As technology becomes more sophisticated, so have the criminals who try to take advantage of consumers. While all Americans are at risk, older generations are especially susceptible to schemes designed to deceive them and take their money1. The good news is there are ways to avoid scams and protect finances against fraud.
What are the most common types of fraud?
According to the National Council on Aging (NCOA), telemarketing and phone scams, investment schemes, and Internet fraud are some of the top tactics that directly impact seniors. Telemarking scams can range from someone impersonating a family member who is asking for money or a charity asking for donations after a natural disaster. Other common scam tactics include free trial offers that require credit card information or out of the blue contest prizes with conditions.
A common Internet fraud scheme is phishing, which is often done by email. The NCOA warns that these scams are designed to make victims believe they are providing personal identifiable information like social security numbers, bank account or credit card numbers to a legitimate company or government agency, such as the IRS.
While many people don’t think they could fall victim to such ploys, data released by the Federal Trade Commission (FTC) in March 2017 reveals the widespread and successful attempts by those who commit fraud. According to the FTC’s Consumer Sentinel Network Data Book, a federal government cyber tool and database, from January 2016 to December 2016 consumers made close to 1.3 million fraud complaints, losing more than $744 million in scams, with the median amount paid being $450. Of scams reported to the FTC, 77% of cases were committed by telephone and 8% by email, with Florida having the highest per capita rate of reported fraud.
Identity theft is another pervasive crime that ranked among the highest, according to the Consumer Sentinel Network's 2016 complaint categories, with almost 400,000 complaints ranging from tax fraud to credit card fraud.
Ways to protect yourself from fraud
Fraudulent activity can happen to anyone in any type of circumstance; however, older Americans can be especially vulnerable for many reasons. Steady income and access to assets, being lonely and isolated, or being vulnerable due to a recent loss or health issue, are just a few examples cited by the “Money Smart for Older Adults Resource Guide,”2 which discusses how financial exploitation can occur.
Reliable information and education can be effective prevention tools to help reduce the risk of financial fraud. Keep these tips from the FTC’s consumer information website handy and share them with family, friends, and neighbors to help stop scammers from cashing in:
- Talk to someone you trust first and don’t feel pressure to react instantly if someone is asking for money or your financial information. Scammers will want you to make a decision fast.
- Don’t rely on your caller ID to be accurate. Scammers can manipulate technology to make their call seem legitimate.
- Beware of free trials that can entangle you in monthly payments or any other free offers or prizes that seem too good to be true or ask for money or credit card information upfront.
- Hang up on automatic calls or robocalls. Don’t try to talk to someone on the call; that could be part of the scam.
- Be skeptical if someone is asking for payment via a wire transfer.
- Do your own research. Verify companies and employees by calling organizations or look for online reviews or websites like the Better Business Bureau.
- Sign up for free scam alerts from the FTC at www.ftc.gov/scams
In addition to staying aware of suspicious calls, emails, regular mail, or door-to-door solicitations, the Fair Crediting Reporting Act (FCRA) ensures that Americans can get a free copy of their credit report once every 12 months from each of the three credit reporting agencies: Equifax, Experian, and TransUnion3. A credit report does not provide a credit score but information about place of residence, bill payment history, and any lawsuit or bankruptcy information is included. You can order a free credit report by visiting www.annualcreditreport.com or calling (877) 332-8228.
What to do if you suspect fraudulent activity
There are various ways to take action if you feel you’ve been a victim of fraud:
1. National Council on Aging, “Top 10 Financial Scams Targeting Seniors.”
2. Consumer Financial Protection Bureau and FDIC, “Money Smart for Older Adults Resource Guide,” 2017.
3. Federal Trade Commission, “Free Credit Reports.” 2013
The information provided is for educational purposes only and does not constitute advice. For specific details on how this may apply to your personal situation contact your personal financial advisor or insurance agent for more details. American Equity contracts are only sold through independent agents. Please contact our home office Agency Services department at (888) 221-1234 option 3, or your state insurance department, to see if there is an independent insurance agent in your area appointed to sell American Equity annuity contracts.