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How to Identify the Eight Most Common Financial Scams

Scams are on the rise. This is especially true during COVID-19 as scammers use the pandemic and promises of help—or pretending to be government officials—to prey on individuals in need. Older adults are especially vulnerable—the shift to online interaction, coupled with the isolation and health concerns created by the pandemic, has made it easier for scammers to prey on unsuspecting seniors and older adults.

If you are using the internet to access benefits, get help during COVID-19, or generally, it is important that you are aware of potential scammers. While the internet can be a great tool to connect with loved ones or access resources, you must also protect yourself. The good news is that there are ways to protect yourself and your loved ones from financial scams. The most critical tool for prevention is learning to recognize scams. Below, we have compiled eight of the most common.

1. COVID-19-Related Scams

  • Contact-tracers: Scammers are calling, texting, and emailing potential victims claiming to be official contact-tracers and asking for sensitive information. Please know that real Contact Tracers will never request your social security numbers, credit card and bank account numbers, and immigration status.
  • COVID-19 related charity: Fraudulent charities have been asking for donations for pandemic-related relief. See here for World Health Organization-related scams and see here about donating wisely.
  • COVID-19 prevention and cure scams: Fraudulent or scientifically unsupported offers for medical supplies, COVID-19 testing kits, and vaccination.
  • Phishing, fake emails, and texts related to health information: Scammers and hackers have been using official-looking emails to purportedly share health alerts, with the goal of obtaining access to sensitive information.
  • Medicare or prescription drug scams: Older adults are particularly vulnerable to this scam. Callers seek to obtain Medicare numbers and other sensitive information, claiming to be medical or insurance providers, to then submit fraudulent claims (more information on COVID-19 health care scams).

2. Government Agency Imposter Scam

A caller, automated message, email, or letter claiming to be from Social Security, IRS, or other government agency states that you have been a victim of identity theft, that you are due a stimulus benefit or government grant award, or that you owe income taxes. What can be confusing is that the caller may refer to a legitimate Social Security or IRS field office address and the caller ID may be manipulated to show an official Social Security, IRS, or other agency phone number. See samples here and here. If you are unsure, it is best to hang-up and call the actual Social Security Administration (1-800-772-1213) or IRS (1-800-829-1040).

3. ID Theft

The federal stimulus payment and an increase in online transactions have led to a spike in identity theft. Your personal information is stolen: Social Security number, bank account, etc. You may not be aware that your identity has been stolen unless you monitor suspicious activity on your personal and financial online accounts. The best way to protect yourself against identity theft is to use credit and banking alerts. For more information, visit our blog on “Eight Options to Prevent and Report Scams.

4. Internet and Text Message Phishing Scams

General digital-based scams are on the rise. Hackers send an email, or text message loaded with a virus, or spyware with the purpose of stealing your sensitive information. Some attempts are fairly obvious, but other messages appear to be coming from a trusted source and can even include a fake Zoom invitation. Most scams rely on you to click on a link to download a file or ask for log-in information, such as to change an “expired password.” See here for helpful tips on recognizing and avoiding phishing attempts.

5. Lottery, Telemarketer, or Sweepstakes Scam

A caller, email, or mailed marketing materials claim to provide an income-earning opportunity, or that you have won a sweepstake or lottery. The promised money can only be accessed by providing payment or transferring some funds. The set-up can include many other surprisingly cunning approaches. For tips to avoid falling into this trap, read our blog on “Eight Options to Prevent and Report Scams.

6. Romance Scam

Red heart with thorns

Online dating has become increasingly popular among older adults and adults of all ages, especially during the pandemic. Unfortunately, scammers have used dating apps, online dating sites, and social networking platforms to meet their next target. The scammer may create a fake profile and spend time building trust with their victim. After some time, they ask for money; usually through wire transfer, gift cards, or gift purchases—this is a red flag and generally a sign you may be getting scammed.

7. Family Emergency Scam/ Kidnapping Scam

A caller claims to be a beloved grandchild or child and asks for money due to an emergency. Some go as far as to claim they have kidnapped a loved one. Scammers already may have the name of your loved one or you may unintentionally provide names and other information during the confusing call. However, you can call and verify this information with the actual company/organization or loved ones that are assumed to be in “trouble.” For more steps to avoid this extortion scheme, click here.

8. Financial Exploitation by Family or Trusted Individuals

One of the most unfortunate scams that have been increasing due to economic desperation is financial exploitation perpetrated by a family member or a trusted person. Older adults and people with disabilities are especially vulnerable to this scam. A child, grandchild, caretaker, neighbor, friend, or professional use their position of trust to swindle the victim out of cash and assets. They can entangle their victim for years and thwart any attempt by other family members or government agencies to intervene. Elder financial exploitation is underreported, and the isolation created by the present pandemic has made it easier for abusers to continue siphoning money from victims.

Being a victim of a scam or fraud can be distressful. It can leave you with feelings of anxiety, sadness, and anger. Scammers are highly sophisticated. While the above information can help keep you safer, if you become a victim please know it is not your fault. If you believe you have been a victim of a scam, we have prepared another resource on reporting. Read here. If you need assistance, visit nylag.org/gethelp.

This material is intended for general information purposes only and does not constitute legal advice. For legal issues that arise, the reader should consult legal counsel.

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During these unprecedented times, we’ve launched a free NY COVID-19 Legal Resources Hotline and compiled the latest legal and financial counseling updates.