ARBOR OUTLOOK: Senior scams, Internet privacy and Neil Young
Author's Note: Details on some financial scams were offered by The National Council on Aging
"Old man take a look at my life ... I'm a lot like you;
I need someone to love me the whole day through." — from "Old Man" as performed by Neil Young
Financial scams perpetrated against Americans reached an all-time high in 2018. Seniors are preferred targets for several reasons, a few of which we'll mention momentarily. Here are a couple of typical scenarios.
The "grandchild in trouble" scam is not new, but it's unfortunately very effective. A scammer calls a grandparent and initiates the conversation by saying, "Grandma, do you know who this is?" The grandparent often will offer the name of a grandchild, and the scammer simply says, "Yes, it's me." Then the request for money to be mailed or wired is forthcoming, most often with an explanation about an overdue bill or a car payment. The scammer will also frequently request that the grandparent not reveal the contents of the conversation to the parents.
Seniors often have difficulty hearing on the phone, so it is plausible that they might not recognize the voice of a grandchild. They, however, can combat this scam by simply asking the person who they are, rather than volunteering a name, or by throwing in a couple of personal questions that only the grandchild would know. Grandparents love hearing from grandchildren, and we all inherently want to believe that we are being contacted by a loved one.
Grieving older citizens are especially vulnerable to financial shenanigans. By reading an obituary, a scammer can identify older relatives of a recently deceased loved one. One popular trick involves the scammer approaching the senior citizen and claiming that the departed owed an outstanding debt that must be settled. Older citizens should be very cautious about paying out such claims.
Seniors should also be very wary of responding to requests for personal information, or anything that asks for one's age and contact data, Social Security number or bank account numbers. Establishing and maintaining online privacy regarding one's accounts and information will become one of the biggest challenges in coming years, not only for seniors but for all with financial resources.
Some seniors are fortunate to have a competent and caring child or relative to help them avoid financial misappropriation. But not everyone has a trusted family member and many seniors are alone or lack expert, caring family assistance. Many will wisely outsource some component or all financial oversight duties to a fiduciary to make sure they don't get scammed. If you ever are intrigued by a "double your money in 90 days" type offer, you may want to consult with your trusted financial advisor before proceeding. If it sounds too good to be true, or promises an exceptional, guaranteed return in exchange for the investment, caution is usually called for.
Margaret R. McDowell, ChFC, AIF, author of the syndicated economic column "Arbor Outlook," is the founder of Arbor Wealth Management, LLC, (850-608-6121 — www.arborwealth.net), a “fee-only” registered investment advisory firm located near Sandestin. This column should not be considered personalized investment advice and provides no assurance that any specific strategy or investment will be suitable or profitable for an investor.