How to Protect Your Retirement Assets from Scams and Fraud

August 19, 2024

Reaching retirement is a significant achievement. After years of hard work and saving, you deserve to enjoy your retirement. However, your savings can attract dishonest individuals looking to exploit you. With substantial retirement accounts, some may overly display their wealth, inviting serious trouble.

Financial scams targeting retired people are increasing, fueled by scammers’ growing technical skills. These scams range from simple tricks to sophisticated digital schemes like phishing emails. The goal is always the same: to deceive. Offers appear appealing enough to mislead, making their scams harder to detect. Calls from “banks” can sound convincing, making it difficult to tell what’s real. Fortunately, awareness is your strongest defense. We will highlight common scams targeting seniors and provide advice on how to handle them. More importantly, there are steps you can take to protect your savings, helping you enjoy your retirement with confidence.

2023 Retirement Scam and Fraud Report

In 2023, various reports highlighted an alarming increase in scams targeting retirees. The Federal Trade Commission (FTC) revealed that older adults filed 467,340 fraud reports with reported losses exceeding $1 billion. This marked a nearly 40% increase in fraud reports compared to previous years. Notably, older adults who do report fraud tend to lose larger sums than their younger counterparts​ (Kiplinger.com)​​ (Consumer Advice)​.

According to the Better Business Bureau (BBB), investment scams, particularly those involving cryptocurrency, emerged as the riskiest type of scam. Over 80% of individuals targeted by these scams reported monetary losses, with a median dollar loss of $3,800. Employment scams and online purchase scams were also significant, with a notable rise in reports and financial losses​ (BBB)​​ (Focus Daily News)​.

Common scams include phishing emails, fraudulent investment opportunities, and phone calls from criminals posing as government officials or financial advisors. These scams often use high-pressure tactics to urge victims to make quick decisions, promising higher returns or early access to retirement funds​ (Your Money)​​ (Kiplinger.com)​.

What This Means for Retirees

This research is particularly useful for retirees to know since it best describes the danger to which they are subject. In retirement, few people work and possess tools and knowledge that can compete with fraudsters. At the same time, scams become more and more complex and sophisticated. Therefore, it is crucial for retirees to have an up-to-date list of potential threats.

Here are some practical steps retirees can take to protect themselves:

1. Stay Informed: Older people may encounter various sources that inform about new scams. The first step to avoiding some kind of fraud is to know about its existence.
2. Verify Sources: Before providing money to someone, it is essential to check whether this person or organization is registered with relevant authorities or is a scam. Financial advisors should be verified and their registration should be checked.
3. Secure Personal Information: In many cases, retirees become victims of fraud when they provide certain identifying information about them, such as bank account number or social security number. This information should NOT be provided on the phone or the Internet if the individual cannot be identified.
4. Monitor Financial Accounts: One of the most effective means to prevent a scam is to be constantly aware and in control of all bank accounts and funds. If something suspicious is detected, a competent authority should be notified immediately.
5. Educate Yourself on Digital Security: Particularly important is the ability to recognize phishing letters and emails, and the practice of NOT using the same password for all accounts, as suggested by many resources.

We will dive more on how to protect yourself from frauds and scams later in this article.

By adopting these measures, retirees can help better protect their retirement assets from scams and fraud, helping to ensure that their hard-earned savings remain secure.

Read: Retirement in 2024: Strategies for Financial Stability Amid Economic Uncertainty

Common Scams and Frauds Targeting Retirees

Retirees are frequently targeted by a variety of scams designed to exploit their financial security. Understanding these common scams can help retirees identify and avoid potential threats.

Here are some of the prevalent scams targeting retirees:

• Phishing Scams
• Tech Support Scams
• Government Impersonation Scams
• Healthcare Scams
• Lottery and Sweepstakes Scams
• Charity Scams
• Online Purchase Scams

Let’s take a look at each of them.

1. Investment Scams

Investment scams are a significant threat to retirees, often promising high returns with little risk. These scams can take various forms, including Ponzi schemes, pyramid schemes, and cryptocurrency scams. Each type of scam employs different tactics to deceive victims and steal their hard-earned savings.

Here’s a detailed look at how these scams work and the potential assets at risk:

Ponzi Schemes

Ponzi schemes are fraudulent investment operations where operators pay returns to initial investors using funds obtained from subsequent investors rather than from legitimate business operations. This creates the false pretense of profitability that draws in additional victims.

• Mechanism: The scammer typically establishes a seemingly legitimate investment fund or business, promising high, consistent returns. Early investors receive the promised returns, which are actually funded by the money from new investors. This initial success builds trust, encouraging investors to bring in more funds and recruit others.
• Deception: Fraudsters often present fake documents and reports showing impressive performance to maintain the illusion. They may also use complex financial jargon and create an air of exclusivity to lure sophisticated investors.  Remember the old adage: When it is too good to be true, it likely is.
• Collapse: The scheme depends on a perpetual influx of fresh investors. When the pool of new investors runs dry, the scam collapses, leaving the majority of investors with significant losses.

Potential Assets at Risk

• Savings: Retirees might invest large portions of their savings, attracted by the promise of steady returns.
• Retirement Accounts: Some may withdraw funds from their retirement accounts to invest more.
• Real Estate: In extreme cases, scammers might persuade victims to take out loans against their property.

Pyramid Schemes

Pyramid schemes, similar to Ponzi schemes, rely on new members investing funds when they join. Each recruit must then find additional participants, with the initial investments moving up the chain of recruiters. The scheme continues as long as new recruits keep joining. However, as recruitment inevitably slows, the system collapses, leaving a lot of investors without their money.

• Mechanism: Joining requires payment, and recruits are promised returns from others’ (previous recruits) signup fees. Members support those above in a hierarchy, creating a pyramid structure that eventually leads to failure.
• Deception: These schemes often masquerade as legitimate business opportunities, like multi-level marketing ventures claiming easy wealth. Stories of quick, substantial rewards attract the hopeful and unsuspecting.
• Collapse: Pyramid schemes are designed to fail. When new recruits run out, the entire setup falls apart, deceiving the majority who believed in effortless earnings.

Potential Assets at Risk

• Initial Investments: The upfront investment made by each new recruit.
• Recurring Investments: Some schemes require ongoing payments to maintain membership.
• Referral Incentives: Victims may invest more money to meet recruitment quotas and earn promised incentives.

Cryptocurrency Scams

Cryptocurrency scams occur when fraudsters deceive people into investing in new and emerging digital coins and tokens. Typically, such schemes encourage users to send funds in exchange for an investment that will provide high returns with minimal risk. Here are three tactics to mislead victims of these scams:

• Fake Exchanges: Here, scammers create a fake cryptocurrency exchange with persuasive promises for users to buy, trade, or store their digital assets. As soon as the unfortunate person attempts to invest, fraudsters simply disappear with the money.
• Pump-and-Dump Schemes: Another classic way to scam is making misleading statements that trigger a rise in the price of a cryptocurrency. Scammers encourage more and more people to invest in it. At the time of peak prices, the fraudster sells its reserves, which leads to the lowering the value of an asset, which leaves inexperienced victims with dead coins in their pockets.
• Phishing Attacks: Scammers will send an email or other message that appears to come from a legit cryptocurrency exchange or the creator of the underlying cryptocurrency. These scam messages will typically trick the victim into giving up their login information or secret passphrase. Then the fraudster will access victims’ accounts, withdraw their funds, and buy “dead” coins of no value.

Potential Assets at Risk

• Digital Currencies: Investments in various cryptocurrencies are at risk.
• Traditional Currencies: Retirees may convert their savings or other assets into cryptocurrencies.
• Personal Information: Phishing attacks can compromise sensitive information, leading to further financial losses.

Understanding these investment scams is crucial for retirees to protect their assets. Retirees should always verify the legitimacy of investment opportunities, consult with trusted financial advisors, and avoid high-pressure tactics promising returns with minimal risk. By staying informed and cautious, retirees can safeguard their financial security against these fraudulent schemes.

2. Phishing Scams

Phishing scams are one of the common traps for retirees, with scammers luring personal information from others in devious ways. Phishing scams are done in various ways – emails, SMS, or calls that typically appear to be from a legitimate organization.

In any case, it is important to be aware of how they operate in order to protect oneself from these frauds.

Let’s take a look at the common kinds of this fraud:

Types of Phishing Scams

1. Email Phishing
   • Description: Phishing emails are a common tactic used by scammers. They disguise their messages to appear as if they are from legitimate sources like government agencies, banks, and corporations. These messages often contain urgent calls to action, prompting recipients to click on a link or download an attachment.
   • Tactics Used: The emails often use logos and language that mimic those of the legitimate entity. They may claim that there is an issue with the recipient’s account or a security alert that requires immediate action.
   • Risks: Either the attachment will include malignant software that will damage the victim’s computer, or the link will lead the user to a bogus website that aims to steal personal information.
2. Spear Phishing
   • Description: While general phishing email messages are sent to different people or organizations, spear phishing is targeted at definite individuals or organizations. The scammers who use this type of phishing gather all possible and necessary information about the target and create extremely targeted and personalized email messages.
   • Tactics Used: The letter may start with “Hello, [Recipient’s name]” and contain information that only someone close to the recipient would know. The message often appears to come from a trusted friend, who may be unaware that their account is being used for this scam.
   • Risks: The more information the scammers have, the more possibilities are there for the recipient to fall a victim. It may result in significant financial loss or going to someone the recipient did not actually expect to have in contact.
3. Smishing (SMS Phishing)
   • Description: Smishing is the process of sending fraudulent short messages. The texts may include links to the unauthorized websites, or may directly require information the recipient must not provide.
   • Tactics Used: Scammers might claim that there is suspicious activity on the recipient’s bank account, a problem with a delivery, or that they have won a prize.
   • Risks: If the recipient provides the information required, he or she may become a victim of identity theft, financial fraud, etc.
4. Vishing (Voice Phishing)
   • Description: Vishing involves using the telephone to obtain personal information. Scammers often pose as bank officials, government representatives, or technical support personnel.
   • Tactics Used: The scammers commonly create situations of panic or fear saying that “someone is trying to wire money from the account” or “the recipient owes the IRS money”.
   • Risks: If the telephone conversation is successful, the recipient may lose a big amount of money or have his account information discovered by the criminals.

How to Recognize Phishing Scams

Phishing scams have to be broken down and classified so one can immediately distinguish what is being asked and why.  Otherwise, retirees could find themselves becoming victims of this terrible crime.

The following are the steps for identifying phishing scams:

1. Unexpected Communications: Beware of unsolicited emails, texts, and calls, especially if you need to disclose personal information or take immediate action. A message might be written in an alarming way or sound very urgent or threatening.
2. Suspicious Links and Attachments: Hover with the pointer on a link to see where it goes. To avoid phishing, do not open any attachments you are not expecting or, without verifying with the source.
3. Urgent or Threatening Language: Scammers would always try to make people send them money without much thought. Remember that no legitimate organization would want people to disclose their personal information through unsecure means.
4. Requests for Personal Information: Legit businesses and government agencies will never ask people to send personal information via email, text, or phone.
5. Poor Grammar and Spelling: Many phishing emails are written in bad English and would often have typos or other grammatical errors.

Knowing the various types of phishing scams and recognizing the signs is an important skill, and it will prevent you from falling victim to giving out personal information. Isolating your risk is another powerful way of ensuring retirees are not led into the crime.

3. Tech Support Scams

Tech support scams are particularly harmful to retirees. In these scams, a fraudster poses as an employee of a reputable tech company, claiming there is an issue with the retiree’s computer that they can resolve. Once they gain the retiree’s trust, their goal is to either gain remote access to the retiree’s computer or convince them to pay for unnecessary or non-existent services. This can lead to financial loss, identity theft, or further compromise of the computer’s security.

How Tech Support Scams Work

1. Initial Contact
   • Pop-up Alerts: When a retiree is targeted by a tech support scam, their web browser will display a pop-up alert claiming the computer is infected with a virus. This pop-up will likely be made to resemble a legitimate security warning, complete with the name and logo of a real tech company and a phone number for the retiree to call.
   • Unsolicited Phone Calls: Alternatively, the retiree may receive an unsolicited phone call from a “tech support employee” who knows very basic information, such as the retiree’s name, and claims to have pulled the retiree’s contact information from a public directory.
   • Emails and Messages: Lastly, the scammer may initiate the contact by sending the retiree an email or instant message that appears to be from a familiar company and claims the retiree’s computer is endangered.
2. Creating Urgency and Fear
   • Scare Tactics: Once the retiree is contacted, the scammer will stress the severity of the problem in an attempt to panic the retiree into instant action. This includes the use of technical language, instilling fear and an urgent tone.
   • Fake Diagnostics: Once the retiree is afraid, the scammer will issue a fake diagnostic by instructing the retiree to open certain files on his/her computer or type in specific commands. The interlayer files that pass by the computer screen all look like substantial problems, but in fact, they are all a part of every Windows operating system.
3. How the Scammer Gains Access
   • Remote Access: Once the retiree is scared and willing, the scammer convinces the retiree to download a piece of remote access software but it is really a Remote Access Trojan or, “RAT”. This will allow the thief to control the retiree’s computer, potentially installing sensitive software, committing further cybercrimes, or simply browsing the retiree’s personal files.
   • Direct Payment: The retiree is asked to pay for the supposed troubleshooting services, and the payment is often required urgently. Moreover, the scams always prefer outlandish payment methods, such as gift cards, wire transfers, or even cryptocurrency. It is also possible that the scammer will set up recurring charges of which the retiree will not be immediately aware.
4. Exploitation and Theft
   • Financial Loss: The retiree will lose a large sum of money because of direct payments for the nonexistent services or the scammer’s operation with the payment details.
   • Personal Information Theft: Once the scammer has accessed the computer, they are able to copy all the personal information, including passwords, bank accounts, social security numbers, etc.
   • Long-term Consequences: The scammer will install the malware, which will never be removed from the computer once it is on. Alternatively, the scammer can sell all the data on the dark web.

Recognizing Tech Support Scams

1. Initial Contact:
   • Phone Calls: Scammers call their victims using technology that makes it seem like the call is coming from a legitimate government organization.
   • Emails and Letters: In some cases, scammers may contact their potential victims through an official-looking email, with a logo, and filled with bureaucratic jargon, or a letter.
2. Creating Urgency and Fear:
   • Threats of Legal Action: Scammers insist that the purpose of the call is of an urgent matter and requires the interference of the alleged victim. They may claim that the number is under scrutiny and they may face immediate arrest in case of failure to act.
   • Demand for Immediate Payment: The purpose of the call is often to obtain immediate payment that the victim is demanded to make via wire transfer, gift cards, or prepaid debit card. The scammer will then ask the victim not to hang up at any point for any reason while making sure the procedure of payment is completed.
3. Verification Tactics:
   • False Verification: Scammers may provide an arrest warrant number and invite the victim to call a specific police department. To seem credible, they direct the target to a fake police department website. When the victim calls the automated phone system and enters the badge number given by the scammer, they believe they are interacting with real authorities.

Recognizing Government Impersonation Scams

1. Unsolicited Contact: A legitimate government officer will not initiate an urgent call unless solicited by the alleged victim, especially regarding financial matters.
2. Pressure Tactics: No government agency will pressure the alleged victim to comply immediately, or threaten you with physical arrest.
3. Unusual Payment Methods: A government organization won’t ask anyone to pay through gift cards, or pre‑paid debit cards.
4. Verification: Do not trust verification methods provided by the caller. Instead, verify the contact by looking up the agency’s official contact information and reaching out directly.

In order to avoid government scams, retirees should learn how these scams work and be alert to common warning signs.

Being cautious of unsolicited communications that claim to be from government agencies and verifying any claims independently are key steps in safeguarding personal and financial information.

By maintaining vigilance and a healthy skepticism towards unexpected government-related contacts, retirees can help significantly reduce their risk of falling victim to these deceptive practices.

5. Healthcare Scams

Healthcare scams are utilizing both the system of medical insurance and services, and frequently target retired people who might not always be aware of the nuances of their health plans.

The following are some of the common types and examples of how this fraud works:

Medicare Scams

Medicare fraud happens when a scammer takes advantage of and surreptitiously steals money from a beneficiary. Often, such fraudulent activity involves bogus claims or identity theft to obtain medical services. Personal information that should have stayed private is used to obtain Medicare benefits or services. These scams are designed to trick retirees into giving out bank account numbers and other personal financial details. The scam may offer free services, or claim that in return for giving personal information they will be entitled to special benefits from Medicare.

• How It Works: Medicare scammers often employ deceptive strategies to get your private information. These scammers often use official sounding language and may even produce identification cards with fake badge numbers in order to look legitimate to deceive their victims.
• Risks: If successful, they can misuse your personal information for any number of illegal activities. This includes identity theft, filing phony Medicare claims, and stealing your payments and bills. The consequences can be severe, resulting in unauthorized charges, depleted benefits, and potential difficulties accessing necessary medical care.

Fake Health Insurance Plans

Fraudsters may offer suspected victims with fake insurance policies at a higher price than opting for no coverage at all. These scams often target people during open enrollment periods, promising full coverage to entice those seeking to replace or enhance their existing plans.

• How It Works: Scammers use phone calls, emails, and fake websites to collect personal and payment information under the guise of legitimate insurance purchases.
• Risks: You will be paying premiums for a fake policy.  If an unexpected medical situation occurs, you will be informed that you do not have any coverage and will need to cover all medical expenses, which can potentially result in serious financial hardship.

Be cautious and informed about potential scams. Remember the adage: when in doubt, don’t Never share personal or financial information with unsolicited contacts. If an offer seems too good to be true, it probably is.

6. Lottery and Sweepstakes Scams

Lottery and sweepstakes scams trick individuals into believing they are receiving a prize when in reality, they are really being swindled of their money or private information.

How Lottery and Sweepstakes Scams Work

1. Notification of Winning:
   • Emails, Letters, and Phone Calls: Scammers contact the victim to inform them that they have won a lottery or sweepstakes. This is usually done through an email, a typed letter in the post, or a phone call. However, legitimate lotteries have formal application procedures for participants and would never contact winners directly with a random message.
2. Request for Fees:
   • Upfront Payments: Once you’ve been hooked, scammers will ask for upfront fees to cover taxes and processing costs. These fees can quickly add up, and victims often find themselves paying more and more without ever receiving a prize.
3. Request for Personal Information:
   • Sensitive Information: Scammers request the victim’s personal information, including SSNs or banking data with the aim to make the scheme appear legitimate. This data could then be utilized for anything from robbery to identity theft. Keep in mind that actual lotteries or sweepstakes will never demand upfront payments or fees, so be on the watch for these approaches.

Recognizing Lottery and Sweepstakes Scams

1. Unexpected Wins: Professional lotteries are strictly regulated. As a result, if you do not remember taking part in any lotteries, do not entertain such messages.
2. Upfront Fees: No lottery will ask for fees to be paid by the winner in order to claim the prize.
3. Pressure Tactics: Scammers will  try to persuade you that you may lose your winnings if you do not pay the required fees.
4. Requests for Personal Information: Be wary of requests for sensitive personal information. Well-regulated lotteries will never ask for personal information to award a prize.

Recognizing the tactics used in lottery and sweepstakes scams and verifying any prize notifications are crucial steps in safeguarding yourself from these fraudulent schemes. Treat unexpected prize announcements with skepticism and prioritize the protection of your personal and financial information to avoid becoming a victim.

7. Charity Scams

Charity scams exploit retirees’ generosity by requesting donations to false charitable causes, such as recent natural disasters or tragic events. Scammers use emotional manipulation and high-pressure techniques causing victims to pull money from legitimate charities giving it to false charities.

In order to protect oneself from these schemes, it is important to understand how they work and to become aware of the common indicators of this scam.

How Charity Scams Work

1. Emotional Appeals
   • Exploiting Tragedies: In some cases, scammers will attempt to solicit donations following a recent natural disaster, tragic event, or another widespread issue. They will usually explain the event and provide appeals to the readers’ emotions in the form of heart-wrenching photos and stories.
   • Personal Stories: Some scams will contain false stories about real people and families who were affected, driving up the urgency.
2. High-Pressure Tactics
   • Urgency: The fraudsters will insist that the donations are immediate in order to help save as many lives as possible.
   • Repeated Contact: They will not hesitate to contact a person more than once, sometimes across phone lines and digital communication.
3. Fake Websites and Organizations
   • Impersonating Real Charities: In order to appear legitimate, the fraudsters create faux-charities utilizing websites and other online tools. The websites may even appear legitimate when you look at the design, organization name, and even contact information.
   • Phishing Emails: This usually involves an email with a link to the “charity” site. They will have detailed information regarding the tragedy or other event and they will request cash payment, preferably via untraceable methods, such as gift cards or money transfers.

Recognizing Charity Scams

1. Unsolicited Requests: Be cautious of unsolicited donation requests, especially those that come through email, social media, or phone calls.
2. Pressure to Donate Immediately: Legitimate charities welcome donations at any time and do not pressure you to give immediately or at all.
3. Untraceable Payment Methods: Be wary if you are asked to donate via gift cards, wire transfers, or other untraceable methods. Legitimate charities usually have secure, traceable payment methods.
4. Lack of Detailed Information: Scammers often provide vague information about how donations will be used. Legitimate charities will have detailed plans and transparent records.

By staying informed and cautious, you can protect yourself from charity scams and help ensure that your donations are used to support legitimate causes. Always take the time to verify the legitimacy of a charity and be wary of high-pressure tactics and unsolicited requests for donations.

8. Online Purchase Scams

Recognizing Online Purchase Scams

1. Too-Good-To-Be-True Prices: Be wary of deals that seem significantly cheaper than the market price. Again, remember…if it looks too good to be true, it probably is.
2. Unverified Sellers: Always check for reviews and ratings of the seller. Lack of reviews, low ratings or negative feedback is a major red flag.
3. Suspicious URLs: Look for discrepancies in the website URL, such as misspellings or extra characters, which can indicate a fake site.
4. Limited Contact Information: Legitimate retailers provide clear contact information, including a physical address and customer service details.

By being aware of these common scams, retirees can better protect themselves and their assets. It’s essential to stay skeptical of unsolicited offers, verify the identity of individuals and organizations, and report any suspicious activities to the relevant authorities e.g. Federal Trade Commission or https://reportfraud.ftc.gov/.

How to Protect Your Retirement Assets Against Scams and Frauds

1. Investment Scams

Investment scams are among the main risks for retirees. Scammers persuade people to invest in high-return options that require a small investment and do not impose any risks. Such investments are known as Ponzi schemes.

Here’s how you can help protect your retirement assets from investment frauds:

Be Skeptical of High Returns

• Understand Realistic Returns:  It is important to fully understand what are reasonable returns. When an investment is likely to generate returns for you in the future, normally they will be moderate over a long period of time. In other words, even if the given opportunity is legitimate, high returns are associated with high risk. Moreover, financial advisors working with varying risk levels may inform you about high risks even in case of moderate returns you make.  Do some research and compare the returns of the potential scammer with stock market or top advisor returns.
• Ask Questions: Ask questions and find out as much information as possible. Do not trust the people who claim to be trying to protect you from losses by hiding the risks of the investment. Any form of investment implies some level of risk, and understanding the risk will help protect you from fraud.

Verify Investment Firms

• Check Regulatory Registrations: Research and verify the legitimacy of the investment firm through regulatory bodies like the Financial Industry Regulatory Authority (FINRA) or the Securities and Exchange Commission (SEC). These organizations maintain databases of registered financial professionals and firms.
• Look for Red Flags: Verify the firm’s and individual’s history and disciplinary records. Avoid firms with a history of complaints, legal issues, or regulatory violations. Utilize resources like FINRA’s BrokerCheck and the SEC’s Investment Adviser Public Disclosure website to conduct your research.
• Confirm Credentials: Help ensure that the advisor holds the necessary licenses and credentials. Trusted certifications include Certified Financial Planner (CFP) and Chartered Financial Analyst (CFA).

Avoid Unsolicited Offers

• Be Wary of Cold Calls and Emails: Emails, phone calls, walk-ins, or social media investment offers out of the blue should always arouse suspicion. Legitimate investment opportunities rarely come from these channels. High-pressure sales tactics can be very persuasive along with a sense of urgency.
• Investigate Before Investing: If an unsolicited offer catches your eye, take the time to do some research before you commit to anything. Make sure all investment opportunities look good from as many points of view as humanly possible. Check multiple sources to confirm the investment offers.

Consult Trusted Advisors

• Seek Professional Advice: Before making any investment, consult with a trusted financial advisor or accountant to evaluate the opportunity. Professionals can provide opinions and help identify potential risks.
• Ask for References: Request references and follow up with existing clients to gauge knowledge, success, and experience. This can provide insight into the advisor’s reliability and performance.
• Understand Fees and Commissions: Help ensure you understand all fees and commissions associated with the investment. Legitimate advisors will be transparent about their compensation structure.

Monitor Investments

• Review Statements Regularly: Regularly check your investment statements and watch out for potential issues like unauthorized transactions in your account. If anything seems wrong, contact the relevant financial institution or financial adviser immediately.
• Set Up Alerts: Set up account alerts for significant transactions or unusual activity. Most institutions will provide withdrawal and deposit alert services, as well as other account changes notifications.
• Stay Informed: Always be aware of the performance of your investments and the state of the world markets. Reading the market can help you detect potential hazards in your own investment portfolio.
• Diversify Investments: Diversifying your investment portfolio should be used to reduce risk where possible. Place money in various assets including stocks, fixed interest securities, and real estate property. This will help reduce potential losses.

If you want to learn how alternative investment works, check out our article: The Essential Guide to Alternative Investments for Retirees.

2. Phishing Scams

Deceptive communications often target retirees in their phishing campaigns. The goal of these scammers is to get personal information that might include social security numbers, bank account details or passwords.

These deceptive communications typically arrive as emails, texts, or phone calls disguised as messages from reputable sources like banks, government agencies, or popular companies.

So how can retirees protect themselves?

Be Cautious with Emails and Messages

• Avoid Clicking on Unknown Links: Phishing emails often contain links to anywhere that can trick you into giving out your personal information. Always HOVER with your mouse over the link to see the actual destination address before clicking.
• Don’t Download Attachments from Unknown Sources: With Phishing emails, malware can be embedded in attachments. So only download attachments from a known source and one that you trust. Read more about this on the Federal Trade Consumer Advice website.
• Check for Subtle Errors: Phishing emails can appear quite legitimate but often contain subtle errors, such as misspellings or discrepancies in the email address. For example, an email that comes from ‘amaz0n.com’ instead of ‘amazon.com’ may be a phishing attempt.

Verify Authenticity

• Independently Verify the Contact: Whatever you do, don’t use contact information from suspicious emails or messages. Instead, visit the organization’s official site and use the contact details listed to verify if the communication is genuine.
• Call Directly: If you receive a telephone call purportedly from a reputable organization, simply terminate the call and dial the number of that organization which you know to be correct.

Look for Red Flags

• Language of Urgency or Threat: Be cautious of emails or messages that use urgent or threatening language to prompt immediate action. Legitimate organizations rarely request sensitive information through such methods.
• Generic Greetings: Phishing emails often use generic greetings like “Dear Customer” instead of addressing you by name.
• Unexpected Requests for Personal Information: No real organization sends emails or texts asking for sensitive personal information like your passwords, Social Security Number, bank account details, etc.

Enable Two-Factor Authentication (2FA)

• Additional Security Layer: Use 2FA for extra security on online accounts. This adds an additional layer of protection by requiring a second form of verification, such as a code sent to your phone, in addition to your password.
• Set Up 2FA on All Accounts: Enable 2FA on all accounts that offer it, including email, banking, and social media accounts.

Use Security Software

• Install Antivirus and Anti-Phishing Software: Protect your devices by installing reputable antivirus and anti-phishing software. These programs can help detect and block malicious links and attachments. See the list of the most recommended antivirus software here: The Best Antivirus Software for 2024.
• Regular Updates: Keep your security software up to date to protect against the latest threats.
• Run Regular Scans: Schedule regular scans to check for malware and other threats on your devices.

Additional Tips

• Educate Yourself: Stay informed about the latest phishing tactics. Awareness is a key defense against these scams.
• Report Phishing Attempts: Report any phishing attempts to the appropriate authorities, such as the Federal Trade Commission (FTC) or your email provider.
• Secure Your Wi-Fi: Help ensure your home Wi-Fi network is secured with a strong password to prevent unauthorized access to your personal information.

3. Tech Support Scams

Tech support scams are a type of fraud where the scammer calls you pretending to be from a well-known tech company. They warn that there is a critical problem with your computer and you must repair it right away. The aim is to either infect your computer with malware that lets them access it from elsewhere on the internet or trick you into paying for needless repair services or an extortionate product. This may result in financial loss, identity theft, or turn into more vulnerabilities.

Below are some of the steps to help protect yourself from this fraud:

Ignore Unsolicited Tech Support Calls

• Hang Up Immediately: No tech company is going to call you about a computer problem. On a regular basis, customers are the ones who call tech support services if problems are encountered with their computer. If you ever get an unsolicited tech support call, be quick to disconnect immediately.
• Do Not Engage: Do not entertain the call. Responding to them can incite more scam attempts towards you.
• Use Call Blocking: Use call blocking tools or apps that can help you cut down the number of unwanted calls.

Do Not Grant Remote Access

• Never Allow Remote Access: Never allow anyone you do not know to remotely access your computer. Anyone soliciting this access is a scammer.
• Understand Remote Access Risks: Authorizing remote access also opens the door for fraudsters to plant malware, steal personal information, or exploit your computer on future attacks.
• Disconnect Immediately: If you realize you have given remote access to a scammer, disconnect your computer from the internet immediately and seek professional assistance to secure your device.

Verify the Source

• Contact the Manufacturer: If you have a reason to believe that your computer is at fault, then contact the support team using the information from the official website of the manufacturer.
• Use Official Contact Methods: Always use the contact details posted on the official website; never trust pop-up messages or phone numbers from unknown unsolicited callers.
• Check for Legitimate Issues: As a retiree, it’s understandable that you don’t have the knowledge to check the issue by yourself. If this is the case, it’s highly recommended to ask for help from a professional who can help you in addressing the issue.

Use Trusted Security Software

• Install Reputable Security Software: Protect your computer with antivirus and anti-malware programs. These programs can help in detecting and blocking malicious activities that may put your retirement assets at risk.

Educate Yourself

• Learn Common Tactics: Get to know some of the typical practices employed for tech support scams and how you can identify them before becoming a victim. This may include pop-up alerts, unsolicited phone calls, and even scaremongering.
• Stay Informed: Keep up to date with the latest news on tech support scams and other types of fraud. Awareness is key.

Additional Tips

• Be Skeptical of Pop-up Alerts: Ignore pop-up alerts on your computer that claim your device is infected and provide a phone number to call for help. These are often scams.
• Secure Your Devices: Use strong passwords for all your accounts and devices. Enable two-factor authentication where possible.
• Monitor Financial Accounts: Regularly check your bank and credit card statements for any unauthorized transactions and report them immediately.
• Report Scams: Report any suspicious activity or scam attempts to the Federal Trade Commission (FTC), your state’s consumer protection office, or the tech company being impersonated.

4. Government Impersonation Scams

Government impersonation is a type of fraud that targets retirees on the phone or in their mailbox. The scammer pretends to be an official from agencies like the IRS or Social Security Administration. They often use fear and intimidation tactics to force the victim to provide their personal information or make a payment.

To help protect yourself from these fraudulent schemes, follow these tips:

Know the Signs

• Official Communication Channels: Government agencies communicate through official letters, secure portals, or verified contact channels. They do not initiate contact through unsolicited phone calls, emails, or text messages.
• Unsolicited Calls and Emails: Be wary of any unexpected communication claiming to be from a government agency. Scammers often use caller ID spoofing to make their calls appear legitimate.
• Demanding Immediate Action: Scammers often create a sense of urgency, demanding immediate action to avoid penalties, arrest, or legal action. Government agencies typically provide ample time for responses and do not demand immediate payment over the phone or via email.

Do Not Provide Personal Information

• Protect Your Personal Information: Avoid giving out personal information such as your social security number, bank account details, or credit card information to anyone claiming to be a government official without verifying their identity.
• No Upfront Payments: Legitimate government agencies do not ask for payments via gift cards, wire transfers, or prepaid debit cards. Any request for such payments is a red flag for a scam.
• Verify the Identity: If someone claims to be a government official, ask for their name, title, and contact information. Then, independently verify their identity using official contact information from the agency’s website.

Verify Claims

• Use Official Contact Information: To verify any claims, contact the agency directly using information from their official website. Do not use phone numbers or email addresses provided in the suspicious communication.
• Check for Official Correspondence: Government agencies will send official letters or notices through the mail before initiating contact via phone or email. Look for official correspondence to verify the claim.
• Consult Trusted Sources: If in doubt, consult a trusted financial advisor, lawyer, or family member before taking any action. They can help verify the legitimacy of the claim and provide guidance.

Report Scams

• Federal Trade Commission (FTC): Report any suspicious contact or scam attempts to the FTC. They collect information on scams and use it to build cases against fraudsters.
• Social Security Administration (SSA): Report scams involving Social Security to the SSA’s Office of the Inspector General.
• Internal Revenue Service (IRS): Report IRS-related scams to the Treasury Inspector General for Tax Administration (TIGTA). You can also use the IRS’s official website to report and verify any claims.
• Local Law Enforcement: If you have been a victim of a government impersonation scam, contact your local law enforcement agency to file a report.

Additional Tips

• Educate Yourself and Others: Stay informed about common scam tactics and share this information with friends and family, especially older adults who may be more vulnerable.
• Secure Personal Information: Use passwords with mixed characters for your online accounts and always enable two-factor authentication where possible.
• Monitor Financial Accounts: Regularly check your bank and credit card statements for any unauthorized transactions and report them immediately.
• Be Skeptical of High-Pressure Tactics: Scammers often use high-pressure tactics to force quick decisions. Take your time to verify any claims and consult trusted sources before taking action.

5. Healthcare Scams

Healthcare scams exploit retirees by claiming to offer services or updates for Medicare and other medical insurance. These scams can lead to financial losses, identity theft, and disruptions in your medical coverage.

Here’s how to help protect yourself:

Verify Medicare Communications

• Official Communication Channels: Medicare will not call you to ask for your Medicare number. Be cautious of unsolicited calls, emails, or messages claiming to be from Medicare. Legitimate Medicare communications are usually conducted via their company email or through secure, official channels.
• Confirm with Medicare: If you receive a suspicious call or message claiming to be from Medicare, contact Medicare directly using the phone number on your Medicare card or visit the official Medicare website. Do not use contact information provided in the suspicious message.

Protect Your Medicare Number

• Treat it Like a Credit Card: Treat your Medicare number as you would your credit card number. Do not share it with unsolicited callers or unknown entities. Scammers can use your Medicare number to commit identity theft and file fraudulent claims.
• Be Wary of Freebies: Be cautious of unsolicited offers for no-cost medical equipment or services in exchange for your Medicare number. Legitimate providers do not require your Medicare number for no-cost services.

Check Your Statements

• Review Medicare Summary Notices (MSNs): Regularly review your Medicare Summary Notices (MSNs) for any unfamiliar services or charges. MSNs are sent quarterly and list all services billed to Medicare in your name.
• Look for Errors: Pay attention to any discrepancies or services that you did not receive. If you notice any suspicious charges, report them immediately to Medicare.
• Keep Records: Maintain a record of your medical services, including dates and providers, to cross-check against your MSNs.

Research Health Insurance Offers

• Verify Legitimacy: Before purchasing health insurance, verify the legitimacy of the provider through your state’s insurance department. Many states provide online tools to check the licensing and status of insurance companies.
• Check Reviews and Ratings: Look for reviews and ratings of the insurance provider from trusted sources like the Better Business Bureau (BBB) and consumer protection websites.
• Beware of High-Pressure Sales Tactics: Legitimate insurance providers do not use high-pressure sales tactics or demand immediate decisions. Take your time to research and consider all options before making a decision.

Additional Tips

• Educate Yourself on Common Scams: Stay informed about common healthcare scams, such as fake Medicare representatives, bogus medical equipment offers, and fraudulent health insurance plans. Knowledge is a powerful tool in protecting yourself from fraud.
• Secure Your Personal Information: Use strong passwords for your online accounts and avoid sharing personal information on unsecured websites. Enable two-factor authentication (2FA) where possible.
• Be Cautious with Unsolicited Offers: Be skeptical of unsolicited offers for medical services, equipment, or insurance. Verify the legitimacy of the offer through official channels before providing any personal information.
• Consult Trusted Sources: Seek advice from trusted family members, friends, or healthcare professionals if you are unsure about an offer or communication. They can provide guidance and help verify the legitimacy of the claim.
• Report Suspected Fraud: Report any suspected healthcare fraud to the Office of the Inspector General (OIG) at the Department of Health and Human Services (HHS). You can also contact the Senior Medicare Patrol (SMP) for assistance with identifying and reporting Medicare fraud.

6. Lottery and Sweepstakes Scams

Lottery and sweepstakes scams are fraudulent schemes that falsely inform retirees they have won a prize, then request fees or personal information to claim it. These scams exploit the excitement and anticipation of winning, leading victims to act quickly without verifying the legitimacy of the claims. Here’s how to protect yourself from these deceptive practices:

Be Skeptical of Unexpected Wins

• Question the Source: If you did not enter a lottery or sweepstakes, it’s highly unlikely you have won. Be skeptical of any unexpected notifications claiming you have won a prize.
• Recognize Common Tactics: Scammers often use official-looking logos and professional language to make their communications appear legitimate. Be aware that these tactics are designed to trick you.

Refuse to Pay to Claim a Prize

• Understand Legitimate Practices: Legitimate lotteries and sweepstakes do not require winners to pay fees to receive their prizes. Any request for payment to cover processing fees, taxes, or shipping costs is a red flag.
• Know the Law: In many countries, it is illegal for legitimate lottery and sweepstakes operators to charge winners to claim their prizes. Familiarize yourself with the laws in your country regarding such practices.

Verify the Source

• Contact Directly: If you receive a notification about winning a prize, contact the organization directly using official contact information found on their website. Do not use contact details provided in the suspicious message.
• Cross-Check Information: Verify any claims by cross-checking information with known and trusted sources. This includes checking the official websites and contacting the organization’s customer service.

Protect Personal Information

• Guard Sensitive Data: Do not provide personal or financial information such as your social security number, bank account details, or credit card information to claim a prize. Scammers can use this information for identity theft and financial fraud.
• Be Wary of Personal Questions: Legitimate lotteries and sweepstakes will not ask for sensitive personal information to award a prize. Be cautious of any communication that requests such details.

Additional Tips

• Look for Red Flags: Be aware of common warning signs of scams, such as:
  • High-pressure tactics urging immediate action
  • Requests for payment via unconventional methods (e.g., wire transfers, gift cards)
  • Claims that you need to keep your winnings confidential
  • Notifications coming from email services without cost (e.g., Gmail, Yahoo)
• Report Suspicious Activity: If you suspect a lottery or sweepstakes scam, report it to the Federal Trade Commission (FTC) or your country’s consumer protection agency. Reporting helps authorities track and address fraudulent activities.
• Educate Yourself: Stay informed about common scam tactics and current fraud trends. Knowledge is a powerful tool in protecting yourself from scams.
• Use Technology to Block Scammers: Consider using call-blocking apps and spam filters on your email to reduce the number of unsolicited calls and emails you receive.
• Consult Trusted Advisors: If you’re unsure about a potential scam, consult with trusted family members, friends, or financial advisors before taking any action.
• Keep a Record: Maintain records of all correspondence related to the prize claim. This can help in reporting and resolving any issues if you suspect fraud.

7. Charity Scams

Charity scams exploit retirees’ goodwill by soliciting donations for fake causes. These scams often emerge after natural disasters, during holiday seasons, or following high-profile events, exploiting the emotional appeal of helping those in need. Here’s how to help ensure your donations are legitimate and protect yourself from fraudulent schemes:

Research Charities

• Use Trusted Sources: Before donating, research charities using trusted sources like Charity Navigator, GuideStar, or the BBB Wise Giving Alliance. These organizations provide ratings and detailed information about the financial health, accountability, and transparency of charities.
• Check Registration Status: Verify that the charity is registered with the appropriate regulatory body in your country, such as the IRS in the United States. Most legitimate charities will be listed as 501(c)(3) organizations, meaning they are tax-exempt and meet specific legal requirements.
• Read Reviews and Reports: Look for reviews and reports from other donors. This can provide insight into the charity’s operations and the impact of its work.

Verify Contact Information

• Use Official Channels: Confirm the charity’s legitimacy by contacting them using official contact details found on their verified website. Avoid using contact information provided in unsolicited messages or through third-party websites.
• Look for Physical Addresses: Legitimate charities usually have a physical address listed on their website. Verify this address and be certain that it corresponds to the real location of the charity.

Avoid High-Pressure Tactics

• Take Your Time: Legitimate charities do not pressure you to donate immediately. They understand that making an informed decision takes time. Be cautious of any organization that uses high-pressure tactics or insists on immediate donations.
• Ask Questions: Do not hesitate to ask for more information about the charity’s mission, how donations are used, and their impact. A legitimate charity will be happy to provide this information.

Use Secure Payment Methods

• Credit Cards and Checks: Donate through secure methods like credit cards or checks. These methods offer a level of protection and are traceable. Avoid donating via cash or gift cards, as these cannot be easily traced and are often used in scams.
• Verify Payment Processing: Make sure the website where you make your donation is secure (look for HTTPS in the URL and a padlock icon). Avoid making donations through links sent via email or social media unless you have verified their authenticity.

Additional Tips

• Beware of Similar Names: Scammers often use names that sound similar to well-known charities. Double-check the name and spelling to help ensure you are donating to the correct organization.
• Understand How Donations Are Used: Legitimate charities should be transparent about how donations are used. If a charity cannot explain how your donation will make an impact, consider donating elsewhere.
• Keep Records of Your Donations: Maintain records of all your charitable donations, including receipts and correspondence. This can help with tax deductions and provide proof in case you need to report a scam.
• Report Suspicious Activity: If you suspect a charity scam, report it to the Federal Trade Commission (FTC), your state’s consumer protection office, or the organization that regulates charities in your country.
• Educate Yourself and Others: Stay informed about common charity scams and share this information with friends and family. Awareness is a crucial tool in preventing fraud.

8. Online Purchase Scams

Online purchase scams deceive retirees into buying items that either never arrive or are counterfeit. These scams are prevalent on less regulated e-commerce platforms and social media. To help protect yourself from falling victim to these schemes, follow these comprehensive guidelines:

Shopping from Reputable Sites

• Use Trusted E-commerce Platforms: Stick to well-known and reputable e-commerce platforms like Amazon, eBay, or Walmart. These platforms have measures in place to detect and prevent fraudulent listings.
• Avoid Unknown Websites: Be wary of unfamiliar websites, especially those offering deals that seem too good to be true. Scammers often use cheap prices to lure in unsuspecting buyers.
• Check the URL: Make sure the website’s URL is correct and not a slight variation of a legitimate site (e.g., amaz0n.com instead of amazon.com).

Checking Seller Reviews

• Read Customer Reviews: Look for reviews, feedback and ratings of the seller. A lack of reviews or predominantly negative feedback is a warning sign.
• Check for Consistency: Be cautious of reviews that are overly positive without any criticism. Scammers can create fake reviews to build a false reputation.
• Verify Reviewer Profiles: Click on the profiles of reviewers to see if they have reviewed other products. Profiles that have only reviewed products from the same seller may be fake.

Verifying Website Security

• Look for HTTPS: Be sure that the website has secure encryption. Look for HTTPS in the URL and a padlock icon. This indicates that the website encrypts data to protect your personal information.
• Check for Security Seals: Look for security seals from reputable organizations like Norton Secured or McAfee Secure. Click on the seal to verify it’s legitimate.

Using Secure Payment Methods

• Credit Cards and Payment Services: Pay with credit cards or secure payment services like PayPal that offer buyer protection. These methods provide recourse if you don’t receive your item or if it’s counterfeit.
• Avoid Wire Transfers and Gift Cards: Do not use wire transfers, gift cards, or other untraceable payment methods. These are commonly used by scammers because they are difficult to trace and recover.

Monitoring Your Accounts

• Regular Account Reviews: Regularly check your bank and credit card statements for any unauthorized transactions. Promptly report any suspicious activity to your financial institution.
• Set Up Alerts: Use account alerts to monitor significant transactions. Many banks and credit card companies offer alert services for large purchases or changes to your account.

Additional Tips

• Use Strong Passwords: Protect your online shopping accounts with strong passwords. Avoid using the same password for multiple sites.
• Beware of Pop-up Ads: Be cautious of pop-up ads and unsolicited emails offering incredible deals. These can be phishing attempts designed to steal your information.
• Check Return and Refund Policies: Before making a purchase, review the seller’s return and refund policies. Legitimate sellers will have clear, fair policies.
• Verify Contact Information: Legitimate websites will provide clear contact information, including a physical address and customer service phone number. Verify this information before making a purchase.
• Secure Your Device: Make sure that your computer or mobile device has up-to-date security software to protect against malware and phishing attempts.
• Research the Product: Conduct research on the product you are buying. Look for detailed descriptions, images, and specifications to help ensure it matches what you are looking for.
• Avoid Too-Good-To-Be-True Deals: Deals that seem too good to be true often are. Be skeptical of prices that are significantly lower than those offered by reputable retailers.
• Use Browser Extensions: Consider using browser extensions that can help identify fraudulent websites and alert you to potential scams.

Partnering with Landsberg Bennett Private Wealth Management

Partnering with a fiduciary like Landsberg Bennett Private Wealth Management offers retirees a trusted ally in managing their assets and helping with financial security. A fiduciary is legally obligated to act in your interest by providing advice and comprehensive financial management.

Here’s how partnering with Landsberg Bennett can help protect you from scams and enhance your financial well-being:

Comprehensive Financial Planning

• Personalized Guidance: We offer tailored financial guidance that considers your circumstances, goals, and risk tolerance. This individualized approach helps you make informed decisions and avoid fraudulent schemes.
• Retirement Strategies: Guidance on retirement strategies helps ensure that your investments are aligned with your long-term objectives, reducing the risk of falling for high-risk or fraudulent investments.
• Regular Assessments: Regular assessments and updates of your financial plan help with identifying and mitigating potential risks, helping to ensure that your strategy remains effective and aligned with your goals.

Investment Management

• Diversified Portfolio: By creating a diversified investment portfolio, Landsberg Bennett helps spread risk and protect your assets from market volatility and fraudulent investments.
• Thorough Research: Our team conducts thorough research on all investment opportunities, helping to ensure they are legitimate and suitable for your portfolio.
• Continuous Monitoring: Continuous monitoring of your investments allows for timely adjustments and protection against emerging threats.

Fiduciary Responsibility

• Acting in Your Interest: As a fiduciary, we are committed to acting in your interest, providing guidance and services that prioritize your financial well-being.
• Transparency and Accountability: Transparent practices and accountability in all financial dealings help build trust and confidence in the management of your assets.
• Impartial Advice: Being a fiduciary means that we provide advice, helping to ensure that recommendations are based solely on what is ideal for you.

Estate Planning and Legal Support

• Comprehensive Estate Planning: We offer comprehensive estate planning services, helping to ensure your assets are protected and your wishes are honored.
• Legal Coordination: Coordination with legal professionals helps ensure that your estate plans are legally sound and effective in protecting your legacy.
• Beneficiary Protection: Proper planning and management of beneficiary designations help safeguard your assets for future generations.

By partnering with Landsberg Bennett Private Wealth Management, you gain access to a team of dedicated professionals committed to helping protect your financial future. Our fiduciary responsibility, combined with comprehensive financial services, provides a robust defense against scams and fraud, helping to ensure that your retirement years are financially secure and fulfilling.

Wrapping up

Reaching retirement is a significant milestone that represents years of hard work and diligent saving. However, with a nest egg comes unwanted attention from scammers who prey on seniors. Retirees are often targeted because they may have substantial savings. These scams range from phishing emails and fake tech support calls to fraudulent investment opportunities and bogus charities. The increasing sophistication of these scams makes them harder to detect.

Fortunately, there are numerous ways to protect yourself. Being aware of the most common scams and learning how to recognize the signs can significantly reduce your risk. Staying skeptical of unsolicited offers, verifying the identity of individuals and organizations, and reporting suspicious activities are crucial steps. By staying informed and vigilant, you can enjoy your retirement with confidence, knowing your hard-earned savings are protected.

Third Party Disclosure

Third-party links and references are provided solely to share social, cultural, and educational information. Any reference in this post to any person, or organization, or activities, products, or services related to such person or organization, or any linkages from this post to the web site of another party, do not constitute or imply the endorsement, recommendation, or favoring of Landsberg Bennett or Hightower Advisors, LLC, or any of its affiliates, employees or contractors acting on its behalf. Hightower Advisors, LLC, does not guarantee the accuracy or safety of any linked site