Wealth Planning

How to Protect Your Elderly Loved Ones from Financial Scams

Scammers often manipulate seniors by taking advantage of their desire to have a good retirement or to take care of their family members.

The elderly lose almost $3 billion every year to scammers. Financial scams targeting seniors have become so prevalent that the question is not whether your parents will be contacted by a scammer, but when — and whether they will be able to recognize the threat. 

Financial scams often go unreported and can be difficult to prosecute, so they are considered a low-risk crime. However, they are absolutely devastating to older adults, often leaving them in a vulnerable position with little time to recoup their losses. It is not always strangers who commit these crimes, either. More than 90% of reported elder abuse is committed by family members.

Scammers are always coming up with new tactics. They often rely on seniors’ desire to have a good retirement or to take care of their family members.

Many of the current scams targeting seniors fall under the broad “impersonator” category, in which the scammer pretends to be someone to gain trust or scare the victim into action.

Among the most common scams: 

The Grandparent Scam: This happens when a scammer pretends to be the victim’s grandchild. The scammer will often make up a distressful situation and ask for financial assistance. To avoid raising suspicions from other family members, they will ask you to keep everything a secret. This is such a devious approach because it preys on one of older adults’ most reliable assets: their hearts. 

Online Romance Scam: These scams occur when someone builds an online romantic (or platonic) relationship with you while using a fake identity and then starts asking for money. The scammers might create complete social media profiles and have full backstories for their identities. It may be a long con game, taking weeks or months to get to know you before asking for anything. The scammers may ask you to invest in a business, send them money or help a family member who is sick in the hospital. Like the grandparent scam, they want you to keep their request for money a secret. 

Texting Scam: Fake text messages have been on the rise since the pandemic. These scammers try to trick you into believing you are communicating with a legitimate representative of Amazon, Apple, PayPal, Netflix or another online company. They tell you that your account has been compromised, suspicious activity has been tracked or a package is delayed. Once you click the link, they try to obtain your valuable personal information and even your credit card information. 

Medicare Scam: These scams target Medicare beneficiaries by claiming to be a Medicare representative and asking for personal and medical information. Once they obtain your information, they will then use or sell it to identity thieves. Every U.S. citizen over the age of 65 qualifies for Medicare, so there is rarely any need for a scam artist to research what private health insurance company older people have to try to scam them.  

Internet or Phishing Scam: Similar to the texting scam, older people are easier targets for automated internet scams. Pop-up browser windows simulating virus-scanning software will fool victims into downloading a fake anti-virus program or an actual virus that will expose whatever information is on the computer.

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Giving your parents stern warnings or demanding to take over their finances may seem like the way to go, but often those tactics come with emotional fallout. Threatening your parents’ independence may play right into scammers’ hands; victims often don’t want to admit they were wrong because they may feel ashamed or vulnerable and don’t want to appear that they are unable to take care of themselves.

So how can you help? 

• Don’t just tell your parent to hang up or throw out the letter. Have a talk about why. They may need help identifying red flags that seem obvious to you. For example: You didn’t win the Ed McMahon sweepstakes. You don’t have to pay a fee for winning the lottery. Government agencies don’t make unsolicited calls and ask for personal information. 

• Do not shame or blame them. Remind them what they taught us years ago: Don’t trust strangers, especially those seeking money or personal information. Remind your parents that you are there to help and that they should not feel ashamed. Show compassion during this stressful time. 

• Stay connected regularly. Talk to them about the risks of sharing their personal information online, over the phone or by mail. If they think they have been scammed, have them contact you immediately. They may be embarrassed that this happened to them, but the longer they sit on it, the worse it can get. 

• Set up alerts. They should receive alerts if their account has been hacked or if the bank detects suspicious activity. Discuss having them give you access to view their bank accounts online. 

• Save copies of their correspondence to share with the authorities, the bank or credit card companies. 

• Teach good digital hygiene. Show them how to spot suspicious emails, texts and websites. They should look over the messaging and the website to make sure it is legitimate.  

• Un-list your parent’s phone number so scammers can’t get it. At the same time, put your parents’ address on opt-out lists with the Direct Marketing Association

To our clients: Please know that we are here to help, too. As your fiduciary, if we recognize any signs of elder abuse, we will notify Kestra, who will in turn notify the proper federal agencies. We are on your team and are ready to help without judgment. We can help buffer with the family and have the conversation in a safe environment. 

We ask that you share this article with your friends and family members in the hopes that your loved ones will not get scammed and will avoid the headache and embarrassment that affect so many.

The CD Wealth Formula

We help our clients reach and maintain financial stability by following a specific plan, catered to each client. 

Our focus remains on long-term investing with a strategic allocation while maintaining a tactical approach. Our decisions to make changes are calculated and well thought out, looking at where we see the economy is heading. We are not guessing or market timing. We are anticipating and moving to those areas of strength in the economy — and in the stock market. 

We will continue to focus on the fact that what really matters right now is time in the market, not out of the market. That means staying the course and continuing to invest, even when the markets dip, to take advantage of potential market upturns. We continue to adhere to the tried-and-true disciplines of diversification, periodic rebalancing and looking forward, while not making investment decisions based on where we have been.

It is important to focus on the long-term goal, not on one specific data point or indicator. Long-term fundamentals are what matter. In markets and moments like these, it is essential to stick to the financial plan. Investing is about following a disciplined process over time.

Sources: AARP, CNBC

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This material contains an assessment of the market and economic environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources.

Using diversification as part of your investment strategy neither assures nor guarantees better performance and cannot protect against loss of principal due to changing market conditions.

Past performance is not a guarantee of future results.

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment Advisory Services offered through Kestra Advisory Services, LLC (Kestra AS) an affiliate of Kestra IS. CD Wealth Management and Bluespring Wealth Partners LLC* are affiliates of Kestra IS and Kestra AS.  Investor Disclosures: https://bit.ly/KF-Disclosures

*Bluespring Wealth Partners, LLC acquires and supports high quality investment adviser and wealth management companies throughout the United States.

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