Watch Out for These Financial Scams in Retirement

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“Grandma,” the voice on the line said desperately. “I need help.”

My mother rubbed the sleep from her eyes. It was 3 a.m.

“What’s wrong?” she asked.

“I’m in trouble. I was arrested and need money for bail.”

“Good, I hope you stay there!” my mother boomed and hung up.

My mom is not callous. She’d do anything to help her grandchild out of a bad situation. Fortunately she has enough sense to know that a) my son was not arrested and b) it wasn’t his voice on the phone.

Unfortunately not everyone is as sensible as my mother. And this scam has gotten a lot of grandparents to wire “bail money” (often to foreign accounts) with the plea “Please don’t tell Mom or Dad.”

It seems like at least once a week my phone rings with some swindle. Seniors tend to be the targets of lots of rip-offs.

Someone my mother knows got scammed out of more than $90,000 in the Nigerian Prince scam, where someone claims to be a prince from Africa who will pay you a hefty fee for help moving millions of dollars out of the country. All they need is your bank account number and other identifying information.

The sad thing is that these scams work… And they work well.

Last year, American seniors were scammed out of $36.5 billion.

Here are a few scams you should be aware of so that you don’t become a victim.

Fake IRS

Someone calls you claiming to be from the IRS and says you owe money that needs to be paid right away or you face arrest.

The IRS will NEVER call you about unpaid taxes. Nor will they send an email. If you owe taxes, you will receive a letter in the mail.

If you do in fact owe taxes, you write a check made out to “U.S. Treasury.” That’s it. No wiring money to an account. While you can file and pay electronically with your tax returns, send a check if you receive a letter saying you owe taxes.

Microsoft Calls

I get this one all the time. The caller claims to be from Microsoft or Microsoft Windows and says they’ve found a virus on your computer that they’ll help fix. The caller ID may even say Microsoft or some other official-sounding name.

Scammers like these will offer to help you fix the problem for a fee. They may ask for bank account information. But beware: They could put a harmful virus on your computer even if you just go to the website they give you.

These guys are persistent. Don’t engage with them.

(Note that Microsoft does not make unsolicited calls to help you fix your computer.)

Phishing

This is an easy one to fall for because the scam looks like an official email from someone you may do business with, often a big name bank. Sometimes the message is marked urgent and states that you need to take action right away by clicking on a link to go to the bank’s website.

Unfortunately, it’s not the bank’s website. These sites will likely ask you to input your bank information or put a keystroke-tracking virus on your computer. This will allow the scammers to get your user IDs or passwords to your various accounts.

I never click through an email from my bank or other businesses. I’ll always type the bank’s URL in my browser and then navigate to the appropriate page. It may take an extra few seconds, but it will protect you from this type of scam.

Stolen Debit Card

This is a new one I’ve come across. It’s ingenious. It happened to my mother-in-law, but fortunately my wife shut it down before any money was lost.

With scams like these, you get a call from a representative of your bank at a local (but not too local) branch claiming that someone with your last name withdrew several thousand dollars from your account with a debit card. The caller then says they thought it was suspicious, so they called the police, who are holding them at the branch right now. You just need to verify the debit card is in your possession by reading the caller your card number and pin.

If you hesitate, the caller tells you that the police will have no choice but to release the person if you don’t give the branch the information, and that you’ll be on the hook for whatever money they withdrew.

Keep in mind, credit card companies will occasionally contact you with questions about suspicious activity on your card. But they will never ask you for your card number.

Here are a few tips to avoid falling victim to a scam:

  1. Never give your credit or debit card number, or bank or personal information to anyone unless you initiate the call.
  2. Never click on a link in an email from a bank, especially if the email claims that you need to do so urgently.
  3. Don’t answer calls unless you recognize the number, even if it says the name of your bank. If it’s urgent, they’ll leave a message.
  4. No one is giving you lots of money to help them move money out of a country. You did not win the lottery or a sweepstakes, and even if you did, there are never any fees associated with claiming your winnings.

You worked hard for your money. A wealthy retirement is dependent on not only investing well but also keeping what you’ve earned. Don’t get tricked into giving it away.

Good investing,

Marc