Ways to Avoid Financial Scams

According to a recent survey, about two-thirds of adults age 70 and older fall for online scammers. Here are some tips to remember about some of the latest frauds:

  • Medicare does not employ “sales representatives.”

  • Apple and Microsoft do not sell virus protection software for your computer.

  • There is no African prince from Nigeria who needs your help (and your money).

Another recent scam hails from people posing as Amazon customer service representatives on the phone. If you Google a customer support phone number for Amazon, there are a lot of fake ones out there. If you call one of the fake numbers, a representative might ask you for your bank account or credit card information. The best way to contact Amazon is via live chat on Amazon.com. If you need the general support telephone number, it’s 888.280.4331.

Be aware that scammers frequently prey on older adults. It’s important to remember that if you didn’t initiate the call, you can’t be sure you’re talking to a legitimate source -- so don’t give out any personal information. Here are some tips from the Federal Trade Commission (FTC) to help deal with potential fraudsters:

  • Don’t give the caller personal information, especially not your bank account, credit card, or Social Security number, unless you’ve verified who you’re talking to. If someone has contacted you, you can’t be sure who they are. It’s better if you initiate the call using the phone number printed on your statement.

  • Don’t trust a name or phone number. Con artists make up official-sounding names to make you trust them. To make their calls seem legitimate, scammers may use your local area code or one from Washington, D.C., so it appears on your caller ID like they’re calling from the government. In reality, they could be calling from anywhere in the world.

  • If you’re ever suspicious about a scam related to your Social Security benefits, contact the Social Security Administration directly at 800.772.1213.

There also are scams that target people on a larger scale. Specifically, some financial services firms have become vulnerable by employees clicking on links provided by phishing emails. Once opened, hackers can use them as a gateway to access the firm’s client database. Recently, this new online financial scam has cost victims an average of about $130,000 per instance.

The Financial Industry Regulatory Authority (FINRA) implemented a new rule starting on Feb. 5 of this year. It gives brokers some protections so they may feel free to report the potential exploitation of an elderly client and even place a temporary hold on any account withdrawals the client may request if it seems suspicious. Furthermore, some states have adopted a North American Securities Administrators Association (NASAA) rule making it mandatory to report a suspicious incident.

There are currently a couple of bills being considered in Congress that would provide liability protection for financial advisers, brokers and other financial professionals who report cases of suspected elder abuse. In fact, one amendment to a current securities rule requires brokers to request that clients provide contact information for a person they trust. This is so that the broker can alert that person if he or she thinks the older client might be a victim of fraud or even poor judgment due to mental decline.



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Raymond C. Lantz, Jr. is the president and founder of USA Wealth Group, Inc. Ray has many years of experience advising clients in retirement and sophisticated tax planning strategies, multi-family and commercial real estate projects, and legacy planning. Ray is a graduate of Clark University, holds a law degree from Boston College, and a master of laws in taxation from Boston University. You can hear him every Sunday on Money Wise with Ray Lantz on WBSM 1420AM or on the Radio Pup app. 


Interested in reading more?  Here are some articles that may be of interest to you:


How can I protect my older parent from online scams?

Amazon customer service scam targets your financial data.

Scammers impersonate the Social Security Administration.

New online financial scam costs victims $130K per attack.

House approves legislation to help advisers combat senior exploitation.

New broker rules aim to curb elder fraud.

 

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