The financial plans you make with your clients help them live comfortable and fulfilling lives well into their retirement years. As your clients age, however, they may become more vulnerable to frauds and scams, which can derail even the best-laid plans. With financial scams taking on more forms than ever before, it is crucial that you help your clients learn about the latest ones and how to avoid them.
Why seniors are targeted
In 2015, 76% of the victims of fraudulent "technology support" firms were over age 50. There are many reasons financial predators target older Americans:
• Seniors are more likely to have accumulated significant savings.
• Many members of older generations have been raised to be polite and trusting, making it harder to fend off scammers.
• Seniors are generally less likely than others to report fraud, either because they don't know where to report it or because they worry that it will indicate declining cognitive ability.
• Some seniors have begun to suffer from cognitive impairment.
If your clients understand the likelihood that they will be targeted and the reasons why they are singled out, they will be more alert to potential scams and potentially less likely to succumb to them.
Types of scams
Many financial scams begin with a phone call from an unfamiliar number. The con artist may offer a product that doesn't actually exist, claim to have found a large sum of money that he or she is willing to split, or solicit money for a fake charity. Callers generally request identifying information or immediate payment, and then fail to follow through on their offers or promises.
One increasingly common scam involves callers posing as IRS agents, claiming that urgent action is needed concerning a tax issue. Some scammers demand immediate payment on phony taxes, such as a "federal student tax," while others ask to verify tax return information or other sensitive personal information. Remind your clients should that the IRS never calls tax-payers to demand immediate payment over the phone, nor will it call about taxes owed without first having sent out a bill.
Other scammers target seniors' computer use. Pop-up browser windows that simulate virus-scanning software can fool computer users into downloading phony anti-virus programs at a significant cost, or introduce actual viruses that give identity thieves sensitive personal information. Other scammers pose as computer technicians from well-known companies, claiming to have found viruses or malware and requesting money or passwords to install software.
What your clients can do
Remaining cautious and alert is the best way for your clients to protect themselves. Tell them that when they are approached by strangers asking for financial or personal information, they should ask questions, do research, and consult with you or with friends and family before proceeding. They should be skeptical of unsolicited offers, especially if they can't find information about the individual or company from third-party sources. Even offers from people they know should be treated with caution, since a good deal of financial fraud is committed by friends, neighbors and even family members.
Encourage them to stay safe online, too. For instance, they should consider signing up for a password protection program that generates secure passwords and stores them in encrypted files. Make sure they also install antivirus and spyware protection on their computers. To stay informed on the latest scams, they can sign up for scam alerts from the Federal Trade Commission (https://www.consumer.ftc.gov/scam-alerts).
A single slip-up can lead to thousands of lost dollars, so encourage your clients to learn about the risk posed by financial scams. This knowledge could make the difference between enjoying a smooth retirement or becoming a statistic in the growing tally of financial fraud victims.
1 https://www.ftc.gov/system/files/documents/public_statements/967033/160629olderamericanstest.pdf
2 https://www.usa.gov/common-scams-frauds
