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Recently retirees in Colorado Springs, CO received a mailing allegedly from the State of Colorado talking about their recent application for Unemployment Benefits.  Few of the recipients were even working at their age and none of them had applied for unemployment compensation.  The letter went on to explain that if they had not applied to go online and fill out a form to alert the department of a possible fraud.

The link took the person receiving the bogus letter to a website that showed a legitimate Colorado State form that is exactly like the real online form for reporting fraud.  Page two of the form, however, was designed by the scammers to be formatted the same and to ask for social security numbers and bank account information into which the unemployment compensation would have been deposited.

There is no assumption that this scam was limited to Colorado, but it is a prime example of taking advantage of the feeling of responsibility seniors often take for keeping things right and preventing fraud.

Isolation Creates Opportunity

Today, particularly with Covid restrictions, seniors are more and more isolated.  Social isolation is a leading factor contributing to elder financial abuse.

Much of the contact seniors have is by electronic means, whether by telephone, email or Internet.  It sets the stage for the unscrupulous to invade the space without much filtering that might be available with more live interaction with family members or friends.  This is exacerbated when a senior may have any degree of diminished cognitive capacity.  Newfound “friends” can more easily approach seniors with investment schemes and flattery that puts a lifetime of savings at risk.  This situation is potentially made worse when the senior is widowed or divorced.

Perhaps, surprisingly, unsolicited phone calls or emails are not the most dangerous – though they are still frequently used by scammers.  With seniors being more engaged in an online life, scammers have found more success with social media approaches or pop-up messages on websites.

Anyone who promises a high return with little risk is generally not telling the truth.  This is even more evident if it is important to “act fast”.  Acting fast reduces the opportunity for consultation with those who may be more skeptical of the “opportunity”.

One key way to prevent the vulnerable from being exploited is to increase contact.  Frequent phone calls or, better, video chats, go a long way toward preventing strangers with bad intentions from insinuating themselves into your loved one’s lives.

Financial abuse can happen any time during a person’s life.  Scammers, however, find their best opportunities when seniors are most vulnerable.  They often pick up clues to their opening by reading social media or online obituaries.  They even get involved in the lives of seniors by invading senior social and support groups.

Warning Signs

Counseling your senior to avoid being scammed is as simple as listening.  Be on the alert for situations where your senior talks about a new friend who suddenly appears in his or her life.  Listen closely for hints that the new “friend” tries to keep other family members from learning of the friendship or encourages a distancing from family.

More worrisome is a situation where you learn of new acquaintances who are “helping” the senior and, to do so, need financial information and passwords to accounts.

Be on the lookout for indications that your senior wants to suddenly make unexplained changes in estate planning documents or beneficiary designations.  Do not be dissuaded by sounding self-interested if these changes involve your prospective inheritance.

Preventative Measures

One of the best ways to prevent scammers from attacking an elder is to “train” the elder to make distinctions between legitimate senior advisors and new “friends” and scammers.

  1. It is never too late to learn. A good project for those who have the time is to learn all they can about finances and investments.  There are many good websites that do this but stick with the known providers of information.  The more marginal sites are where scammers lurk.
  2. Encourage conversations with family and friends or professional advisors about any prospective decisions.
  3. Learn how to do a website search to investigate “opportunities” that are offered. For those who are not as comfortable with the Internet they should be encouraged to seek help from a family member or friend to thoroughly understand as much as they can about the offer and offeror.  They should be reminded to never invest money unless they fully understand the risks and legitimacy of the individual and company involved.
  4. If you think your loved one has been defrauded, do not allow them to be too embarrassed to seek help and file an official complaint. Complaints can be filed with the SEC, the Financial Industry Regulatory Authority (FINRA) or your state securities regulators.

Education, communication and caution are the best ways to avoid senior financial abuse.  Be proactive.