Watch Out for These Scams that Target Retirees
Unfortunately, scams are on the rise. And, even worse, they come in many different forms and often use new technology, like artificial intelligence (AI), to make them even harder to detect.
What’s even worse? Fraudsters target retirees on a regular basis. For example, median scam losses are highest in the above 80 age group, according to the Federal Trade Commission (FTC). Even those in their 50s see median losses of $482 per scam.
You don’t want to put your nest egg at risk because of a scam. Here’s what you need to know about some of the most common scams to be careful of—and how to avoid them.
Types of Scams to Watch Out For
There are various types of scams that you should be aware of. Some of these scams are extremely sophisticated and can be hard to spot. In fact, almost anyone can fall prey to a scam. Here are some common types of scams.
Phone & Text Scams
Through phone calls and text messages, fraudsters hope to convince you to share private and personal information that can help them steal your identity or access your accounts.
Two common phone scams are those claiming to be the IRS or the local sheriff.
In the case of the IRS scam (and other government scams), they might claim that your refund is being held upbecause there’s some type of mistake or that you owe taxes. You provide personal information that is then used to steal your identity. The same type of approach is used with the “sheriff” phone scam, except it’s usually a threat of arrest because you missed jury duty or have an unpaid ticket.
Text scams might start as a “wrong number” but then they strike up a conversation. They might ask you to send money, or they might pressure you to move to an encrypted message app like Telegram or Signal and try to gather more information to further a scam.
Another common scam is to ask you to verify information or report a problem with a package delivery. You click on the link provided, which takes you to a website that can download malware to your phone and steal information. The link might also ask you to enter personal information, like a username and password, to “clear up” the “problem.” Sharing that info will compromise your accounts.
Technology Scams
Next are scams that focus on various aspects of technology to get your information and your money.
● Phishing involves pretending to be a legitimate organization to get you to share login details or personal information. Often, phishing takes place via email, although it can take place via text. Scammers try to get you to click on a link that takes you to a legitimate-looking login page, or they want you to open an attachment that will download malware to your computer.
● Tech support scams revolve around imposters calling you and claiming that there’s a problem with your computer. Another variation on the tech support scam is a pop-up that appears while you’re on the internet, indicating that you’ve been infected with malware or there’s some other issue. You provide information that allows the fraudster to take over your computer, or you give personal details that can be used to get your money.
● Social media frauds try to get you to send money through online connections. They might hack a friend’s account or create a lookalike account. They message you and ask for money or help. Others create fake marketplace listings and hope to collect your money via Venmo or some other irreversible method and leave you hanging.
Personal Connection Scams
Other schemers try to prey on your connections or desire for personal closeness. They might also take advantage of your personal trust in someone who presents themself as a professional.
● Impersonation scams are designed to make you think that someone you know is contacting you. For example, you might get a call from someone claiming to be a grandchild in trouble. They ask for money, which you send. Unfortunately, AI can make these scams hard to detect, as programs can make audio and video seem more realistic just based off of information someone can get on the internet or through social media.
● Investment scams focus on convincing you that you’ve been presented with a great opportunity. These scams are designed to prey on your concern of running out of retirement money and promising high returns for little risk.
● Romance scams involve a bad actor contacting you via a dating app, “wrong” number text message or some other means to form a fake romantic connection. They string you along, making you feel like you have a relationship. Then they leverage your feelings and ask for money. This scam can play out over weeks or even months before they ask for money.
How to Spot and Avoid a Potential Scam
Protecting your nest egg is all about spotting and avoiding potential scams. Once you know the red flags and take steps to protect yourself online, you’re less likely to be a victim.
Know the Red Flags
Start by understanding the red flags of some of the common scam tactics:
● They reach out to you first and request sensitive information.
● You’re asked to pay using methods that are hard to trace, such as wire transfer, cryptocurrency, gift card or payment apps.
● Threats of dire consequences made if you don’t immediately take action.
● You don’t have a relationship with the purported business. For example, you might receive an “invoice” from a company you don’t do business with. When you click to dispute, you enter your details that will be used against you.
● The link you’re asked to click is obscured, shortened or doesn’t match the official website.
Take Steps to Protect Yourself
You can also protect yourself by using the following tips to cut down on scamming and other issues:
● Enable two-factor authentication to receive notification when someone is trying to access your accounts.
● Use a password manager so you can create strong and complicated passwords that are difficult to hack.
● Limit your social media visibility or what you share over social media, so it’s harder for scammers to collect information they can use to seem legit.
● Be suspicious when people ask you to send them money, especially through unconventional channels.
● Research how officials contact people. For example, the IRS won’t call you on the phone if there’s a problem. Instead, they send you official mail. Medicare sends you updated cards without texting you a link to a form.
● Check your credit report regularly to identify potentially fraudulent accounts and report them.
Bottom Line
Anyone can be the victim of a scam. Unfortunately, as a retiree, you are a prime target, especially for various scams related to Social Security, Medicare, investments and impersonation. Be suspicious and stay vigilant to protect your retirement.
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