on July 24, 2018
Although there’s been a lot of great financial news lately, the sad reality is that many people are losing large portions of their wealth…and it’s probably not due to the stock market. Many people—especially senior citizens—are falling victim to financial scams. In fact, in 2016 alone, victims of fraud lost $3 billion. That’s billion with a “B.”
That number is likely even higher, since many of these scams go unreported (likely because the victim is embarrassed to admit that they’ve been cheated).
The saddest part?
An estimated 60-80% of financial scams are conducted by a member of the victim’s own family, or by someone they know. We would all like to think that we can trust others (and, for the most part, we can!), but there will always be a few bad apples out there who would rather steal and trick their way out of money issues, rather than work hard and invest wisely.
While this may seem like a dire situation, our nation has made some recent progress toward fixing the issue. This past May, the Senior Safe Act was passed, which encourages financial service providers to report suspected financial abuse through the promise of immunity. In the past, financial service providers had their hands tied and could do little to report such abuses. That was unfortunate, since these providers are usually the first line of defense when it comes to noticing anything fishy going on (unusual/frequent withdrawals or, perhaps, other individuals immediately pocketing the withdrawn money).
The new law doesn’t add any additional punishment for fraudsters, but it is an important first step. Several financial institutions are already training their staff on how to spot elder financial abuse and, hopefully, this will help curb the rampant exploitation we’ve been seeing in recent years.
Aside from informing your loved ones about this new law, it’s a good idea to talk to them about phone and mail scams. In some cases (especially if the senior citizen suffers from dementia or a similar ailment), you may even want to set up strict withdrawal limits on their bank accounts, or provide them with a debit card with low daily limits.
Don’t forget to regularly call or visit your loved ones and check up on them. By regularly asking questions and getting a feel for their day-to-day life, hopefully you’ll be able to sniff out a scam before it gets out of control.
Above all, let the senior citizens in your life know that they are loved and supported. If they know you have their backs, they’ll be more likely to confide in you if they think they’ve been duped.
How about you? What are some of the strategies you use to avoid scams?