Financial Red Flags and Scams to Watch Out For
Scammers often use fear and urgency to rush you into making a mistake. They create a sense of crisis to prevent you from thinking clearly. By learning to recognize their tactics, you can stay calm and avoid falling into their traps. Here are three common scams targeting seniors.
1. The Grandparent Scam
In this cruel scam, a criminal calls you pretending to be your grandchild. They will sound frantic and say they are in trouble—they have been in a car accident, arrested, or are stuck in a foreign country and need money wired to them immediately. They will beg you not to tell their parents. The goal is to use your love for your family to trick you out of your money.
Red Flags:
- A sense of extreme urgency. They need the money right now.
- A request for secrecy. “Please don’t tell Mom and Dad, they would be so angry.”
- A specific payment method, often a wire transfer, gift card, or cryptocurrency. These methods are difficult to trace and nearly impossible to reverse.
What to Do: Resist the urge to act immediately. Hang up and call your grandchild or another family member directly using a phone number you know is real. Verify the story. Never send money based on a frantic, unexpected phone call.
2. The Tech Support Scam
This scam starts with a scary pop-up message on your computer screen. It might look like an official alert from Microsoft or Apple, complete with logos and warning sirens. The message will claim your computer is infected with a dangerous virus and you must call a toll-free number immediately for help. If you call, a fake “technician” will try to convince you to give them remote access to your computer and pay hundreds of dollars for useless software or a bogus repair service. Once they are in your computer, they can steal your financial information.
Red Flags:
- An unsolicited pop-up message that you cannot easily close.
- A demand to call a phone number to fix a computer problem. Legitimate tech companies will never contact you this way.
- Pressure to pay for services with a gift card or wire transfer.
What to Do: Do not call the number. Do not click anything in the pop-up. If you cannot close the window, shut down your computer by holding the power button. When you restart it, the pop-up should be gone. Run a scan with your antivirus software to be safe.
3. The “Account Problem” Phishing Scam
You receive an official-looking email or text message from a company you trust, like your bank, Amazon, or even Medicare.gov. The message states there has been a “suspicious login attempt” or that your “account has been suspended.” It urges you to click a link to verify your identity or update your password. The link takes you to a fraudulent website that looks identical to the real one, designed to steal your login credentials.
Red Flags:
- Generic greetings like “Dear Valued Customer” instead of your name.
- Spelling and grammar mistakes.
- A link that does not match the company’s real web address. You can often see the true destination by hovering your mouse over the link without clicking.
- A sense of urgency, threatening that your account will be closed if you do not act now.
What to Do: Do not click the link. If you are concerned about your account, contact the company directly through their official website or the phone number on your statements. For concerns about potential financial fraud, you can find valuable resources at the Consumer Financial Protection Bureau (CFPB).
Disclaimer: This article is for informational purposes and is not a substitute for professional financial or tax advice. Consult with a certified financial planner or tax professional for guidance on your specific situation.
