In the old days, a scammer might look through a phone book or some other list to identify potential victims. These days, it’s even easier. They can simply search by zip code to discover where the money is and let their mailing or robo-dialing systems do the rest. If you don’t have your own defense system on high alert, the scammers could get your private information—and money—in a matter of minutes. Here’s a quick primer on what to look out for and what to do (and not do) once you’ve spotted a scam.
It’s Official (or is it?)
For “The Greatest Generation” and a good percentage of Baby Boomers, so-called government scams are hard to resist. That’s because they rely on the victim’s instinct to trust authority figures and institutions, whether it’s the IRS, Social Security, Medicare, or similar. This means that if somebody calls you or sends you an official-looking letter from the IRS, you’re likely to pay attention and, unfortunately, let your guard down. Sorry, but scammers know this very well.
None of these organizations will ever contact you and ask you for your numbers. They have them already. An IRS scam will likely threaten you with action if you don’t pay back taxes and penalties immediately. Medicare scams may turn into costly claims associated with your actual account. If any one of these scams succeeds in getting you to divulge key personal info, you could be a victim of even more damaging identity theft as well.
Even Scammers Love Grandchildren
If you haven’t already experienced the grandchildren scam, it works something like this: Somebody calls you and tries to make you think they are your grandchild or that they’re with your grandchild. A fake accident or petty crime requires your urgent attention—and money—to bail them out. And, of course, their only hope is you. They will try to trick you into saying one of the grandchild’s names in order to gain your confidence. Don’t be fooled. Your grandchildren are probably fine. The best defense against this scam is to think of a nickname (code name) and tell every grandchild to use it if they ever do need help. Now, if a suspected scammer calls you, ask them one question: “What’s your nickname?” Case closed.
You’ve Won the Lottery!
First off, if you’re reading this article, you’re probably already in a solid financial position and not the typical lottery-playing type. Second, nobody wins the lottery without even playing. The exception here is infamous mob boss Whitey Bulger. He once “convinced” a lottery winner to sign over his multi-million-dollar winning ticket to him (an offer he couldn’t refuse). In any case, the lottery scam is very much a real threat these days. You’re told that you have magically won some lottery, but to claim your winnings, you’ll need to pay a large fee and/or hefty taxes. As always, if it sounds too good to be true, it is.
But Wait, There’s More!
Scammers are opportunistic, so there’s never a shortage of new or slightly used scams. Here are two more to watch out for:
Reverse Mortgage: A reverse mortgage is a home equity loan that becomes fully due upon the homeowner’s death. Most are legitimate, but there are also scams that want to tap into your equity without getting it back. By the way, if you are considering a legitimate reverse mortgage, please be sure to discuss such a major financial decision with your financial advisor.
Dating Scams: Loneliness tends to make people vulnerable to scams, especially when it follows the death of a spouse (and, not coincidentally, a published obituary). Whether it’s online dating or an in-person suitor that nobody has ever heard of, all these scammers really want is your money.
Your Best Defense
Here are three quick tips to help you avoid falling prey to any of these scams, and some that have yet to be invented:
• Don't give out your Medicare account number, Social Security number, date of birth, or any other personal information such as login information over the phone or via email.
• Keep passwords and even usernames private. Avoid using birthday years or days and other easily guessed words as part of your passwords as well. Again, this goes for sharing information on the phone, via text, or in an email.
• Just hang up. This skill does not come easy for everybody, especially since we’ve been taught that politeness is a virtue. But scammers do not deserve your respect. Every second a scammer keeps you on the phone, the more likely it is that they’ll get you to slip up and give them just the bit of info they need. Here’s a quick way to say good-bye to a scammer: “I don’t trust you. Goodbye.”
If you’re unsure of whether someone is trying to run a scam on you, call your financial advisor to ask them to review the materials or information in questio
One More Thing
“One more thing,” as TV detective Colombo used to say. Scammers know full well that people’s memory tends to fade with age. They take advantage of this fuzziness to trip their victims up. So, if you sense that you don’t have as good a memory as you once did, consider sharing this with your family. Chances are they’ve noticed this already, anyway. But the more people who are on the lookout for you and helping to preserve your family’s wealth, the better.
Disclosure: This information is for educational and informative purposes and shall not be considered a specific recommendation. Readers are advised to speak with their advisor at JL Bainbridge to determine their specific recommendations that meet their investment objectives and to review their portfolios. The material being provided is thought to be accurate. However, the information is compiled from multiple resources and may become outdated or otherwise rendered incorrect by new research or corrections without notice. J.L. Bainbridge & Co., Inc., is not a broker dealer and does not offer tax or legal advice. Please consult your tax or legal advisor for assistance regarding your individual situation. It should neither be assumed that future results will be as profitable or that a loss could not be incurred. For more information related to our firm, please see our disclosure brochures at jlbainbridge.com and https://adviserinfo.sec.gov/firm/summary/108058.
