Safeguarding Against Senior Scammers
“Please help me, Grandma,” a muddled voice that almost sounds like the grandmother’s grandson, Joey, comes through the phone. “I can’t go to mom and dad…you have to understand.”
“Joey,” the grandmother responds, “you don’t sound right, are you okay?”
“No, I’m not okay. It’s a very bad connection. I’m in trouble, please, I need money,” Joey says. Then acting in the haste of a concerned grandmother, the elderly woman gives out her credit card number, and the phone call ends.
The caller was not grandson Joey. He was a criminal scammer who had spent hours before this phone call conversation gathering personal information about the grandmother and her relations through community announcements and obituaries. He’d perfected a muffled-sounding ‘Joey’ voice and used it to successfully scam the unsuspecting grandmother out of untold amounts of money.(1)
In this case, the scammer was a professional criminal. However in most instances in which seniors are scammed, the scamming happens by a financial advisor or investor, blindly trusted by the seniors whom they work with.
Mathisen, who works for the American Association of Retired Persons, contributes the rise of these senior scammers to the recent economy. “Investors may be tempted by opportunities to quickly recover money they lost when the stock market took a hit, and con artists see a great opportunity to hit easy marks,” she said.
The targets of these rising senior scams aren’t necessarily those seniors who aren’t well educated in terms of finances or who keep to themselves and give money to whoever offers them companionship. In fact, the FINRA interviewed fraud victims and found that the most likely senior targets are younger (55 to 65 years old), college-educated, and financially savvy.(2)
If you or your parents are potential victims of these senior scams, there are a few preventive measures you can take. First, as an MSN article suggested, “recognize that age doesn’t necessarily equal wisdom in a financial adviser.” It is natural to trust others of your same age. It is also natural to believe that older financial advisors will be more experienced and more able to help. Jean Mathisen said, “Someone having a financial title with ‘senior’ in it doesn’t mean they’re better advisers. Similarly, someone being your own age doesn’t mean they’re more trustworthy. You’ve still got to double-check any financial adviser’s background and advice.”
Not just with fellow seniors, but with any advisor, you should always check their credentials. As stated by Huddleston, a former Securities and Exchange Commission enforcement branch chief, “Some of these advisers’ titles are fabrications, and others are flimsy. Advisers might qualify to use their titles after only attending a weekend course.”
A third, simple tip is to not attend any retirement-planning seminars that usually include a free meal at a nice local restaurant or hotel. The SEC found in a yearlong investigation of the free-lunch seminars that they weren’t educational events but rather sales presentations, many being led by outright cons. The investigation found that thirteen percent of these sessions were fraudulent, and twenty-three percent of the seminar presenters did not offer suitable advice to seniors.
With the rise of scammers looking to make quick money, seniors must safeguard themselves and their retirement funds against potential thieves. Always check the credentials of your financial advisor, don’t be quick to trust based on age, stick to products that are familiar to you or that you understand, and skip the free lunch – it isn’t worth it.
Posted on March 13, 2012, in Insurance/Financial and tagged elderly parents, financial advisor, preventing scams, protecting assets, scammers, senior scam, senior scammers. Bookmark the permalink. Leave a comment.