CFPB: Money Smart for Older Adults — Fraud Prevention

Money Smart for Older Adults: Fraud Prevention and Protection

Seniors are disproportionately targeted by financial scams. Every year, older Americans lose billions to fraud — from romance scams to fake grandchild emergencies to investment schemes.

Understanding the tactics and protecting yourself is essential.

Common Scams Targeting Seniors

1. The Grandchild Emergency Scam

How it works: You get a call from someone claiming to be your grandchild in urgent trouble — they've been arrested, are in an accident, or need money immediately. They demand wire transfer or gift card payment, often saying "don't tell your parents."

Protection:

• Verify the caller's identity (ask questions only they'd know)
• Never wire money based on phone calls alone
• Tell your grandchildren in advance: "If you ever need emergency money, call me back at my known number"
• Know that legitimate emergencies rarely require wire transfers

2. Tech Support Scams

How it works: Pop-up appears on your computer claiming you have a virus. You call the number, and scammers gain access to your computer and bank accounts.

Protection:

• Real security alerts don't pop up with phone numbers
• Apple, Microsoft, and legitimate companies don't cold-call about viruses
• Don't give remote access to unknown people
• If concerned, call your computer manufacturer's official number

3. Romance Scams

How it works: Someone builds relationship with you online, then asks for money for travel, medical emergency, or business venture. The scammer may ask for wire transfers, gift cards, or cryptocurrency.

Protection:

• Be suspicious of anyone you've only met online who quickly professes love
• Never send money to someone you haven't met in person
• Verify photos (reverse image search on Google)
• Know that legitimate dates don't ask for money

4. Fake Grandparent Loans

How it works: Someone claiming to be a grandparent or family member asks you to provide a loan, saying they'll repay it. After you send money, they disappear.

Protection:

• Verify identity before sending any money
• Legitimate family would call other family members, not you alone
• Be suspicious of unusual requests

5. Charity Scams

How it works: Scammers solicit donations for fake charities, especially after disasters. Money goes to criminals, not to help those in need.

Protection:

• Verify charities on Charity Navigator or GuideStar
• Legitimate nonprofits have tax-exempt status (check IRS.gov)
• Don't respond to unsolicited requests
• Be wary of high-pressure tactics

6. Lottery/Prize Scams

How it works: You're told you've won a lottery or prize you didn't enter. To claim it, you must pay taxes or fees upfront.

Protection:

• Legitimate lotteries don't require upfront payment
• You can't win something you didn't enter
• Never send money to claim a prize

7. IRS/Government Impersonation

How it works: Caller claims to be from the IRS, Social Security, or Medicare, threatening legal action unless you pay immediately or provide personal information.

Protection:

• The IRS never initiates contact by phone
• Government agencies don't threaten arrest or demand immediate payment
• Hang up and call the official agency directly
• Report to the Federal Trade Commission (ftc.gov)

Red Flag Behaviors

Be suspicious if someone:

• Asks for payment via wire transfer, gift card, or cryptocurrency
• Pressures you to decide quickly
• Asks you to keep the interaction secret
• Requests personal information (SSN, bank details, passwords)
• Claims to be government/law enforcement/tech support without you initiating contact
• Asks you to send money now and they'll repay later
• Uses high emotional tactics (fear, urgency, love)

Protective Strategies

Financial Safeguards

• Set up alerts on bank and credit accounts
• Use two-factor authentication on online accounts
• Monitor credit reports for unauthorized accounts
• Never share passwords (even with family)
• Limit access to funds by setting transaction limits
• Use credit monitoring services to detect identity theft

Information Protection

• Don't give unsolicited callers personal information (Social Security, bank account numbers, credit card details)
• Be wary of sharing information online (scammers collect personal details from social media)
• Use strong, unique passwords (password managers help)
• Shred financial documents before discarding
• Ask who is asking and why before responding

Relationship Protection

• Verify caller identity by calling back official numbers
• Ask trusted family members before sending money
• Research before investing — legitimate investments don't guarantee returns
• Meet people in person before trusting them with money

What to Do If You've Been Scammed

1. Stop contact immediately — Don't respond or send more money
2. Notify your bank and credit card companies — Freeze accounts if needed
3. Report to authorities:
   • FTC at reportfraud.ftc.gov
   • FBI's Internet Crime Complaint Center (ic3.gov)
   • Local police
   • Your state attorney general
4. Monitor for identity theft — Check credit reports for unauthorized accounts
5. Consider fraud/identity theft protection services

Protecting Vulnerable Loved Ones

If you're concerned about an aging relative:

• Review financial statements together (with permission)
• Monitor for unusual spending or account activity
• Know who has access to their accounts
• Establish a "code word" so they know it's really you calling
• Help them set up alerts on bank accounts
• Encourage them to ask you before making large purchases or transferring money

Resources

• FTC (Federal Trade Commission): ftc.gov — Report scams and get advice
• Adult Protective Services: Investigate elder abuse (including financial exploitation)
• Local police: Report crimes
• FBI Internet Crime Complaint Center: ic3.gov
• AARP Fraud Watch Network: aarp.org/fraudwatchnetwork

The Bottom Line

Financial scams are sophisticated and often target kind, trusting people. Protecting yourself means:

• Staying skeptical
• Verifying identities before responding
• Never sending money based on unsolicited requests
• Asking trusted people before making financial decisions
• Reporting suspected scams

If you're unsure, ask someone you trust. A legitimate request won't disappear if you ask questions.