There are many ways a stranger might try to scam an elderly individual out of their money. Let’s look at five common stranger scams targeting elders, and get a banker’s perspective on how you can avoid becoming a victim.
The Bogus Investigation
How it works
A stranger impersonates a banker, a police officer or an FBI investigator. They contact an elderly individual, usually by telephone, and convince them to assist with an investigation, involving embezzled funds from the individual’s account. The imposter instructs the person to withdraw a large cash amount from a specific teller. The elder returns home where the alleged banker/investigator marks the bills and places them in an envelope. The elder is asked to return to the teller and deposit the money. Using a distraction technique, the imposter has already switched the money envelope with an identical envelope containing worthless paper.
“The biggest red flag here is being instructed to make a withdrawal,” says Ryan Webb, Security Bank Senior Vice President of Deposit Services. “Bank or Law Enforcement personnel will never instruct you to make a withdrawal, let alone a large withdrawal. If you are contacted by anyone who suggests making a large withdrawal, take down what information you can but reach out to a trusted family member, your personal banker or the authorities. If you are stated to be part of an investigation, require a subpoena or warrant be provided, and then contact your nearest law enforcement agency. Never contact the phone number on these documents as they will likely be impersonators.”
The Check Cashing Scheme
How it works
A stranger approaches an elderly person entering or exiting a financial institution. The stranger says they are from out of town and have an emergency. They often say they have no money but they do have a paycheck or bank check, which they will ask the individual to cash. They offer to let the elder keep a certain amount of money for their effort. The elder person cashes the check and gives the cash to the stranger minus the amount promised. Three to seven days later, the check is returned to the financial institution unpaid due to insufficient funds, a stolen check, counterfeit, or closed account. The elderly person’s account is charged for the check amount.
Ryan explains, “A bank’s standard practice is to not cash checks from other banks if the payee does not have an account. You should have the same stance. There are plenty of places for individuals to cash checks, such as grocery stores, check cashing businesses, among other places.”
“You should also be cautious of people approaching you outside of a bank as this is a red flag,” Ryan adds. “The stranger has likely already tried to cash the check and it was denied or they know the check is bad. Seek out security and let them know someone is standing at the door.”
The Check Deposit Scheme
How it works
Similar to the check cashing scheme, a stranger approaches an elderly person who is entering or exiting the bank. They explain their wallet was lost or stolen and they have no ID. They express concern that their check may be stolen if they cannot open an account, which they then ask the elderly person to deposit the check, offering a cash gift in return. The stranger says they won’t need the money for several days and will contact the person when they do. The next day, the stranger calls the individual, saying they need the money immediately because of an emergency at home. The elder individual withdraws the money and gives the stranger the money minus the cash gift. Like the check cashing scheme, a few days later, the check is returned unpaid and the full amount of the check is deducted from the elder person’s account.
“If the individual has no ID to confirm their identity to the bank, then how can you confirm their identity and that they are the payee of the check?” Ryan asks. “If I were to lose my wallet in one way or another, I would presume that I would need those funds sooner than later so as to replace the wallet, my ID and whatever else. If the wallet was truly stolen, then they need to be contacting the authorities, not asking you to deposit a check.”
The Prize Scam
How it works
An elder receives a call announcing they have just won a prize. The caller explains in order to get the prize, the elder needs to send a bank check in the amount of taxes owed on the value of the prize. The elder sends the check and prize is often never delivered or far less value than anticipated.
“This is a BIG scam for senior accountholders,” Ryan explains. “If you get a call or a letter stating you’ve won, ask yourself, ’Did I actually play the lottery?’ If not, then you most likely did not win anything if you do not remember entering or registering. This type of scam has been going on for a long time. If you feel you came into some lottery winnings, ask your banker to check into it. Banker’s will be able to ask questions to help determine legitimacy.”
The Financial Advising Scam
How it works
A stranger claims to be a financial advisor who specializes in the needs of the elderly. They may present a business card with a fancy title, such as Certified Elder Planning Specialist (CEP). But, instead of offering sound financial advice, the advisor pressures the individual into buying investment products that are not appropriate for elder investors. Because the elder trusts the advisor, the elder may take money out of their current, sound investments and purchase very risky investments and be unable to access their funds for many years. In the meantime, the imposter advisor takes big cuts of the money.
“If you’re getting pressured in any way, this should be considered a red flag,” Ryan advises. “I think that when you are dealing with your financial planning for your golden years, you should have someone in your immediate family that is trustworthy to assist you in these decisions. Also, you need to take a look at your income and, yes, your age. Are you at a point in your life where you are looking to make your money grow, or are you looking for it to sustain and pay the bills and future living needs? When it comes to money, I don’t trust someone who is pushy and wanting me to do this or that. Pushiness causes me to be more reserved about what it is I’m doing or needing to do. If someone is truly there to help you, pushiness would not be in their vocabulary. They should be showing you all the pros and cons so that you can make an educated decision. Financial advising is not a “one-size fits all” approach so you need to be methodical and take the time to understand and plan.
Tips for guarding yourself against elder scams:
- If you’re being pushed to do something related to your financial well-being, whether that be cashing a check, depositing a check or making any type of withdrawal, call your banker or a trusted family member and discuss what is going on.
- If you get taken by a scammer, do not be embarrassed about it. It happens to young and old accountholders. If and when you do realize you have been taken by a scammer, immediately contact your banker to discuss next steps.
- If it’s too good to be true, generally it is. Don’t fall for it. Call your banker.
- As bankers, we have a duty to protect our elder accountholders, so don’t take it personal if we start asking questions. We are trained and updated on scams on a regular basis and so if something doesn’t seem right, we have an obligation to act on it. It’s all for your financial safety and concern, so please understand, we are trying to help.
- The biggest thing I think you can do to keep your money safe is to call before you act. Call your banker or a trusted family member and let them know what’s going on. A lot of times, fraud can be stopped with a phone call.
- If you get a text message or an email from a random number or email address, never click on the links. These can be ways of entering your devices to obtain financial information.
- If you get a phone call saying your family member is in jail and they need you to provide bail money, call the number you have for that particular family member or call their parents, spouses or other family members to confirm before giving out any information.
- If your Social Security Number gets compromised or you gave it out and now your concerned, contact one of the three Credit Bureaus and have a freeze put on your information.
- If you give debit or credit card information out and you think you shouldn’t have, alert your bank or credit card company and inform them as soon as possible.
At Security Bank, the safety and security of your money is important to us. We work hard to make sure we have the highest level of security features available within our products and we do our due diligence to ask questions and be on the lookout for red flags. Preventing fraud is a team effort, and it’s important for you to learn how to recognize scams. Check out our Safety & Security page on our website at https://www.sbtulsa.bank/Resources/Safety-Security, which provides additional tools and recommendations for protecting you and your money.
This article is intended for information purposes only. The information provided does not constitute professional or legal advice.