In the era of website hacks and breaches, protecting yourself from financial and online fraud can be a challenge regardless of your age. But for older Americans with little digital or online experience, spotting and avoiding bad actors both on and offline can be particularly difficult.
If you have older parents or relatives, learn how you can help them avoid fraud by heeding the tips and advice from UBS Deputy Head of Fraud Risk Management Jamie Howard.
The scale of financial fraud for aging adults
Fraud has been a problem for years, but the Internet age brings about new challenges. The American Journal of Public Health found that one in 18 cognitively intact seniors is affected by financial fraud or abuse each year.1 The growing problem costs older Americans over $36 billion per year, according to a study from True Link Financial.2 The problem is so rampant that the FBI has a dedicated effort↗ toward protecting aging Americans from scams.
Howard spends his days combating fraud and helping UBS clients understand their role in protecting their finances. He shares that “grandparent scams” from telemarketers are one of the most common sources of elder fraud today. For instance, a grandparent’s phone may ring and the voice on the other end could say, “Hey grandma, it’s me, I’m in real trouble overseas,” and ask the grandparent to wire funds, Howard explains. The fraudster uses social engineering and emotion to convince the grandparent to send off the money, never to be seen again.
In these cases, the grandparent often feels proud that he or she was called and not the child’s parents, who the grandparent often won’t bother calling to confirm the story. The grandparent then sends a bank wire or prepaid cards for as much as $5,000, $10,000 or even $15,000, “and that money is sent, and there is no way of getting it back,” Howard says.
Make yourself aware of common scams
The grandparent scam is just one of many possibilities for fraud. If you want to protect your parents, you have to know what to look out for yourself. From e-mail phishing, to telemarketing scams, to identity theft from paper documents, brush up on “Fraud 101” so you know the most common scams and how they work.
These scams can be very complex and convincing. Howard shares the story of a recent fraud case in which a contractor who was hired by an insurance company took an opportunity to rifle through the owner’s papers and came back to the home posing as an FBI agent looking to “sting” her financial advisor. The fake agent left with enough information to wipe out her accounts.
It’s also worth noting that some scams are seasonal, such as these holiday scams that commonly target the elderly.
Educate your parents on red flags
You can’t peer over your parents’ shoulders every minute, so it is important that they understand what to look out for as well. Howard suggests adult children and parents “have a good understanding of their situation, so that when something happens that seems out of the usual, [they’re] aware of it and can discuss it.”
You can also take advantage of a long-time UBS program that recently became law in the United States: acting as a trusted contact person on someone’s financial accounts. “A trusted contact person has no ability to authorize disbursements and is not listed on the account or able to conduct activity on the account, unlike a power of attorney,” says Howard. “It is someone the branch can reach out to when they suspect either abuse or they are dealing with a client who is vulnerable. They can [say] to a relative or a friend ... ‘Hey, is everything OK? Because we are seeing certain signs of activity that just don’t seem normal for that person.’”
Also keep in mind that older women are more likely to be targeted for fraud than men, according to a study by MetLife.3 In addition to account monitoring and acting as a trusted contact, it is vital you help your parents know what to look out for and when to say “no.”
Combat fraud as a team
Fraud can rear its ugly head any time and any place, and you can help better prepare your parents to respond. If you work together and stay educated, you can take strategic and preventive steps to protect your family. Whatever you do, don’t wait for a problem to arise before you act. Help your parents today to avoid losses and trouble in the future.
Are you doing all you can to protect and grow your family’s wealth for years to come? Together we can find an answer. Connect with your UBS Financial Advisor or find one.