7 Common Financial Scams Targeting Retirees and How To Avoid Them

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Government agencies are hard-pressed to not only regulate and prosecute cyber crimes and online scams, but also keep up with the rampant evolution of technology at large. Sadly this use of technology for fraudulent behavior tends to aim at a specific demographic — seniors.

Scams targeting seniors and retirees are unfortunately rife for profit. Grandmothers who aren’t tech-savvy may hand over their credit card information or Social Security number. Grandpas may click on phishing emails that install malware. Either way, some of the most common tech support scams that target the elderly could also fool younger generations — so it’s helpful for everyone to be aware.

Whether a con artist is looking to target older adults or other family members, it’s important to protect yourself and your loved ones from some of the most common scams out there. Here are seven you should know about, as well as how to recognize them and who to contact if you need help.

Government Impersonation Scams

In a government imposter scam, someone calls or emails claiming to be from the Internal Revenue Service, Social Security Administration (SSA) or Medicare. Those posing as an IRS agent may insist that you pay a tax bill or go to jail. If they claim to be from the SSA or Medicare office, they will ask for personal identifying information, which they can use to open credit cards in your name.

Government impersonation scams, sometimes called government imposter scams, can happen to anyone. The FTC receives hundreds of thousands of reports of government imposter scams, leading to losses of hundreds of millions. They can happen to anyone, but often happen to older adults on Social Security or Medicare.

These government offices will never call or email you with urgent matters like this. If someone calls claiming to be from the IRS, SSA or Medicare, hang up and report the phone number to the FTC. If you don’t use a cell phone, make sure to add a caller ID feature to your landline to avoid any suspicious numbers.

Sweepstakes Scams

Older Americans may remember the Publishers Clearing House sweepstakes, which has been around since 1967. PCH still gives away millions of dollars per year. However, with this magnitude of generosity also comes people looking to take advantage of hope and steal a few bucks posing as PCH. This is a bit more targeted at retirees or older people as they use analog forms of communication for often. 

Scammers in this case might call and ask for personal information, or say that you won the sweepstakes, but must first pay taxes and fees. PCH never calls winners. If you receive a letter or email from PCH, you should call PCH customer service at 800-459-4724 to find out if you really won.

Robocall Scams

Americans of every age have received calls trying to “reach you about your car’s extended warranty.” Most people know not to fall for this robocall, but what if you received a call and the voice only said, “Can you hear me?” 

You might respond, “Yes.” If you do, the scammer can make a recording of your voice and then use it to authorize charges on a stolen credit card.

Other robocall scams are simply sophisticated government impersonation scams, using a recorded service instead of a human being on the other end of the line. Either way, try not to say anything to a person (or robot) on the phone who you don’t know or trust.

Grandparent Scams

A grandparent scam is another type of phone scam. Instead of posing as a government authority, the caller poses as a loved one of the victims (usually elderly grandparents). The caller will make up a bizarre story about jail, an accident or being stranded in a foreign country, and request a wire transfer of funds.

These scams are even more frightening today. Voice cloning technology is so convincing now more than ever, and it’s enabling scammers to pose as the victim’s loved one. In a variation of this scam, the person will send a direct message via Facebook or Instagram.

If you receive one of these alarming calls or messages from someone saying they are your grandchild or another loved one, hang and call their actual phone number. You are likely to find they will answer and say they are just fine … and you just avoided a major scam.

Living Trust Scams

Many seniors believe that a living trust should play a large role in estate planning. A living trust can enable a trusted person to help you manage your finances as you get older. But it’s not necessary to avoid probate, reduce taxes, or avoid the costs of giving someone guardianship of you and your money if you become incapacitated.

However, some disreputable law firms attempt to sell living trusts to seniors at prices ranging from $500 to $5,000 and up through high-pressure sales tactics. Speak to a trusted attorney regarding estate planning to determine if a living trust makes sense in your situation.

Phishing Scams

Phishing scams take many forms. They can be emails, such as those asking to reset your Amazon password but you can tell the email didn’t come from Amazon. They can be phone calls or robocalls, asking for personal information. Or they can be Facebook messages from a scammer posing as a trusted friend.

Again, if you aren’t sure, hang up the phone or log off the computer and call your friend directly. Never click on the link in a text message or the website link from those messages, even if they claim to be a company you’ve done business with. Always visit the company’s website directly by typing the address in your browser to find out if there is a problem with your account or password.

Sweetheart Scams

As older adults embrace online dating, it sadly leaves them open to scam artists. The problem worsened during the pandemic when people couldn’t leave their homes to meet in person. As a solution to loneliness, people turned to online dating, which is where the sweetheart scam (aka romance scam) can get you. 

The bottom line is you shouldn’t believe people asking for money on the phone or over the internet, regardless of how convincing they seem or how cute their profile pictures are. Chances are everything is fake, from personality to face. 

Dawn Allcot contributed to the reporting for this article.

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