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Elder Law Newsletter: Protect the Nest: Avoiding Common Scams Directed at Elders

Chambliss Law Firm Monthly Editorial – August 2018

Protect the Nest: Avoiding Common Scams Directed at Elders

by Cameron Kapperman, Special Needs Planning Attorney

So you've finally done it – after working hard your entire life, you have successfully built up a nest egg and entered those golden years of retirement. You spend your days focused on grandchildren, gardening, and golf, simply enjoying each day with the confidence that your finances are in order. And then one day you respond to an email from the proverbial "Nigerian Prince" and everything changes.

Sadly, according to the National Council on Aging, "financial scams targeting seniors have become so prevalent that they're now considered the crime of the 21st century."1  Indeed, a quick online search reveals countless horror stories of elders being taken advantage of, in some cases to financial ruin. Elders have become identified as "easy targets" for scammers for a variety of reasons, including an ingrained inclination to be trusting of others, low social support, and the cognitive and physical impairment associated with aging, as well as the increased likelihood that a senior will have accumulated some degree of wealth. The following list identifies some of the common scams that elders should be on the lookout for.
5 Common Scams Targeted Toward Elders:
  • Investment Scams: The famous "Nigerian prince" scam involves an email directed at an elder that requests an "advance fee" in return for a larger sum of money down the road. This scam, and others similar to it, typically requests that the recipient provide personal information or banking information so that the advance fee can be processed. While the concept seems crazy, the FBI has reported that millions of dollars are lost every year to scams like this.
  • IRS/Tax Scams: In this scam, elders are sent emails seeking additional personal information to complete their tax filings or threatening recourse for an improper filing.  Frequently, elders are told that their tax filings can be "fixed" by submitting payment via pre-loaded debit card.
  • Online Dating Scams: As people from all age demographics increasingly turn to the internet to meet their significant others, elders must be especially wary of scammers who use fake profiles to build online relationships with the end goal of soliciting money.  Good rule of thumb – if your "significant other" asks for money, you are probably being scammed.
  • Telephone/Telemarketing Scams: Because elders are more accustomed to making purchases over the phone (as opposed to the internet), scammers will frequently try to "sell" you products or solicit donations for charities that don't exist through cold calls.  Indeed, of all the fraud complaints made to the Federal Trade Commission, some 77 percent of them listed the phone as the way that they were contacted by a scammer.2 If someone calls you and asks for your financial information, just hang up – you can always call them back after you verify that the opportunity is real.
  • Grandchild Scam:  One particularly chilling scam involves bad actors calling elders with information that a grandchild or other loved one is in trouble, and that their loved one needs funds for medical treatment, legal fees, or some other emergency. By engaging with elders on the phone or doing some advance research on social networking sites, scammers can typically use names or other personal information that makes the call seem all-too-real. If a stranger contacts you about a family member in trouble, it is always best to verify that information with someone else before acting!

Due diligence represents the best defense to all potential scams. If presented with a situation that doesn't feel quite right, take a moment to pause and think about how information can be researched and verified. Elders can also take additional steps to protect themselves, including shredding receipts and other financial documents that include personal identifying information or credit card numbers, refusing to give credit card, banking, Social Security, Medicare, or other personal information over the phone unless the elder initiated the call, screening telephone calls, and signing up for the "Do Not Call" list.  Additionally, Tennessee law provides several avenues for recourse if an elder has been victimized by a scam or other form of financial exploitation.

Don't let the scammers steal the joy of your retirement – take steps today to educate yourself on the various types of scams and protective measures you can take so that you can ensure your nest egg will be there tomorrow.
If you or your loved ones have concerns about financial exploitation or have questions about asset protection and preservation, please contact a member of our elder law team. We regularly assist clients with protections against elder abuse and can help individuals and families navigate challenging financial situations.