Finances FYI Presented by JPMorgan Chase
Many elements of retirement are enjoyable, but the increased risk of financial scams is a downside to aging. While everyone can fall victim to a scam, older adults are especially vulnerable.
In 2023, the FBI reports that people aged 60 and older lost a combined $3.4 billion to scams. Fortunately, with some preparation, you can significantly reduce your risk of falling prey.
Why Older Adults are Targets for Scams
There are several key reasons why this demographic is hit hardest.
Scammers play on emotions. They use fear, urgent deadlines, and a personal-sounding story to make individuals act on emotion rather than logic. Older adults are often easy targets because they have grandchildren and distant relatives who would look to them for unexpected, emotionally-charged support.
- Advances in technology, like Artificial Intelligence (AI), move faster than most older adults can keep up. The rise in AI-assisted scamming is meteoric. By faking the voice of your beloved relative, crafting emails that look identical to the real thing, and using language that sounds just like your friend, AI can make a scam seem very real.
- Scammers pretend to be authorities, and older adults tend to put more trust in hierarchy and titles than younger individuals do.
- Cognitive decline combined with outsourcing more services in retirement can make it harder to distinguish between legitimate individuals.
Proactive Steps to Prevent Financial Scams
Despite the risk factors, the best way you can protect yourself from financial scams is to be proactive.
Digital Streamlining and Safety
There are several easy ways to make sure you don’t give scammers access to sensitive data.
- Use a password manager. Simple and repeated passwords are the easiest ways for scammers to get your information. Using a digital password manager like these here makes it easy to create and remember complicated, unique passwords for every website.
- Never click on a link in an email or text message you don’t recognize or didn’t ask for. Ever. If you’re interested in the content, navigate to that website’s page yourself.
- Don’t assume accurate, personal information means the source is trustworthy. Use this guide to identify AI in photos, videos, and voice.
Cleaning Up Online Money Habits
Make sure you follow several simple rules to keep your financial information private.
- Don’t store your credit card information online with individual retailers. It may save time, but it exponentially increases the risk that your data is compromised. Use a service like PayPal if you want a secure way to store payment information.
- Never give sensitive information online through unsecured connections (including email!). Your bank, doctor, or other professionals will have a secure messaging service that they use for this information. Ask about their protocol if you aren’t sure.
- Only complete online financial transactions from a known, secure internet connection.
Strengthening In-Person Relationships
While online safety is key for avoiding financial scams, having strong personal relationships can make a big difference.
- Review the top scams facing older adults with your family. Knowing the warning signs as a group can make conversations easier down the line.
- Choose a trusted family member or friend to serve as a financial liaison. This person could formally be an executor of your estate in your will or just casually help you navigate online finances. Make sure this person has a list of the organizations that have your personal information.
- Normalize asking for and offering help. This starts with building trust and a sense of community among friends and family.
Quick Steps to Disengage from Scams
Even with all of the precautions, scammers can still get through. Knowing how to disengage quickly can make it easier to trust your instincts when the time comes. Whether you’re an older adult or a caregiver helping to take care of one, these tips can help short-circuit a financial scam before it causes damage.
- Pause and slow down. Scammers are counting on you to let your emotional brain take control. Make a rule that you’ll never give unsolicited information immediately. If it’s legitimate, the person won’t mind waiting for you to call back later after your logical brain has come back online. Always ask for a number where you can call back; most scammers aren’t set up to receive calls, only make them.
- Create offline safety checks. To avoid thinking an email or phone call from your “relative” is real, choose an obscure code word that your family can always use in an emergency. Don’t publish or type this code anywhere. If you ask the scammer for the code and they don’t know it, you’ll feel more confident disengaging.
- Ask for help. Remember that people of every age and intelligence level get scammed. It’s better to get a second opinion than go along with a scam for fear of embarrassment. If the person on the other end of the line tries to talk you out of getting help, they’re not legitimate.
Finances FYI is presented by JPMorgan Chase. JPMorgan Chase is making a $30 billion commitment over the next five years to address some of the largest drivers of the racial wealth divide.
