Steps to prevent fraud: How to protect your loved ones from financial scams
Scam artists often target older adults, partly because they have amassed greater wealth
When a scam artist called Cameron Huddleston’s mom to tell her to wire money in order to claim a prize, Huddleston had to intercept the calls. Her mom, who had been diagnosed with Alzheimer’s, was convinced she had to wire the money as soon as possible.
“That was a wake-up call for me. If you have any cognitive decline, you don’t see those red flags anymore,” says Huddleston, who lives in the US and is the director of education at Carefull, a service built to protect aging adults’ daily finances. She also wrote the book 'Mom and Dad, We Need to Talk', on how to have important conversations about money with your parents.
Scam artists often target older adults, partly because they have amassed greater wealth. “If you are thinking from a criminal’s perspective, which target will give you the greatest returns: a broke 20-something who is struggling with student loans or a baby boomer with a couple million dollars of retirement assets?” asks Marti DeLiema, a US-based assistant professor of social work.
According to regulators, consumers age 60 and older filed 467,340 fraud reports in 2021, reporting total losses of more than $1 billion (Dh3.67 billion). Overall, consumers age 60 and older are less likely to report losing money to fraud than those age 18-59. But when they do report a monetary loss, it tends to be for more money — especially among those 80 and older. They had the highest median loss of all groups, at $1,500. The regulators report that older adults are more likely than younger adults to lose money on scams involving tech support, prizes, and family and friend impersonation.
“Talking about scams can be one of the easier conversations because we’re all targeted,” Huddleston says. And you can use your own experiences or trending news to put it out there.
DeLiema says explaining specific scams — such as a stranger reaching out over social media saying they want to be friends then asking for money, or fake text messages claiming to be a grandchild who needs immediate help — can greatly reduce the chances that someone will fall for them. “If you know about the scam first, you’re 80 per cent less likely to respond,” she says.
Lean on anti-fraud tools
A few simple steps can help avert fraud, such as setting phones to send unknown numbers to voicemail, using a credit freeze, and setting stricter privacy controls on social media, says Amy Nofziger, director of fraud victim support at a US-based awareness organisation. “These are things we should all be doing,” she says, adding that you can set this up for yourself at the same time.
It’s also relatively easy to sign up for financial account monitoring or to receive alerts for every transaction, Huddleston says. In some cases, it could make sense to allow adult children to also monitor those accounts, depending on the parents’ comfort level and support needs.
Legal tools such as a durable power of attorney, a guardianship or a revocable trust can be among the most effective ways to keep a loved one’s money safe from scammers, says James Ferraro, a vice president and trust counsel at Argent Trust Company, a wealth management firm headquartered in the US.
Scammers are adept at creating a false sense of urgency, Breyault says, telling their targets that they must send funds immediately or the authority will come. “They are incredibly inventive,” he adds, noting that methods and techniques are constantly evolving. Some regulators report that scam artists are even using artificial intelligence to mimic voices. If fraud does occur, help the authorities track and prosecute it by reporting it, Nofziger says.