11 Mar Safe Banking for Seniors
By Sam Kunjukunju, Senior Director, Bank Community Engagement, American Bankers Association
We’ve seen crisis after crisis in the United States, from freak weather patterns to a world-wide pandemic, but there’s another equally damaging one threatening older Americans across the nation. Elder financial exploitation has been characterized as a ‘silent epidemic,’ resulting in billions of dollars in losses each year. Defined as the “illegal or improper use of an older adult’s funds, property, or assets,” an estimated one out of every five elders is a victim of this egregious crime.
In addition to massive fiscal losses that may range upwards of $120,000 on average per victim, elder financial exploitation often takes an emotional toll. Victims experience intense feelings of fear, shame, anger, worry, and helplessness. They may also lose their homes, all of which may increase their risk of early death.
But, fraudsters don’t care. They’re well aware that elders have had a lifetime to acquire assets, have access to a regular stream of funds through Social Security or retirement accounts, and generally have higher net worths than younger demographics. So, while we’re all working on physically distancing, they’ve been diligently attempting to invade bank accounts and steal personal information.
Popular scams often start with a call, email, or text. Common examples include:
- Lottery scams – you learn that you won a prize or gift, but you have to prepay taxes or pay some other fee to receive your winnings.
- Grandparent scams – you receive an urgent call from someone claiming to be a family member, such as a grandson, indicating that he was in an accident or is hospitalized and needs you to wire money over immediately. He’ll also ask you not to tell anyone so he doesn’t get in trouble or say there’s a gag order involved.
- Charity scams – someone contacts you with an urgent plea to donate to a ‘good cause.’ Sometimes the request is a little more than a sad story with a carefully chosen name. Many impersonate organizations representing veterans and other fake groups pop up after disasters.
- Government imposter scams – scammers reach out and say you didn’t appear for jury duty, your Social Security/Medicare benefits have been suspended, or that you owe back taxes and you must pay a fine immediately or you will be arrested, deported or lose your benefits.
- Romance scams – these often begin online where fraudsters profess love quickly. They claim to be American, but are abroad due to business, military service, or a lock down. They will fake plans to visit, but it won’t ever work out due to some contrived emergency. As a result, they’ll take advantage of your kindness and convince you to send them your hard earned money.
- COVID scams – scammers promise that if you pay them they can place you on a list to get the COVID vaccine quickly or they may say you can receive a home test kit, but they require your social security number.
Scams typically have several common features. They generally require immediate action. Scammers tend to insist on secrecy. They claim that money is required upfront and ask you to send it through hard to track payments, such as: cash, gift card, cryptocurrency, money order, peer-to-peer payments (e.g. Zelle, Cash App) or wire transfer.
Some key things to remember to protect yourself:
- Never send money upfront.
- Assume that any attempt at secrecy is a ploy to deceive.
- Always confirm all stories and research charities – be sure to look up phone numbers and check credentials. Websites such as the Better Business Bureau and Guidestar are helpful in reviewing companies and non-profits respectively.
- Don’t trust caller ID, it can be faked.
- Be suspicious of any call from a government agency asking for money or information.
- Regularly review your bank and credit card statements and report transactions you don’t recognize to your bank immediately.
- If you spot a scam, report it to the FTC or the FBI.
Interested in learning more? Through the ABA Foundation’s Safe Banking for Seniors program, banks host sessions with elders and their families on how people can protect their financial assets. Interested groups, such as senior centers, faith-based ministries, non-profits, and others can request free banker-led presentations. Visit www.aba.com/FinEdLink today for more information.