Financial Safety Tips for Seniors
As adults age, their risk for being targeted by scammers increases, but that doesn’t mean everyone is bound to experience financial fraud. Knowing scam tactics and fraud warning signs—and how to protect against them—can keep older adults financially safe well into their golden years.
Read on to learn simple steps you can take to protect yourself and your loved ones.
According to the National Center on Elder Abuse, financial abuse alone costs aging Americans over $2.6 billion each year.1
Tips for Avoiding Common Scams
How to Avoid Phishing Scams
“Phishing” is a prevalent fraud tactic where an unsolicited email or caller poses as a financial institution—like a credit card company or bank—and asks you to “verify” your credit account information. Often the calls come from scam phone numbers that look like a legitimate company on caller ID.
Never give out account information over the phone or by email. Always verify the identity of a company and its representatives before giving them any sensitive information. Most legitimate companies will never ask you to verify any personal information by phone or email unless you contact them first.
*Note: See the SafeWise pick for Best Identity Theft Protection.
How to Avoid Charity Scams
Charity phone scams involve someone posing as a representative from a charity and asking for donations or pledges over the phone. Charity scams often pop up following natural disasters, preying on sympathy for victims.
Always ask for donation materials in writing, then make sure the charity is legitimate before you donate. Also be wary of phone calls or letters about pledges or donations you don’t remember making.
How to Avoid Internet Scams
Internet scams use online communications like email, messaging, or even a pop-up on your screen saying a virus has been detected on your computer. It will either try to get you to buy fake antivirus software or have you download software that contains an actual virus, giving scammers access to your private financial information.
Don’t ever give out financial information to someone who contacts you unsolicited, and download items only from trusted sources. Always check the actual email address an item was sent from, not just the displayed name, as scammers often try to make it appear that an email or message is from someone you know.
How to Avoid Financial Theft
Older adults may turn their money management over to a caregiver without realizing the risk. Such situations may lead to draining of bank accounts and other financial mismanagement.
Even if you don’t want to deal with all the details of your finances, it’s smart to keep an eye on things or to choose a trusted individual to monitor bank accounts and credit card bills. If a caregiver has access to your money to purchase necessities, be sure to require receipts.
How to Avoid Funeral/Cemetery Scams
Unscrupulous funeral directors may try to charge mourning family members for unnecessary items, like an expensive casket for a cremation. Other frauds involve scammers who will search obituaries and then show up at a funeral claiming the deceased owed them money and will harass family members for payment.
Planning and paying for funerals ahead of time will not only save you from the stress of such tasks after a loved one’s passing but can also save you from being the unwitting subject of funeral fraud. Wait to settle any financial matters—especially with individuals—until well after a loved one’s passing, and then insist on verifiable documentation before making any payments.
How to Avoid Romance Scams
In these scams, a new romantic partner may ask for a loan with a promise to pay it back, or they may ask their significant other to co-sign a loan or grant them access to their accounts to help with their finances. Such situations often result in theft and heartache.
Keep your finances separate from your partner until you are legally wed, or consult an accountant, lawyer, or other trusted associate before co-signing a loan or making a large purchase with your partner.
How to Avoid Identity Theft
Identity theft is when someone gains access to personal information—Social Security Number, birth date, passwords, credit card information, account numbers—and uses them to make fraudulent purchases or open new credit accounts in someone else’s name.
Guard your vital information carefully—be sure to shred any documents with sensitive information on them, and never give out your information to others. Keep your credit cards and identification in a safe place, and check your accounts frequently for any suspicious activity. You can use a credit monitoring company like LifeLock to send you a fraud alert if suspicious activity is detected. Collect mail from your mailbox promptly, and if possible, use direct deposit for any social security or benefit checks you receive.
How to Avoid Medicare Fraud
Medicare ID fraud is similar to other identity theft: identity thieves will steal your Medicare ID information and either use it to file fraudulent claims for services you never received or to purchase prescriptions to sell on the black market. Medicare fraud also happens when Medicare is billed twice for one service or upcharged, meaning charged for a more expensive service than the one rendered.
Starting in April 2018, Medicare began mailing out new cards to Medicare recipients. The new cards have unique Medicare numbers, rather than Social Security Numbers, to better guard against identity theft. Only give this card to your doctor, pharmacist, or other health care providers, and check your credit report and Medicare statements often.
How to Avoid Emergency Scams or “Grandparent Scams”
In this scam, an older adult receives a call, text, email, or social media message from an individual posing as a younger relative—usually a grandchild, niece, or nephew—needing emergency financial assistance. It’s reasonable to want to help a needy family member, so many aging adults fall for this scam.
No matter how dramatic the plea, don’t act immediately. Always check with other family members or friends to verify the claim (even if the “grandchild” begs you not to call a parent). Ask the caller questions only close friends or family would know, and make sure you know what kind of information about your family is available online.
How to Avoid Investment Scams
Having access to a large sum of money makes older adults a prime target for investment scams. Scammers will invite you to invest money in something that seems legitimate, promise big returns, and then take off with the cash.
Never be rushed or intimidated into a big financial decision. Before you sign anything, ask questions and consult with trusted friends or family members. If a financial adviser discourages you from talking to others about the investment, you should probably walk away.
Which aging adults are at greatest risk for financial crimes?
According to the National Center on Elder Abuse, the following factors are associated with financial exploitation of older adults:
- Not using social services programs
- Needing daily living assistance
- Being in poor physical health
- Being single or widowed
How can I help protect older adults in my life from financial exploitation?
The best financial and identity theft protection is education. Talk with your loved ones about potential scams and financial threats, and make sure they’re aware of the warning signs and what to do if they suspect someone is trying to defraud them.
What should I do if I’ve been scammed or had my identity stolen?
First, put a security freeze on any account you think is compromised. Second, report it to prevent the same thing from happening to others.
Financial scams can feel scary, but learning what red flags to watch for when it comes to finances is key to preventing older adults from experiencing identity theft, credit card scams, and other financial crimes. With enough education and vigilance, everyone can keep their money and their identity safe.
1. National Center on Elder Abuse, “Statistics/Data—Financial”