Talking to Your Parents About Scammers
Shortly after her father died, Rita €heng gave her mom a smartphone to make it easier for her to keep in touch with friends. It seemed like the right thing to do, she said. But it opened up opportunities for her mom to start connecting with people on Facebook and on websites – people who weren’t always who they said they were.
Rita’s mom started spending a lot of time on her phone and talking about a guy named Bill. This set off an internal alarm for Rita, who is a certified financial planner, €EO of Blue Ocean Global Wealth, and member of an elder abuse prevention committee in Washington, D.€.1 She wanted her mom to make friends and didn’t want to poke around in her business too much. But she started asking questions and warning her mom about the dangers of dating in the digital world. Rita told her mom not to invite people she had met online to her home and to meet only during the day – never at night – and only in a public place.
However, her mom was vulnerable after the death of Rita’s dad, and the man she had been talking to online took advantage of that. He had persuaded her to transfer $15,000 to a bank account so he could buy plane tickets for them and they could take a trip together. If it weren’t for a bizarre set of events, Rita might not have found out that her mom had been scammed soon enough to take action.
A social worker in Maryland where Rita’s mom lives called Rita to tell her that her mom was a victim of a sweetheart scam. “I started crying because I thought, ‘How could I let this happen?” Rita said.
social worker had gotten a call from a social worker in Portland, Oregon, who
had been called by a woman who said she had a lot
of money in her bank account but didn’t want it because it would’ve made
her ineligible for the Social Security disability benefits she was receiving.
The money had been transferred to the account by Rita’s mom. Rita suspects that
the person who befriended her mom online had used the Oregon woman’s account
number for the transfer.
The social worker had called Rita’s mom to get more information about the money transfer and figured out she had been scammed. Rita’s mom then asked the social worker to call Rita, who then spent the next six months calling and writing the bank in Oregon to get back her mom’s money. After jumping through several hoops, Rita finally recovered $1s,600 of the
$15,000 that her mom thought she was sending to a guy named Bill to pay for a vacation for them.
€heng’s mother was just one of thousands of older adults who become victims of online sweetheart scams every year. In 2017, the FBI’s Internet
€rime €omplaint €enter received 15,s72 complaints about romance scams that cost victims more than $211 million. Unfortunately, this isn’t the only way scammers are targeting older adults.
About 1 in 20 older Americans have reported being victims of financial exploitation, according to the National Adult Protective Services Association (NAPSA).2 But that number likely doesn’t represent the true scope of the problem because only one in 44 cases of financial abuse is reported, according to NAPSA. Although the total amount of money older adults lose every year to fraud isn’t known, some estimates show that it’s in the billions of dollars.s
In short, financial exploitation of older adults is a big problem. If you don’t want your parents to become part of the statistics, you need to make them aware of the ways scammers could target them so they don’t become victims.
WHY OLDER ADULTS ARE TARCETS
Anyone can become a victim of a scam or fraud. However, older adults are especially susceptible for several reasons. You don’t need to share all of these reasons with your parents, but it’s important for you to know why they are targets.
Scammers think they have money. One of the primary reasons con artists prey on older adults is
because they assume they have a stash of retirement savings, a stream of income
from Social Security, and a pension or other assets. “They’re being targeted
because that’s where scammers think the
money is,” said Kathy Stokes,4 a fraud expert for AARP, the nation’s leading advocacy group for adults ages 50 and older.
Scammers assume they’re vulnerable. A decline in physical and mental health can make older adults more susceptible to financial exploitation. A New York State study5 of financial exploitation among the elderly found that 68 percent of alleged victims in that state had at least one serious health impairment. And 58 percent were adults who required help with at least one daily activity, such as transportation and meal preparation.
It’s not just health issues that make older adults vulnerable. Inevitably, financial decision-making abilities decline with age, according to the National Endowment for Financial Education. So even healthy adults can become fraud victims because it may become more difficult for them to manage their money and recognize financial risks as they age.
Scammers know they’re trusting. Your parent’s generation was raised to be polite and respectful – and scammers exploit these traits. According to the FBI, con artists know that older adults are less likely to hang up when they call or say no to their requests.
Scammers know they probably won’t report the crime. Older adults are less likely to report that they’re victims of fraud because they don’t realize they’ve been scammed, are too embarrassed, or don’t know how to report the crime, according to the FBI. Even if older adults actually report that they’ve been victimized, scammers aren’t too worried they’ll get caught.
That’s because scammers expect their victims’ age to make it difficult for them to remember details of the crime, according to the FBI.
Unfortunately, many of the scammers who are exploiting older adults
aren’t strangers to them. They’re family members. Various studies6 have found that in one-third to two-thirds of cases
of financial exploitation, the perpetrators were family members. They take
advantage of aging adults’ trust and their roles as caregivers to line their
own pockets. That’s why it’s important to warn your parents not only about
strangers who want to take advantage of them but also about people who are
close to them who might take advantage of their generosity. Above all, you chouldn’t betray your
HOW TO HELP PROTECT YOUR PARENTS FROM EXPLOITATION
No matter what you do, you can’t guarantee that your parents won’t become victims of financial exploitation. But you can help lower their risk by talking to them about scams and fraud. Plus, these discussions might open the door to more conversations about your parents’ finances and help you work together to protect their money. Here’s how to get started, what you should say, and steps you can take to reduce their risk of becoming victims.
Use examples to start the conversation. One of the best ways to start talking to your parents about scams is to use an example, Stokes said. It can be an article you read or a report you heard on the radio or TV news. Better yet, you could mention that you got a phone call from a scammer and wanted to warn your parents to be on the lookout.
Financial planner John €ooper said he actually clips newspaper articles about the latest scams and gives them to clients. If you get all of your news online, he recommends actively searching for articles, then emailing them to your parents – or printing them out if they don’t use email. You can find detailed information about the various types of scams on the Better Business Bureau’s website at www.bbb.org/scamtips. The AARP Fraud Watch Network (www.aarp.org/fraudwatchnetwork) also has fraud news and useful information on spotting and avoiding scams. You can also use the resources on these sites to educate yourself about scams before talking to your parents.
Explain why they are at risk. After you warn your parents about scams you’ve heard about, let them know why they’re likely to be targets.
However, DO NOT tell them it’s because they’re old or vulnerable. You don’t need to list all of the reasons I mentioned that older adults are more likely to be exploited. Instead, focus on the primary reason. “Explain to them that it’s their age group that is a prime target for scammers because they’re perceived to have a bucket of retirement savings or a stream of income from pensions or Social Security or other assets,” Stokes said.
Alert your parents to red flags. You can’t just tell your parents to hang up on scammers when they
call, throw away solicitations that come in the mail, or avoid clicking on
links in suspicious emails and expect that to keep
them safe. Instead, you need to talk with them about the tactics scammers use so they can identify when someone might be trying to con them. “Ask them if they can find their inner skeptic any time a stranger calls or emails or comes to the door,” Stokes said. “They taught us never to talk to strangers. So we’re just reminding them the great rule they taught us when we were growing up.” Then tell your parents to watch out for these red flags:
Fees to collect winnings: If your parents get a call that they’ve won the lottery or a sweepstakes and have to pay a fee to collect their winnings, it’s probably a scam. For starters, if they didn’t enter a sweepstakes or buy a lottery ticket, there’s no way they could win. Plus, you never have to pay fees to collect lottery winnings, Stokes said. That’s just the way scammers get you to part with your money. In fact, any request to wire money is a big red flag.
€alls from government agencies: If your parents get a call from someone claiming to be with the IRS and stating that they owe money, it’s a scam. The same goes for calls from someone claiming to be with the Social Security Administration, Medicare, Federal Trade
€ommission, or other government agency. “People are pretending to be from these agencies to get at your personal information or your money,” Stokes said. Let your parents know that government agencies will not call them unless your parents expect them to call based on an issue they are already aware of, nor will they send emails. These agencies communicate by mail and will only contact you by phone if you call them first and have to leave a message requesting a return call. And they will never ask you to pay by wiring money.7
Emergency calls from
the grandkids: €learly, a call from the grandkids shouldn’t send up a red flag.
But warn your parents that if they get a call from someone claiming to be their
grandchild in trouble and in desperate need of cash fast, it could be a scam.
Telltale signs include a plea not to tell Mom or Dad and a request to wire
money, Stokes said. If they get a call like this, tell your parents to ask the
caller questions that only their grandchild could answer. Or they could tell
the person they need to switch phones and call right back – then call the
grandchild’s number (not a number the caller gives you).
Unsolicited calls: Let your parents know that any time they get a call from someone they don’t know or a group they’ve never had contact with that is asking for personal information, it’s a big red flag. If your parents are worried that it might be a legitimate request for information, they could hang up then look up the number for the agency, office, or organization that supposedly is calling and call it directly to see if it was trying to contact them.
Limited-time offers: Warn your parents to watch out for emails, text messages, or even phone calls from people offering them a chance to get in on a money-making opportunity or investment for a limited time only. Also, these pitches tend to include language that this so-called deal is only being offered to a select group of people. “Anyone who calls or sends a letter and says there’s an amazing opportunity for an investment but it’s only available to the 52 people we’ve identified we want to offer it to, it’s not legitimate,” Stokes said. Scammers and unscrupulous investment brokers want people to feel like they’re special and to act quickly without doing any research.
High-pressure sales tactics: Let your parents know that it’s a red flag if someone who is trying to sell them something becomes aggressive or threatening. High-pressure sales tactics are meant to force people into snap decisions and often are a sign of a con, according to the Better Business Bureau.8
Free lunches: There’s a good chance your parents will get offers in the mail to attend free lunch or free dinner investment seminars. You should warn them that these seminars are sales pitches9 meant to get people to purchase high-fee, unsuitable, or even fraudulent investments. And the sales people use high-pressure tactics to try to seal the deal. “My advice: There is no free lunch,” Stokes said. “Don’t go.”
investments with no risks: A pitch for an investment that offers high returns
with no risk might sound ideal to your parents – especially if they’re trying
to boost their retirement savings. But let them know that all investments have
some level of risk.10 Typically,
the higher the return, the more risk you have to take.
You can visit €ameronHuddleston.com for a full list of scam red flags and examples of common scams to download, print, and share with your parents.
Don’t just tell them to hang up. Instead, create a refusal script. There are so many ways scammers can reach victims now, but the primary way is still the telephone, Stokes said. But you can’t just tell your parents not to answer the phone if caller ID shows a number they don’t recognize or to hang up if it’s someone they don’t know. “It’s not in their DNA,” Stokes said. They think it’s rude not to answer or to hang up. And they might worry that if they don’t answer it, they might miss an important call.
So you need to help them come up with a sentence that helps them get off the phone without feeling bad. Stokes said she told her mom to tell telemarketers and questionable callers that she’s having tea with Officer Brady and couldn’t take the call. You could tell your parents to say something similar, or even “I’m on the way out the door.”
Also caution your parents against staying on the phone with scammers if they know it’s a con but just want to mess with the person. Stokes said that phone numbers are bought and sold, and scammers look at call data to see how long people stay on the line. “If you’re going to stay on the phone for five minutes because you’re screwing with the person who’s trying to scam you, you’re a hot commodity,” Stokes said. “That number is going to be bought and sold a zillion times. And you’re going to be on more lists. So it’s not a good idea to engage.”
And those robo-calls that give the option to opt out of future calls by pressing a number are a ploy. “You press that number, and now you’re on the list because they know it’s a hot number,” Stokes said. So warn your parents to watch out for this trick.
Help your parents avoid telemarketing and spam calls. Your parents
can register their home and mobile phone numbers for free with the National Do
Not €all Registry at donotcall.gov or
1-888-s82-1222 to stop unwanted sales calls. This does not stop political,
charitable, survey, or debt
collection calls. And it doesn’t prevent scammers from calling – only
legitimate telemarketing companies. But because it will prevent legitimate
companies from calling, your parents will know that the calls they still are
getting are likely from scammers.
Your parents might be able to block anonymous calls to their landline (depending on their service provider) by picking up the phone and dialing
*77.11 To remove the block, dial *87. They can download a free mobile app such as Hiya to help identify and limit spam calls to their cell phones, or contact their cell phone service provider to see what call blocking options it provides.
Warn them about unscrupulous financial professionals and risky investments. Just because someone is a financial professional doesn’t mean that person will act ethically. That’s why it’s important to talk with your parents about the importance of working with a financial professional who will work in their best interest. Most, if not all, will claim that they work in the clients’ best interest, but only those who are fiduciaries are required by law to do so. Fiduciaries are advisers who typically operate on fee-only or fee-based (fee and commission) compensation and include Registered Investment Advisers (RIAs)12 and €ertified Financial Planners (€FPs).1s Non-fiduciaries such as brokers and insurance agents can be paid by commission on the products they sell and must adhere to a suitability standard, which requires them to make suitable recommendations but doesn’t require them to put clients’ interests above theirs. You can help your parents check the background of financial professionals with the Financial Industry Regulatory Authority’s Broker€heck at www.finra.org.
Regardless of whether the financial professionals your parents work with are fiduciaries or non-fiduciaries, you should encourage them to ask questions such as what licenses they hold, whether any disciplinary actions have been taken against them, how they get paid, and whether they can provide references. If the professionals can’t provide clear answers, that should raise a red flag. AARP has a sample script and questions your parents can use when meeting with a financial professional at www.aarp.org/interviewanadvisor.
Also alert your parents to investment fraud red flags such as a
promise of guaranteed high returns with no risk, complex investing techniques
that the professional can’t clearly explain, or securities that aren’t
registered or don’t have documentation that can be reviewed for more information.14 The
Securities and Exchange €ommission provides detailed information about
investments that are marketed to seniors and how to avoid fraud at www.investor.gov/seniors.
Help them monitor their financial accounts. Recommend to your parents that they set up online access for all of their financial accounts if they haven’t already. They might balk because they think it’s risky. But it’s actually riskier if they don’t have online access to their accounts, Stokes said. “When you have that access, you can regularly see what’s going on in those accounts and identify fraud,” she said. “If you don’t set up electronic access to your account, a scammer potentially can have the only electronic access to that account.”
AARP has received reports of scammers who have used other adults’ personal information to create online Social Security accounts because the victims hadn’t already set up accounts. Then the thieves steal benefits by changing bank routing numbers for deposits. You can help your parents set up a “my Social Security” account by going to www.SSA.gov/myaccount. Not only will this prevent thieves from setting up accounts in your parents’ names, but also it will allow them to keep tabs on their benefits and see how much they will get if they aren’t already collecting Social Security.
Be sure to caution your parents to use different and strong passwords with a mixture of upper- and lowercase letters, numbers, and symbols for each of their online accounts. They could create a list of those passwords (and stash it someplace safe) or use an online password manager program such as Dashlane, which also generates strong passwords for users. It has both free and paid versions.
Also encourage your parents to set up alerts on their bank and credit card accounts (or help them do it). Most financial institutions allow account holders to sign up to receive text or email messages to be notified of activity on their accounts. These alerts will help your parents identify fraudulent use of their cards immediately if they see that there are transactions that they haven’t made. It only takes a few minutes to log onto online bank and credit card accounts to set up these alerts.
Help them check their credit reports. Your parents could already be victims of fraud and not even know.
One way to find out is to have them check their credit reports, which will show
all of the lines of credit opened in their names. If they’ve been victims of
identity theft, there might be accounts in their names that they didn’t open.
€onsumers are entitled to a free copy of their credit report every year from each of the three credit bureaus – Experian, Equifax, and TransUnion.
These reports are available at www.annualcreditreport.com. You can offer to help your parents download their reports from the site and check them for wrong amounts on accounts or for accounts they didn’t open.
If they find suspicious accounts, tell them to contact the credit bureaus using the phone numbers listed on their credit reports and ask for the fraud departments, which can help walk them through the steps they need to take. They also need to contact the creditors to let them know that fraudulent accounts were created in their names. And report to local law enforcement that their identities were stolen. They should ask for a copy of the police incident report because they might need it when disputing fraudulent accounts. Your parents also should put a credit freeze on their credit reports with all three bureaus. This prevents thieves from opening accounts in their names because lenders can’t authorize new lines of credit without seeing their credit reports first. The can put a credit freeze on their reports for free (and lift the freeze if they want to apply for credit) by visiting the websites or calling the three credit bureaus.