It may start out as a phone call, text, email, or message on social media like my uncle got last spring. Someone may claim they are from the FBI, the Treasury department, or your bank. Or you could receive a notification: "Congratulations! You've won a prize. But first, you need to pay taxes up front to receive your winnings." Scams targeting Americans 60 and older resulted in over $3.4 billion in losses in 2023, an 11% jump from the previous year, according to the 2023 FBI Elder Fraud report.
In 2023 the FBI said the top types of elder fraud included:
- Tech support scams
- Personal data breaches
- Confidence and romance scams
- Non-payment and non-delivery scams
- Investment scams
Frauds and scams can happen at any time, and older adults could be even more vulnerable due to cognitive decline, social isolation, and less familiarity with technology. I know this first-hand because it happened to my mom. Today more than ever, it's important to know the red flags and to talk to your parents or other elders in your life about how to help protect their assets.
Five ideas on how you could help keep your parents' (and your own) assets safe
1. Talk to your parents and educate yourself about imposter fraud
Imposter fraud happens when bad actors impersonate people or organizations you would ordinarily trust. The fraudsters could reach out with an unsolicited phone call, email, or text, and could even use a company logo to mislead you into thinking a communication is legitimate. Talk to your parents about these types of scams and share specifics and stories. It's important for everyone to have awareness of how these things can start. Here's a few examples:
- Technical Support: A criminal reaches out claiming to provide customer, security, or technical support or service to defraud victims.
What to do: If your parents get an unsolicited call offering to fix a computer problem, tell them to hang up immediately. Companies like Apple and Microsoft will not contact you for tech support unless you've requested help, and they won't ask for personal information. - A contest or inheritance: A person contacts your parents with a claim that they are a winner of a prize or the beneficiary of a recently deceased "relative" they've never heard of. Your parents are informed that they must transfer money to collect the prize or inheritance.
What to do: That's a warning flag. Never send money to collect a prize or to obtain an inheritance. - Romance: Be suspicious if an individual your parent met on a dating or social media website wants them to purchase gift cards or virtual currency or wants them to send or transfer money.
What to do: Be cautious. Talk to your parents about never sending money to someone they don't know or someone they've only met online. - Government employees: Imposter scams could even include criminals contacting your parents falsely claiming to be government employees and saying something bad could happen if they refuse to do what they say.
What to do: Do your research and verify. Before committing to anything, contact the organization through an official channel, like a phone number listed on a legitimate government website.
2. Consider adding a trusted contact on financial accounts
Adding a trusted contact to your parents' financial accounts allows a financial firm to move more quickly when addressing suspected fraudulent activity. Designating a trusted contact provides another layer of protection to help your financial institution keep accounts safe.
3. Warn your parents and others about clicking on suspicious links
Warn your parents about clicking on links sent through social media or text unless they're confident they're real. This is how fraudsters scammed my mother—more on that below.
Beware of phishing websites. Criminals could design websites to mirror a financial institution's page, which could be found through a search engine online. When someone tries to log into the scammer's fake website, they could receive a pop-up saying there's an issue with their account and a phone number to call to resolve the issue. This phone number is not associated with the financial institution, so the person ends up talking to a fraudster impersonating an employee. The fraudster makes a claim that the account has been hacked and they need to gain access in order to protect the person. Then the criminal tries to get the person to download remoting software which allows the fraudster to see that person's screen. The scammer tries to get the victim to provide their login credentials, then the criminal could begin moving money out of the account.
To help protect yourself: Instead of searching for your financial institution in a search engine, type in the company's URL to help ensure you are going to the legitimate website.
4. Be wary of urgency and pressure tactics
Consider talking to your parents about being cautious with communications urging immediate action or pressuring them to invest quickly with promises of guaranteed or unusually high returns. Last spring, my uncle started getting rapid messages on social media that he needed to join a group to start receiving day trading tips. The messages indicated that very public figures on Wall Street would tell him exactly when to buy/sell certain investments. There were so many red flags, and fortunately, he contacted me to verify the validity of the messages rather than acting on them. Remember, if it sounds too good to be true, it probably is.
5. Remind your loved ones to protect sensitive information
If someone asks your parents for their bank account number, their Social Security number, or their one-time password—that's a red flag. Remind your parents to never give sensitive information over the phone, email, or text message unless they are sure they know who they're dealing with. And be skeptical of anyone requesting that you share your one-time password, as criminals may be requesting your code so they can login and access your money.
My first-hand experience with phishing and elder fraud
When we first noticed my mom's dementia issues, my sister and I knew we had to jump right in and make sure things were in order, which included reviewing her bank accounts. We noticed a lot of random subscription charges for $20 to $50 per month, and we didn't recognize any of the payees. My sister and I quickly realized our mom was getting scammed. On her cell phone, she was getting over 100 texts per day with messages like: "Hey Carolyn, your $15,000 IRS check is ready. Click here to get it. Put in your Social Security number." She is very trusting and began engaging by clicking the links in the texts, which then signed her up for subscriptions and memberships that chipped away at her account balances.
My sister and I had to dedicate countless hours over several months to calling and threatening legal action for each subscription. In the end, we got back a lot of the money. However, we could not control the amount of text spam she was getting every day. We also could not prevent her from clicking on the links, due to her dementia. We ended up changing her cell phone number and then eventually transitioned her to a landline. We still monitor her accounts very closely.
Stay informed, stay protected
Technology is making huge advancements that can make life easier for us. But at the same time, fraudsters are also becoming more sophisticated in how they try to get our money. Whether you're concerned for yourself or a loved one, share these ideas and encourage everyone you know to protect themselves in the face of increasing financial fraud.
Want more ideas on how to keep your accounts safe? Visit us at schwab.com/schwabsafe for how-to guides, videos, and more information to help you stay safe online. We're committed to your security.
The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.
All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness, or reliability cannot be guaranteed.
Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.