit IdentityTheft.gov/SSA to find out what steps you can take to protect your credit and your identity.
Check with the actual Social Security Administration. The SSA will not contact you out of the blue. But you can call the agency directly at (800) 772-1213 to find out if the SSA is really trying to reach you and why. (You can trust this number if you call it yourself.)
This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Although we go to great lengths to ensure our information is accurate and useful, we recommend you consult a tax preparer, professional tax advisor, or lawyer.
Allegiant Wealth Strategies offers securities and advisory services through Commonwealth Financial Network, Member FINRA/SIPC. Allegiant Wealth Strategies has offices in Battle Creek and Portage, Michigan, from which we serve Calhoun County and Kalamazoo County as well as Kent County (Grand Rapids). The Allegiant Wealth Strategies team offers no-obligation financial planning consultations; call at 269-218-2100 or contact us here.