Financial Red Flags and Scams to Watch Out For
As a senior managing your finances, you are unfortunately a prime target for scammers. Being aware of their tactics is your best defense. Here are a few red flags related to budgeting and financial management.
1. Phishing Scams with Fake Budgeting Tools
Scammers know that people are looking for helpful finance templates and budgeting apps. They will send official-looking emails or create pop-up ads for “free” money tools that promise to simplify your life. When you click the link and download the software or sign up, you are unknowingly giving them access to your device or handing over your personal information.
Warning Signs: Unsolicited emails with urgent calls to action (“Download our tool now to save thousands!”). Poor grammar or spelling in the advertisement. A website address that is slightly different from a well-known company.
How to Protect Yourself: Never click on links in unsolicited emails. Only download software from trusted sources like the official Apple App Store or Google Play Store. For official financial information, always go directly to the source.
For official information on Social Security and Medicare, visit SSA.gov and Medicare.gov. Federal tax information is at the IRS.
2. The “Bank Investigator” Scam
In this scam, a criminal calls you pretending to be from your bank’s fraud department. They might say something like, “We’ve noticed some unusual spending on your account that does not match your typical budget. We need you to verify your information to secure your account.” They will then ask for your account number, password, or Social Security number. They use your desire to be a responsible budgeter against you.
Warning Signs: A sense of extreme urgency. Threats that your account will be frozen if you do not act immediately. Any request for your full password or PIN.
How to Protect Yourself: Hang up. Your bank will never call you and ask for this information. If you are concerned, find your bank’s official phone number on their website or the back of your debit card and call them directly to inquire.
3. “Guaranteed” High-Return Investment Scams
If your budget shows a surplus, you might be looking for ways to grow that extra money. Scammers prey on this by offering investment opportunities that promise incredibly high returns with “no risk.” They might contact you online or through a “free” investment seminar.
Warning Signs: The promise of “guaranteed” returns. Pressure to invest immediately (“This opportunity is only available today!”). Vague details about how the investment actually works.
How to Protect Yourself: Remember the old saying: if it sounds too good to be true, it probably is. Legitimate investing always involves risk. Never be pressured into making a quick financial decision.
To protect yourself from scams and for consumer information, consult the Consumer Financial Protection Bureau (CFPB) and the FTC.
