Don’t Look Now, But Financial Scammers Are Targeting You

Don’t Look Now, But Financial Scammers Are Targeting You

By David Brandolph

Last July, The Independent (UK) reported a story in which a Florida woman, Sharon Brigthwell, got a call from a number that appeared to be from her daughter. When Brightwell answered, a frantic voice identical to her daughter’s said that she had been arrested after hitting a pregnant woman with her car while texting and driving. She said she needed Brightwell to send her $15k immediately for bail.

Another voice got on the phone, purporting to be her daughter’s lawyer, and instructed Brightwell to withdraw the money from her bank and hand it over to a courier who would be arriving at her house. Confused, but determined to help her daughter who was in distress, Brightwell ignored her doubts and complied.

Later, Brightwell learned that scammers had used artificial intelligence (AI) to replicate her daughter’s telephone number and voice and steal her money.

Criminals are using similar kinds of financial shenanigans to abscond money from retirement accounts.

For instance, the New York Times in October told the story of California resident Tien Tran, who had gone into his wife’s online Vanguard Roth IRA to make a trade for her, only to find that criminals had secretly transferred about $120k in securities from the account to a Merrill Edge account that the thieves had established in his wife’s name. They did this by impersonating her using hacked personal information. Fortunately for Tran and his wife, the thieves hadn’t yet taken the money out of the Merrill account. Once notified, Merrill froze the account and returned the money.

Such examples of fraud aren’t rare. In fact, financial scamming is no longer a small-time, unsophisticated basement operation. It’s become a fast-growing $158 billion (2023) per year enterprise by transnational organized crime syndicates targeting the life savings of all of us.

Foremost on the list of scammers’ targets are seniors and retirees, regardless of education, said Liz Loewy, co-founder and Chief Operating Officer of EverCare, a technology platform for older adults. She spoke during a recent Women’s Institute for a Secure Retirement (WISER) symposium entitled “Fraud and Retirement: What to Watch for and Safeguarding Your Retirement.”

“That’s where the money is,” Loewy said, quoting infamous bank robber Willie Sutton when asked why he targeted banks.

Loewy added that 83% of U.S. wealth resides in people age 50 and over and that the average loss per victim of a scam is $120,000.

Ebony P. White, Director, Economic Security & Social Safety Net Initiatives, at the National Council on Aging, said at the conference that seniors are easier prey due to their propensity to trust those claiming to be authority figures, depend on caregivers, and be isolated and desirous of companionship.

Cognitive decline is a major factor of vulnerability, with one in three people showing signs of dementia on death, according to the Alzheimer’s Association, Loewy said.

Although industry and governmental regulators are starting to act, individuals must take preventive measures, including those suggested by White and Beth Pinsker, personal finance columnist with Marketwatch.com:

• Don’t click on links, pop-ups, or attachments from unknown sources.
• Never give out personal info (Social Security, bank details, passwords) by phone, text, or email.
• Use strong passwords and two-factor authentication.
• Collect mail regularly and shred sensitive documents.
• Consider freezing accounts at major credit rating agencies.
• Consider a billpaying service or geriatric care manager.
• Designate trusted caregivers to be authorized users on bills and a trusted person on key accounts, such as brokerage accounts and insurance policies.

White said it’s a scamming red flag if someone:

• applies pressure or fear tactics to get you to act quickly and irrationally to pay money under duress;
• requests you to make an unusual payment that can’t be traced, such as gift cards, wire transfers and cryptocurrency;
• says you’ve won a prize/lottery even though you never entered; and
• uses fake caller ID and email addresses—so always verify.

Panelists at the WISER symposium emphasized that scammers, like in the AI voice scam that fleeced Brightwell of her money, often put their targets in situations of extreme duress making it difficult for victims to think clearly and logically. Loewy, of EverCare, recommended establishing a family codeword to accurately identify callers in potential scam situations.

In addition to WISER, conference speakers included representatives from AARP, the American Bankers Association, the American Council of Life Insurers, the American Savings Education Council, the Aspen Institute, the Milken Institute, the Securities Industry and Financial Markets Association (SIFMA), T. Rowe Price and U.S. Congressional committees.

With scams on the rise, be sure to read PRC’s fact sheet to learn more about safeguarding your retirement and other assets from scams and cybersecurity threats.