3 Warning Signs of a Financial Scam

Filed under Estate Planning, Estate Planning Blog, Financial Caregivers | By

Nobody likes to admit they’ve fallen for a financial scam, but the fact is, it’s easier than ever to get caught up in one. This is especially true in today’s all-digital world, where practically every shred of data related to your personal and financial background can be found online.

While no one is forcing you to use the Internet to manage your financial accounts, purchase goods and services, or communicate with the outside world, these days it’s nearly impossible to live your life without the web. This net-based existence can feel somewhat unnerving for those of us who came of age while the tech revolution was already underway, but for the elderly, who lived the vast majority of their lives offline, it can be absolutely overwhelming.

Given their lack of tech experience, coupled with the fact that many of them are undergoing varying levels of cognitive decline and sometimes live lonely, isolated lives, scammers view seniors as easy targets. And many of today’s con artists are so sophisticated, even the most intelligent and educated can be duped.

To protect your aging loved ones (and yourself) from such predators, it’s critical to know the warning signs of financial exploitation. The following are three big red flags to watch for:

1. Unexpected requests
If a family member or friend contacts you out of the blue asking for money, especially via email or text, you should be wary. If the request comes from an unfamiliar email address or phone number, you should be extremely wary. While such requests aren’t totally unheard of, never send money unless you can verify the individual’s identity.

A popular con, known as the Grandparent Scam, involves someone calling and pretending to be your grandchild. The “grandchild” explains he or she is in trouble and needs money immediately. The caller then asks you to wire the money or give it to a third party, usually someone posing as a lawyer or police officer.

No matter how urgent the caller may sound, you should always verify their identity. One of the easiest ways to do this is by having the person call you back on his or her phone. Or if the individual’s phone is dead or lost, you can ask them questions only the actual person would know the answer to, such as the name of their first pet. If they refuse, seem unusually aggressive, or act odd, do not send money.

2. Unsolicited money-making ventures
Whether through a savvy business deal or by winning the lottery, we all fantasize about striking it rich. And if you’re retired on a fixed income, this fantasy can be all-the-more alluring. Scammers know this and will use your dreams of easy money to trick you into investing in a too-good-to-be-true venture that promises big bucks for little or no effort.

There are endless variations on this popular con, from wealthy foreign nationals needing assistance transferring money to more legitimate-sounding business deals offering huge payoffs with no risk. These messages sometimes appear as if they were sent to you accidentally, making it feel like fortune has finally favored you—just like you always dreamed it would.

But in reality, strangers don’t just randomly offer other strangers incredible money-making opportunities. What kind of trustworthy business person would seek to partner with someone they’ve never met? And if it’s such a great investment, why not recruit someone they know or simply do it themselves? Indeed, any unsolicited money-making venture you receive online from a person you don’t know is almost certainly a scam.

3. Requests for personal information
Whenever someone unfamiliar asks you for personal information like a credit card number, Social Security number, or your mother’s maiden name, proceed with extreme caution. Ask them why they need this information. Request they verify their identity. Enquire about alternate methods of proceeding that do not require such private information.

Reputable sources will respect your privacy and be more than willing to provide you with identity verification, or at least offer an alternate way for you to proceed without the need for such personal data. For example, if you receive an email request for your credit card number, look up the organization’s phone number using a source other than what they provide in the email, and ask if you can call and give your information over the phone instead.

Protect your loved ones from all possible threats
By becoming familiar with how such deceptions work and knowing what to look for, you and your loved ones will be far less likely to be conned. At the same time, you should also do everything you can to safeguard your family’s finances from other threats that have nothing to do with fraud.

Without comprehensive estate planning, your family’s wealth and assets are in real danger of being seriously depleted or lost in the event of your death or incapacity. Meet with us to learn about the best planning strategies to put in place to ensure your loved ones will be taken care of no matter what happens.

Dedicated to empowering your family, building your wealth and defining your legacy,