Unfortunately, in today’s high tech world, not only do seniors (and their loved ones) need to worry about protecting their assets, credit and identity against nefarious online hackers (as the recent Equifax hack proves), but they also need protection against perpetrators who will attempt to steal their private information or even their assets. With time, this issue has gotten worse, and as the baby boomers continue to retire, there is good reason to believe it will become even more prevalent.
In this particular article (part of a series), we explain some of the most common financial capers in today’s (2017) world not involving the internet, taking into account findings by the National Counsel on Aging[1] and Better Business Bureau.[2] We will not only discuss these crimes themselves, but also ways you can protect mom and dad from such crimes. Part II will focus on internet “phishing” scams, and Part III will focus on more personalized scams.
Mail Schemes
Many of us may have received a suspicious piece of mail from one time or another with a message that you have won a prize or have received an inheritance, and the vast majority of us will simply discard such mail without giving it another thought. However, for every 20,000 people who receive such mail, it only takes 15-20 people who look into this scheme further, and only 1-2 people who believe it wholeheartedly. Many times, these mass mailings are even personalized, as the success rate jumps when you see your name next to a large pile of money. Surprisingly, the U.S. Department of Justice has seen a large spike in these scams over the past couple of years, proof that this type of scam is not entirely dead in 2017’s high tech society.
The saddest experience we have ever had in our careers involved someone who fell prey to the most common form of this scam. It involved a single woman in her early 70s whose husband had recently passed away – thus, she was living alone. She had received a piece of mail which made her aware that she had won a sweepstakes, and they were ready to send the million dollar prize, so she should call a telephone number if she wants to claim her prize. When she then called the number, she learned that there was some form of complication (there always is) – the complication itself is hardly important, but the fact that there was a complication is telling that this is a scam. Thus, in order to obtain the money, she needed to send money herself – this happens over and over again until the victim stops or is bled dry. After she depleted her cash, she reached out to us to sell $20,000 of her investments, which was a little more than what she usually needed, but not uncustomary. But then just a couple of weeks later, this happened again – and again and again. We did what we could on our end once we found out the truth – we first tried to convince her to stop this, then we reached out to our Lincoln team, and finally the government, but none of these actions would stop her. Unfortunately in this case, our laws are set up to protect civil liberties, and unless she was deemed incompetent, she can do what she wants with her money, even giving it away to criminals. We had never dealt with a more difficult situation, and we felt completely helpless.
How to Protect: There are steps you can take to protect your loved ones from this type of financial theft. One of the easiest ways of preventing such scams is to have a conversation with your loved ones when you first notice some of the more subtle signs of aging. Explain to them that if something is too good to be true, it probably is – if they receive a personalized piece of mail from someone stating that they have won a sweepstakes or are receiving a large inheritance (with no details of from who), they should either a) remember the conversation about this type of scam and throw the mail out or b) call you before sending any money or information to the mailer.
Neighbor Spoof
Here is another scenario that may sound eerily familiar. Your home phone (or most likely today your cell) rings, and the number that flashes across the screen has the same area code and prefix as yours. Perhaps it is your neighbor, wanting to let you know that your dog Rex has wandered into their yard? Could it be Bistro Margot confirming your reservation? You pick up, and it is a recording, or sometimes even a person. Sometimes, this is a legitimate business. But more likely than not, this is another scammer looking to take you for a ride.
These scammers are utilizing a type of technology known as Voice Over Internet Protocol (VoIP), which is used in tandem with Private Branch Exchange (PBX) software in order to transmit live/recorded voice calls over the internet. Such use of these technologies allows you to configure what shows up on the caller ID. We do not want to demonize this type of software - it has some very practical uses for many businesses, particularly those that have single call centers with multiple lines of communication that want to show one consistent caller ID name or number. However, such software can be utilized for nefarious purposes, whereby a scammer can “spoof” the caller ID – or masquerade as someone else by falsifying the name or number that appears on the recipient's caller ID display.
How is this done? The scammer, wanting to conceal their number, logs into a 3rd party spoofing service provider and submits their payment information. Once logged in, the scammer provides their real phone number. They then enter the phone number of the person (victim) they are calling and provide the fake information that they want the caller ID to show as. The spoofing service then calls the scammer back at the phone number they provided, calls the intended victim's number, and bridges the calls together along with the spoofed Caller ID information. Voilá. According to the Federal Trade Commission,[3] this particular scam is currently the 2nd most complained about issue they receive, with an estimated 2.5 billion calls placed in a single month – October of 2017.[4]
There are a few types of these scams, but the neighbor spoof occurs as follows - the fraudsters will mimic the first six digits of the receiver’s phone number in order to get the receiver to pick up the phone, believing it is from a neighbor, a local area business, their own number (which happened to Anthony) or even a relative. The latter happened to my father. A couple of years ago, he received a telephone call from a local number, and the caller said “Hi grandpa, it’s Anthony!” The caller, pretending to be my son, said he had gotten arrested, and needed to get bailed out, and that there was another person on the line who can help with the transaction. My father, still of sound mind, first noticed that the caller sounded nothing like my son. Once the caller brought up money, he knew the truth, and reached out to me just to make sure. If he was 10-15 years older, maybe it would have been a different outcome. Before I discuss how to combat such spoofs, there is one more type of scam I would to highlight.
Government/Business Spoof
Not only are spoofing schemes utilized to fake digits, but also to fake names on caller ID. Have you ever received a suspicious telephone call from the government or business? These types of spoofing schemes come in a wide variety, whose end goal is to either steal your personal information and/or money. Below are some of the most recent schemes that are in circulation (we are sure you have heard of some of the IRS scams, so we will save that for its own section).
The first type of scam involves receiving a call from the Department of Homeland Security’s OIG hotline (as stated by the caller ID), a number utilized for employees to file complaints (thus would never make outgoing calls). The caller will utilize a variety of tactics to typically try to steal your personal information (although there is a variety where they request money) including your SS number – in the most common variant (especially after the Equifax hack), the caller states that your identity may have been compromised, and they need to verify that your information is still safe. This particular scam works well on elderly immigrants, regardless of whether they are here on a legal green card or are full US citizens.
A variation of this scam involves receiving a call from some form of law enforcement. In one of the more popular variations recently, the caller purports to be the local police (also stated on caller ID), and states that you, the receiver, have missed jury duty. They will state that you will be receiving something in the mail verifying this soon along with when your make-up jury duty date is, but you also must pay a fine for missing jury duty. In another, the caller/caller ID purports to be the FBI, and states that the receiver is being investigated for federal offenses, but you can avoid an investigation/potential jail time by paying a fine.
To round out the most common spoofing scams today, there is the tech support spoofing scam. In this caper, you receive a call on your caller ID from Microsoft, Apple or some other large tech company. The caller explains to them that their computer has become infected with a dangerous virus, and in order to fix the issue, they must go to a website and purchase an anti-virus software. Sometimes, the actual service is actually legitimate, it is just very expensive and purchased under false pretenses. In others, the goal is to obtain your credit card information or infect your computer with a virus. In the most recent type, the software download will allow the caller to take control of your computer and hold your computer’s files for ransom, stating that if you do not pay their ransom fee, they will wipe your computer and render it useless.
How to Protect: Unfortunately, these types of scams seem much more frightening than the mail scam, since they indicate identity theft/potential jail time/a computer virus. While exact success rates are difficult to come by, based on the proliferation of these swindlers over the past 2-3 years, their success rate must be quite high or it would not be worthwhile as a profession.
Fortunately, there are steps you can take with the elderly to protect them, both from these types of calls, but also from themselves. First, you can do what you can to prevent these calls to mom and dad to begin with. There are numerous new anti-spoofing apps/hardware available today as the result of the propagation of such calls, both for your cell phone (True Caller, Nomorobo, CallsBlacklist) and landlines (Digitone Call Blocker Plus, HQ Telecom Landline Call Blocker, Sentry Dual Mode Call Blocker). The best of the bunch for cell phones based on our research was Nomorobo for cell phones and Digitone Call Blocker Plus for landlines. In a nutshell, both of these services compare your incoming calls against a “blacklist” of previously marked spoofers, and if they are on this blacklist, the call will automatically be blocked after one ring. If a call is not on such lists, it will come through as normal. These blockers are still in their early phase, so they are not perfected just yet, and they each have a cost ($2 per month per device for Nomorobo, $80 one time for Digitone), but these are a great way of protecting yourself.
There are additional steps you should take with the elderly in your life. First, you should let them know that they should never pick up a phone number they do not know. Why? Because if the call is legitimate, generally the caller will simply leave a message, something that illegal spoofers will rarely if ever do. Also, if you pick up the phone, the spoofers will then know that they have a live phone line, and that can lead to more spoofers calling (worst still, if you engage with the spoofers, it may be even worse, as lists of potential targets are bought and sold). If the elderly have memory issues, you can place a note next to the phone to not pick up the phone unless they see on the caller ID a specific person in their life (NOT a government, company, etc. but you or your husband’s name/number etc.).
Also, it is important to note that the government will never reach out to you with a request for money, and neither will any large company. Thus, if they do pick up the phone and someone is asking for money, there is an easy telltale sign that you have an illegal spoofer – you just need to tell the caller that you would like to call them back at their specific government unit/company, then either call the phone number on your account statement or check the phone book/the company's or government agency's website for a phone number to verify the authenticity of the request. If the caller is a spoofer, they will try to keep you on the phone or create some sort of excuse for why you cannot call them back – at this point, they should either hang up or reach out to you.
IRS Scams
The last type of caper we will discuss this month involves the tax man. These scams come in several forms, ranging from mail cons to spoofed phone calls and even bogus text messages, but generally involve a spoofed phone call (with the caller ID stating the IRS). These criminals sometimes leave urgent callback requests through robocalls if the receiver does not answer. Once the caller gets the receiver on the phone, the caller purports to be an IRS official, and demand payment for unpaid taxes. If you have paid your taxes already, they will claim that you (or your accountant) have completed your taxes incorrectly, and this is why they are reaching out to you for payment. Sometimes, the criminal on the other end may have a significant amount of information on you already, making the ruse that much more potent. They will generally request payment immediately through the payment of a wire transfer or a prepaid debit card (a tell-tale sign that this is a scam). They may threaten to arrest you or revoke your license if you do not pay. They may even tell you to mail payment to a real IRS location, or use official letterhead in emails/snail mail. This scam has cost the IRS millions of dollars each year (6,700 victims for over $38m in 2013 alone)[5] in paying back taxpayers for their losses, which is not a slam dunk for the victim.
How to Protect: There are a few signs that you are dealing with a fake IRS agent, however. First, if you receive a phone call, note that the IRS will never call you and demand payment for a tax bill without first sending you a bill in the mail. Second, the IRS will never demand payment in a specific way or more importantly, ever ask for your debit/credit card over the phone. Third, they will also never threaten to bring in police or other agencies into the fold to arrest you for non-payment. Thus, if any of these instances occur, you should direct your loved ones to call you first before making any payments. You should then contact either the IRS or the Treasury Inspector General for Tax Administration (TIGTA) to question payment. You can also report such scams to TIGTA’s “IRS Impersonation Scam Reporting” web page to report the incident or utilize the “FTC Complaint Assistant” on FTC.gov.
That is all we have for Part I – we will discuss internet “phishing” scams in Part II, and personalized scams in Part III. Let us know if you have any questions, and stay safe!
[1] https://www.ncoa.org/economic-security/money-management/scams-security/top-10-scams-targeting-seniors/
[2] https://www.bbb.org/vancouver-island/news-centre/news-releases/2017/02/top-10-scams-2017/
[3] https://www.ftc.gov/news-events/press-releases/2017/03/ftc-releases-annual-summary-consumer-complaints
[4] According to RoboCall Index, which has a product that blocks robocalls – learn more at Robocallindex.com.
[5] https://www.irs.gov/newsroom/irs-says-be-alert-for-tax-scams
Karen DeRose and Anthony DeRose are registered representatives of Lincoln Financial Advisors.
Securities and advisory services offered through Lincoln Financial Advisors Corp., a broker/dealer (Member SIPC) and registered investment advisor. Insurance offered through Lincoln affiliates and other fine companies. DeRose Financial Planning Group is not an affiliate of Lincoln Financial Advisors.