Over $12.5 billion was lost to fraud in 2024 – a 25 percent increase over 2023, according to the Federal Trade Commission. More consumers lost money to investment scams than any other category in 2024, with a whopping $5.7B lost, followed by imposter scams at a reported $2.95B lost.
Many of these scams target Americans aged 60+ to capitalize on the fragilities of aging, the common dependence on others in this age group, isolation, and potential cognitive impairment. Scammers often posed as friends, family banks, charities, mortgage vendors, healthcare providers, and even government organizations to commit cybercrimes including identity theft, phishing schemes, and credit card fraud.
Scammers aren’t always strangers, either; sometimes, the scams come from trusted family members and caregivers.
In this blog, we’ll share a few examples of common scams, tactics, and tips to protect yourself.
IRS Imposter Scams
One of the most common scams plaguing the U.S. involves the IRS – or what scam victims think is the IRS. Scammers claim to be from the IRS and accuse you of owing taxes. They threaten to sue, arrest or deport you, or even take away your license.
Common Tactics:
• Scammers might ask you to put money on a prepaid debit card and then give them the card numbers.
• Scammers might know some or all of your Social Security number.
• Scammers may spoof their caller ID to appear as though they’re calling from a Washington, D.C. phone number.
Here’s what you should know: the IRS will never call and ask you for a credit card number or to pay with prepaid debit cards or wire transfers. Do not wire money to strangers or pay anyone with a prepaid debit card.
The good news is the IRS has resources that describe how and why they will contact you:
• Mail – delivered by the U.S. Postal Service for first-time outreach.
• Email – only with your permission, with exceptions such as criminal investigations.
• Text Message – only with your permission.
• Phone – only to address account matters; in some cases, you will receive automated messages that direct you to IRS.gov to securely manage your account. These messages do not contain specific details.
• Fax– to verify or request employment information.
• In-Person – rare; generally accompanied by a letter in the mail to notify you to expect a visit.
Unwanted Call Scams
Chances are, you’ve received a robocall this year – they’re the FCC’s most common complaint. While many robocalls are legal, advanced technology has paved the way for an influx of illegal and spoofed robocalls. It’s much easier and cheaper now than ever before for robocalls to be made from anywhere in the world and from recognizable businesses, government entities, and even familiar phone numbers.
Another version of unwanted calls involves a person calling to sell you something. Recorded sales calls are illegal without your permission – but scammers don’t follow the rules, even if you’re on the Do Not Call registry.
While the FCC notes the issue of unwanted calls is a difficult problem to solve, you can avoid getting caught in the scam:
1. If you answer and engage with robocalls or salespeople over the phone, do not give away any identifying information, such as your Social Security Number, home address, email address, passwords, banking information, or credit card numbers.
2. If you’re doubting the legitimacy of a caller, hang up and inquire with the actual business the potential scammer is claiming to call from. Ask if they conduct cold calls like the one you received.
Romance Scams
It’s not uncommon to meet new people online these days. However, you could get caught in an unfortunate catfishing scenario if you don’t keep a careful eye out for the warning signs.
Scammers create fake, often convincing profiles online to build relationships with people and coerce them into sending money. It often goes like this:
A scammer sends a friend request or swipes right on your dating profile. You accept, and they send a message letting you know they’re interested in getting to know you.
The conversation progresses – from in-app to text messages or phone calls. They make promises, proposals, or declarations of their love to you – but they can’t meet in person for one reason or another, often distance or financial challenges.
Then, they start asking you for money: to visit you, to cover their unexpected healthcare expenses, or address other urgent financial matters.
Here are some tips to avoid getting caught in an online romance scam:
• Don’t connect online with people you don’t know in real life – especially those with recently established social profiles, who don’t have mutual friends, or have very few photos.
• Sometimes, scammers create fake profiles of people you know in real life. If a profile that requests you appears to be someone you know, reach out to them outside of the social media platform to confirm they’ve sent you a request.
• Again, do not send money to anyone you don’t know – this includes cash, gift cards, wire transfers, cryptocurrency, etc.
Home Repair Scams
If someone approaches your home or calls you claiming they can provide a service to improve your home – like installing new windows or energy-efficient solar panels – be apprehensive. It might be a scam.
Scammers often target homes in areas affected by natural disasters like floods, tornadoes, or windstorms. They’ll claim the matter is urgent and try to convince you to pay in cash or explore their financing options.
This could end a few different ways:
1. You get robbed, and your repairs are not completed.
2. The repairs make the issue worse, and you’ll end up paying more to have the repairs corrected.
3. You get stuck in a scam financing agreement.
If you’re in need of home repairs, watch out for potential scams and keep these tips in mind:
• Lean on your community for recommendations.
• Investigate the company that’s offering to do your repairs. Look for valid insurance and licenses to complete the work.
• Do not pay in cash or via wire transfer.
• Ensure there is a written contract in place, signed by both parties, before work begins. This will help to protect you, your family and your home.
Tips for Protecting Yourself from Scams
Remember, the team at StrategicPoint has your back and is poised to help you protect your wealth and avoid getting tied up in a scam. Here are some tips to keep in mind:
1. Understand you could be at risk of being scammed by both strangers and people you know.
2. Stay involved in your community to avoid isolation, which can increase your risk of being targeted.
3. Sign up for the “Do Not Call” list (1-888-382-1222) and remove yourself from unnecessary mailing lists.
4. Never give out your personal information over the phone unless you initiate the call.
5. Practice skepticism online and over the phone.
6. Freeze your credit if you suspect account fraud: Contact Equifax, Experian, and TransUnion to place a free freeze; this prevents scammers from opening accounts in your name and can be lifted anytime with a PIN.
If you suspect you may be a victim of financial fraud, don’t be afraid to seek help. Call all of your affiliated financial institutions and file a police report if necessary.
At StrategicPoint, we don’t just help you plan for retirement – we help protect it. Our team works with clients to identify risks, recognize red flags, and take proactive steps to help you avoid fraud. If you’re concerned about scams or want added confidence in safeguarding your financial future, schedule a meeting with us today.
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Kristina Mello, MBA serves as Senior Advisor and Director of Financial Planning at StrategicPoint Investment Advisors in Providence and East Greenwich. You can e-mail her at kmello@strategicpoint.com
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The information contained in this post is not intended as investment, tax or legal advice. StrategicPoint Investment Advisors assumes no responsibility for any action or inaction resulting from the contents herein. Kristina’s opinions and comments expressed on this site are her own and may not accurately reflect those of the firm or our parent company, Focus Financial Partners. Third-party content does not reflect the view of the firm and is not reviewed for completeness or accuracy. It is provided for ease of reference.
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