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3 Warning Signs of a Financial Scam
In today’s digital age with so much of our personal and financial information available online, it is easier than ever to fall victim to a financial scam.
From shopping to communicating with our friends and family to managing our business and financial accounts, it is nearly impossible to live life today without using the internet. While this may seem normal for some people, it can feel very overwhelming to the older generation that did not grow up in a digital world.
Given their lack of tech skills, scammers find the elderly to be especially easy targets. However, the elderly are not the only people susceptible to internet fraud. Con artists have become incredibly sophisticated and even the most educated and intelligent people can fall victim.
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 extremely wary. If this request for money comes from an email or phone number that you do not recognize, you should contact your family member or friend directly to verify that they sent the email or text. Never send money to anyone unless you have verified 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. An easy way to confirm that it is your grandchild would be to hang up and contact them on a number you know to be your grandchild’s number or to ask them to call you back from their personal phone. If they make an excuse for why they can’t such as their battery died on their phone or some other excuse, ask them questions that only they would know the answer to, such as their first pet’s name, the name of their elementary school, the last trip you all went on as a family, etc. If they refuse, seem unusually aggressive, or act odd, do not send money.
Outside of relatives and friends, scammers often pretend to be from the IRS or another government agency, demanding immediate payment of back taxes or some other debt. They might even threaten you with arrest, ruined credit, or additional fines if you fail to comply. And if they don’t directly ask for money, they sometimes ask for verification of your personal information or direct you to visit a phishing website that secretly puts data-collecting viruses on your computer.
Whether it is done over the phone, through email, or even social media, the government does not collect money this way. If you receive an email, be suspicious and do not click on any links in the email. Look up the government agency’s number on google or a phone book and call that number, not the one listed on the email. Real organizations have no problem with verifying who they are and they never ask for money on the spot. No matter if it’s a government agency, a financial institution, law enforcement, or a private business, you should always be allowed to verify the legitimacy of the request. You can also consult with a trusted advisor like us before making any financial transaction.
2. Unsolicited money-making ventures
No matter where we are in our lives, we all dream about striking it rich. Especially being retired or on a fixed income, obtaining a large sum of money sounds amazing. Scammers are aware of this and will use this to their advantage, promising a lot of money at very little 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. The way the messages are framed make it seem like they were sent accidentally and you just happened to luck out.
But in reality, strangers don’t just randomly offer other strangers incredible money-making opportunities. If it was such a great investment, why would they offer it to someone they have never met or done business with? It’s safe to assume that any unsolicited money-making venture you receive online from a person you don’t know is almost certainly a scam.
Many such scams originate in foreign countries with people who aren’t fluent in English, so messages with incorrect spelling, poor grammar, and/or unusual phrasing are often a dead giveaway. Other tip-offs include messages containing the following (or very similar) language:
- You’ve won one of several valuable prizes.
- You’ve been specially selected for this one-time offer.
- You’ll get a free bonus if you buy our product.
- You’ve won money in a foreign lottery.
- This investment is low risk and offers a higher return than anything else.
- Our product is free, but we need to put shipping and handling charges on your credit card.
- Advance payments or fees are required to clear the promised funds or complete the offer.
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. Make sure you ask why they need this information, request their identity, and ask about other ways to move onto the request without providing private information.
Reputable sources understand that you would be wary of their request for personal information and will 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. They usually will encourage you to contact their business on their main number found by doing a google search or from your records. For example, if you receive an email request for your credit card number (or any other sensitive information), do not provide it to them via email and do not call them using the numbers listed in the email. Again, look up the organization’s phone number using a source other than what they provide in the email and contact them that way. Let them know you received an email and ask that they verify that it was a legitimate request.
A very popular scam that has been going on is where scammers call claiming to be from the Social Security Administration (SSA), and the number may even come up on your caller ID as the SSA. The caller says your Social Security number has been stolen, used in a crime, or suspended. To protect your funds, they direct you to withdraw the money in your bank account and transfer it to a gift card. The scammers then ask for the gift card PIN number for “safekeeping.” They also may try to get you to reveal your SS number by having you verify it over the phone.
However, the SSA does not suspend your Social Security number, nor will it ever direct you to withdraw money from your bank account. If you are ever told that you must purchase gift cards and then to give out the PIN number, this is absolutely a scam.
Some of today’s most sophisticated scammers don’t even need to ask you for your personal data as they can steal it simply by having you open an email attachment or visit a website that’s loaded with data-scraping bots. Do not open email attachments from strangers, or even family or friends if it looks suspicious. If you receive an email that looks like it’s from a friend or family member but doesn’t sound like it is something your friend or family member would say or it says something like “hey, check out this new site I found” with no other information, do not click on the link or respond. Contact the person you think sent you the email and confirm that they in fact sent you the email. These emails can appear to be leigitimate at first glance, but again, if it seems off or not like something you would expect from a friend/family member, err on the side of caution and verify that it is real. Another tip is to make sure you have set all of your social media accounts to private so that your personal info isn’t public. This includes your date of birth and location. Finally, if you are going to be using the internet, and as mentioned above, it is almost impossible not to these days, make sure your computer has anti-virus and anti-spyware programs installed and set to auto-update to protect your computer from hackers.
Protect your loved ones from all possible threats
Knowing what to look for and by becoming familiar with how such deceptions work, 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 at The Solution Law Firm, P.A. 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 to you.
This article is a service of The Solution Law Firm, P.A. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Planning Session, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Planning Session and mention this article to find out how to get this $750 session at no charge.