The advent of technology has most definitely increased productivity, efficiency, and connectedness across the globe, but its rapid development has created some unforeseen circumstances. In 2021, over 90,000 senior citizens were victims of fraud with a staggering $1.7 billion in losses (ncoa.org), up from $966 million in 2020. That means the average elder victim of fraud in 2021 was scammed out of roughly $19,000. These financial scams are on the rise. We go through many hours of anti-money laundering and at-risk training each year and it’s only become more prevalent. A story that I had recently heard disturbed me enough to write this blog post and make sure that our clients and their elder loved ones are prepared for the inevitable scam.

The story is about an elderly widow who lives alone. Recently, she received a call from an unknown number stating that her granddaughter was in a car accident, of which she was at fault, and that they requested bail that would later be reimbursed. They originally requested $9,000, but later increased the figure to $18,000 (sound familiar to the figure above?). Here’s where it takes a turn. They ask that she go to the bank, request $18,000 in physical cash, and tell the bank that she is using the funds to help her grandson on a down payment for a home.

She leaves the bank with cash and is told that the scammers (unbeknownst to her) would meet her at her home to pick up the cash. They asked her to recite a code, a common validation technique from scammers, and gave them the money. Later that evening, still wrought with fear that her grandchild was in jail and possibly injured, she called that grandchild just to make sure it wasn’t a scam. The granddaughter answered, perfectly healthy and heading home from work. Heartbreaking.

There are a lot of things to unpack here:

First, fraudsters almost exclusively use fear and emotion to prey on their victims. Anyone would have a heart-pounding reaction to hearing that a loved one is hurt or in trouble. Real law enforcement agencies, attorneys, or representatives of your loved one’s would never ask for immediate payment, especially in cash. The scammers now know where she lives and while $18,000 may or may not be recouped, her comfort in knowing that she is safe will likely not.

Second, the bank should NEVER have allowed this to happen. There are specific checks and balances that banks are required to follow in this scenario. Any person that requests any transaction above or totaling $10,000 is required to file a suspicious activity report with the IRS, as well as a Suspicious Activity Report (SAR) with the bank.

Third, if you or an elder loved one find yourself being forced to make a transaction immediately or else [insert scammer consequences], call the local authorities and/or your attorney. I have attached several links below that detail other common types of scams. These are professional fraudsters and as long as they are able to profit from the fear that they place on victims, they will adapt and improvise their techniques. Please be safe and stay calm if you or those you care about find themselves in this situation. Unfortunately, it is more likely than not that a senior citizen will experience this at least once in their lifetime. Be diligent and educated.

Finally, I want to make sure that all of our clients are aware that no money leaves your accounts at JMG without express verbal authorization from the person issuing the request. We are fortunate to know all our clients intimately and will always exercise prudence when it comes to requests for money. If we find the transaction unusual, we WILL verbally ask what the purpose is. Raymond James and JMG Wealth Management Group operate with the fiduciary responsibility to verify and confirm all suspicious activity and we have our own set of procedures to make sure that you and your money is safeguarded from illegal activity.

Federal Trade Commission –Phone Scams

https://consumer.ftc.gov/articles/phone-scams

The Federal Trade Commission (FTC) is the main agency that collects scam reports. Report the scam to the FTC online, or by phone at 1-877-382-4357 (9:00 AM - 8:00 PM, ET). The FTC accepts complaints about most scams, including these popular ones: Phone calls.

Office for Victims of Crime – National Elder Fraud Hotline

www.helpguide.org/articles/abuse/elder-scams-and-senior-fraud-abuse.htm

If you or someone you know has been a victim of elder fraud, help is standing by at the National Elder Fraud Hotline (833) 372–8311 from Monday–Friday, 10:00 a.m.–6:00 p.m. ET

Any opinions are those of author and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.

Posted in Your Legacy - Our Playbook