Sadly, fraudsters are after your money. This is a problem plaguing everyone. I hear weekly from my clients about various fraud attempts. It does appear the fraudsters are modern marketing experts and have lists of prior victims and elderly people that are used over and over again. Here are a few samples:
Fake IRS phone call
One example is a threatening phone call from the “IRS”. The fraudster says that you have an outstanding obligation to the IRS and the sheriff is on the way to arrest you. BUT, if you have your credit card handy and authorize immediate payment over the phone of your “IRS debt” then the sheriff will not arrest you. Of course you should never give out this credit card information over the phone like this.
For your information, the IRS hardly ever calls taxpayers. If the IRS is genuinely after you, then the first contact is a “30 day letter” to your tax return address. This is how 99% of tax disputes are handled by the IRS. You should promptly consult a competent CPA or tax lawyer if you get one of these letters.
Relative Arrested in a Foreign Land
Another threatening phone call is to tell you that a dear relative, perhaps a grandchild or nephew, has been arrested in a foreign land, perhaps Australia. The fraudster has used social media to give you convincing details of their name and activities. Unless you use a bank to wire money immediately then your dear relative will suffer greatly. They will tell you the dear relative traveled overseas in secret or is deeply embarrassed by their mistake and situation.
Fraudsters love bank wires because bank wires cannot be called back. And the money can be moved with two or three more quick transfers in an untraceable move to a foreign country like Nigeria or Russia that does not cooperate with U.S.A. banking authorities.
So you feel better hanging up on the fraudster, please make your first phone calls to the dear relative and their parents to make sure they are safe and still doing their regular stuff in the U.S.A.
Of course there is the garden variety “Nigerian Prince” who needs to borrow your money and will richly reward you if only you send money first… We are all deluged with many of these emails daily.
More importantly, a more skilled fraudster will break into your email account. Many email passwords have been hacked in massive security breaches at major email providers. Then the fraudster will try to trick your financial advisor via bogus emails or phone calls into authorizing bank wires to fraudulent accounts. This works every now and again because the fraudster has taken time to read 20-30 emails between the target and their financial advisor. The level of detail is quite amazing.
The best thing you can do is change your email password every now and again. And notify your financial advisor that email alone cannot authorize a withdrawal.
Police Protection or Prosecution
Several clients have gone to the police with these fraud attempts. Sadly, these fraudsters are usually calling from a foreign country such as Russia, China or Nigeria and are way out of jurisdiction for local police.
Declining Mental Skills
The fraudsters are quite aware that elderly people frequently suffer from declining mental skill, such as Alzheimers disease. The fraudster sees this as a great opportunity. An especially tempting target is an elderly person in denial about the mental decline or beyond being able to self-diagnose the problem. Best of all to the fraudster is an elderly person who is still handling their own financial affairs because no family member is available or willing to step up to the responsibility.
The best protection is to work with a caring financial planner and attorney to arrange a good transition to a trusted family member when the time is right.
An important phone call I make is to contact a son or daughter and tell them their beloved parent needs help and it is time for a family meeting. It is not an easy phone call but afterwards the family is very grateful.