The Shocking Truth About Financial Scams

By: James A. Long / Asset Protection

When we think of financial scams, we think of nefarious persons at call centers in India preying on our grandma or grandpa and trying to get them to some money using gift cards. In fact, a quick google search on the topic would lead you to believe that the elderly are more likely to be victimized by financial scammers. But data from the U.S. Trade Commission suggests that this is incorrect. Persons between the ages of 35 and 44 are more frequently the victims of financial scams than any other segment of the population. If you are not careful you could find yourself in the victim category regardless of your age.

This article will help you identify the most common scams and show you the three hallmark warnings signs of a financial scam. It will also help you identify the four warning signs that your elderly loved one may be a victim of a financial scam without knowing it.

Who Are the Victims of Financial Scams?

Each year, 40 million adults (approximately 16% of US Adults) fall victim to one or more financial scams.[i] If you believe that the elderly persons are more likely to be the victims of scams, you are wrong. Adults aged 35-44 are the most likely victims of scammers.[ii] And people who live in areas with a higher median age (meaning living in an area with more elderly people) are less likely to be victims of financial scams.[iii] The data from Keith Anderson’s 2017 study suggests that the following identifiers are more likely to be the victims of a financial scam:

  • Women.[iv]
  • People between the ages of 35-44.[v]
  • People who have attended some college but have not obtained a bachelor’s degree.[vi]
  • People who did not serve in the military.[vii]
  • People comfortable speaking English.[viii]
  • People more willing to take risks.[ix]
  • People engaged in risky purchasing practices.[x]
  • People with high debt to income ratios.[xi]
  • People who have experienced a negative life event.[xii]
  • People who expect their future income to be much higher.[xiii]

***If this describes you, then you need to keep reading***

What is a Financial Scam?

Here are the most common types of financial scams ranked in order from most prevalent to least.

1.          Fraudulent Weight Loss Scams

This scam alone may explain why women aged 35-44 are more likely to be victimized. Effectively, this type of scam involves selling non-prescription supplements or dietary products that don’t work.

2.         Fraudulent Computer Repair or Refund for Computer Services.

This type of scam involves a pop-up message on your computer alerting you that the computer has a virus or abnormality which needs to be repaired immediately. Of course there is nothing wrong, the scammer put the message on the victims computer and then charges the victim to remove it. Another variant of this scam involves a mysterious “refund” for some overpayment. The scammer will say that the victim had purchased a warranty and they are entitled to a refund (it all sounds official and the word “refund” puts the victim’s guard down). Whatever the situation the scammer usually uses the ploy to gain remote access to the victim’s computer so that the scammer can access sensitive data.

If they are running the refund scam, the  scammer will instruct the victim to open their online bank records (all the while assuring them they cannot see, which is a lie). The scammer will then use console controls to issue the refund and manipulate bank records to make it look like they have been reimbursed too much, or over paid. For example, the scammer might say to the victim that she is entitled to a $100 refund, but manipulated the screen the make it look like $10,000 has been transferred to the victim’s bank account. If you want to see this scam in action check out youtuber “Scammer Payback” HERE.

The scammer then tells the victim to payback the “overpayment” but there is a sweetheart deal. The scammer says that the victim can keep $1,000 and only payback $9,000, not a bad windfall right? Wrong! The scammer them says to go to a local store and purchase $9,000 worth of gift cards! HINT: anytime someone want to be paid in gift cards, it is probably a scam! Of course, by the time the victim reads the card numbers to the scammer it is too late for the victim to realize that there was never any “overpayment” or “refund” at all into the bank account and they have just been scammed.

3.         Being Falsely Told that You Owe Money to the Government.

This scam involves receiving a phone call from someone claiming to be a government official for some agency (usually the IRS or a court). The scammer will say that you owe money or that a court case has been opened. The point of the scam is to get you to pay the “fine” or the “fee” so you “don’t go to jail.” The government does not make these kinds of calls and neither do courts. Do not fall victim. If it were true, you would receive an official correspondence in the mail or be personally served with court papers. Once again, this scam often involves the scammer asking the victim to buy gift cards the pay the tax or the debt to avoid jail. HINT AGAIN: NEVER PAY A DEBT IN GIFT CARDS! IT IS LIKELY A SCAM!!!

Don’t Be a Victim! Recognize the Warning Signs of a Financial Scam

Recognizing the three telltale signs of a financial scam could save you from being a victim. One of the big ones is if the person is asking for gift cards, obviously a sure sign of a scam. But others are not so obvious. Here are three other signs of a financial scam.

1.          Unexpected Requests

If a family member or friend contacts you out of the blue asking for money, especially via email or text, you should be wary. If the request comes from an unfamiliar email address or phone number, you should be extremely wary. While such requests aren’t totally unheard of, never send money unless you can verify the individual’s identity (or do what my aunt did and verify the circumstance).

A popular con, known as the Grandparent Scam, involves someone calling and pretending to be your grandchild. The “grandchild” explains he or she is in trouble and needs money immediately. The caller then asks you to wire the money or give it to a third party, usually someone posing as a lawyer or police officer. My great-aunt almost fell victim to this kind of scam. She received a call from someone who knew my first, middle, and last name saying that I was in trouble and needed money ASAP. Luckily, she called my dad to see if I was “okay” and, of course, I was fine.

No matter how urgent the caller may sound, you should always verify their identity. One of the easiest ways to do this is by having the person call you back on his or her phone. Or if the individual’s phone is dead or lost, you can ask them questions only the actual person would know the answer to, such as the name of their first pet. If they refuse, seem unusually aggressive, or act odd, do not send money.

Outside of relatives and friends, scammers often pretend to be from the IRS or another government agency, demanding immediate payment of back taxes or some other debt. They might even threaten you with arrest, ruined credit, or additional fines if you fail to comply. And if they don’t directly ask for money, they sometimes ask for verification of your personal information or direct you to visit a phishing website that secretly puts data-collecting viruses on your computer.

Regardless of if it’s done by phone, email, social media, or text, no government agency collects money this way. Moreover, legitimate organizations will be more than happy to verify they are who they claim to be and will never demand on-the-spot payment. No matter if it’s a government agency, a financial institution, law enforcement, an attorney, or a private business, you should always be allowed to verify the legitimacy of the request and consult with a trusted advisor like us before making any financial transaction.

2.         Unsolicited Money-Making Ventures

Whether through a savvy business deal or by winning the lottery, we all fantasize about striking it rich. And if you’re retired on a fixed income, this fantasy can be all-the-more alluring. Scammers know this and will use your dreams of easy money to trick you into investing in a too-good-to-be-true venture that promises big bucks for little or no effort.

There are endless variations on this popular con, from wealthy foreign nationals needing assistance transferring money to more legitimate-sounding business deals offering huge payoffs with no risk. These messages sometimes appear as if they were sent to you accidentally, making it feel like fortune has finally favored you—just like you always dreamed it would.

In reality, strangers don’t just randomly offer other strangers incredible money-making opportunities. What kind of trustworthy businessperson would seek to partner with someone they’ve never met? And if it’s such a great investment, why not recruit someone they know or simply do it themselves? Indeed, any unsolicited money-making venture you receive online from a person you don’t know is almost certainly a scam.

Many such scams originate in foreign countries with people who aren’t fluent in English, so messages with incorrect spelling, poor grammar, and/or unusual phrasing are often a dead giveaway. Other tip-offs include messages containing the following (or very similar) language:

  • You’ve won one of several valuable prizes.
  • You’ve been specially selected for this one-time offer.
  • You’ll get a free bonus if you buy our product.
  • You’ve won money in a foreign lottery.
  • This investment is low risk and offers a higher return than anything else.
  • Our product is free, but we need to put shipping and handling charges on your credit card.
  • Advance payments or fees are required to clear the promised funds or complete the offer.

3.         Requests for Personal Information

Whenever someone unfamiliar asks you for personal information like a credit card number, Social Security number, or your mother’s maiden name, proceed with extreme caution. Ask them why they need this information. Request they verify their identity. Enquire about alternate methods of proceeding that do not require such private information.

Reputable sources will respect your privacy and be more than willing to provide you with identity verification, or at least offer an alternate way for you to proceed without the need for such personal data. For example, if you receive an email request for your credit card number, look up the organization’s phone number using a source other than what they provide in the email, and ask if you can call and give your information over the phone instead.

One such con has scammers call claiming to be from the Social Security Administration (SSA), and the number may even come up on your caller ID as the SSA. The caller says your Social Security number has been stolen, used in a crime, or suspended. To protect your funds, they direct you to withdraw the money in your bank account and transfer it to a gift card. The scammers then ask for the gift card PIN number for “safekeeping.” They also may try to get you to reveal your SS number by having you verify it over the phone.

However, the SSA does not suspend your Social Security number, nor will it ever direct you to withdraw money from your bank account. What’s more, any situation in which you’re told to buy gift cards and then give out the cards’ PIN number is undoubtedly a scam.

Today’s most sophisticated scammers don’t even need to ask you for your personal data: They can steal it simply by having you open an email attachment or visit a website that’s loaded with data-scraping bots. Don’t open email attachments from strangers—or even friends and family if the attachment seems unusual. Set all your social media accounts to private so that your personal info isn’t public. And invest in anti-virus and anti-spyware programs to protect your computer from hacking.

Most Costly Scam Among the Elder Population.

Believe it or not, the costliest type of scam among the elderly are “romance scams.”[xiv] In these kinds of scams an elder adult will “meet” a new friend. Usually over the phone or online. This person woos the elder over several weeks and they develop a faux romance. At some point the new “lover” will attempt to get the elder adult to wire transfer him or her money.

Here are some warning signs that your elderly loved one may be a victim of a scam:

1.          Unusual financial transactions or spending

The most obvious sign an elderly family member is being exploited is if there are sudden changes to their spending, banking, and/or financial practices. At the same time, the person may start behaving secretively, confused, or otherwise atypical about money matters. A few of the most frequent actions include:

  • Someone who is normally meticulous about their finances suddenly starts seeing unpaid bills, non-sufficient funds warnings, and/or unexplained credit card charges.
  • The elderly person starts opening, closing, or changing banking and investment accounts, especially without regard to penalties or fees.
  • Someone with consistent spending patterns starts showing a sharp increase in spending and/or investing.
  • The person’s account sees a suspicious increase in ATM use, withdrawals, and/or checks made out to unfamiliar recipients.

2.         The appearance of a “new” person in their life

Because they’re often alone and isolated, seniors are particularly susceptible to being “befriended” by strangers who take advantage of their loneliness to exploit them. And it may not be a stranger—relatives who haven’t been around for years can suddenly start spending lots of time with the person.

This situation is particularly dangerous when the new acquaintance, caregiver, or relative spends time in the person’s home, where they have easy access to the person’s accounts, financial statements, and personal documents.

One sign that something is amiss is if the senior acts unusual when it comes to the new caregiver or friend. They may seem nervous when that person is around, stop participating in their usual social events, or be reluctant to speak about the person with you. This is a red flag the new person may be trying to isolate or control them.

3.         Unneeded goods, services, or subscriptions

Outside of loneliness, the elderly are often physically unable to handle household chores and maintenance like they used to. Given this, they’ll likely need service providers to take care of the work for them. But every new person they surround themselves with is a potential swindler.

Watch for unscrupulous door-to-door salesmen and home repair contractors, who stop by offering unsolicited products or services, especially related to home remediation issues. And they don’t have to physically present to perpetrate fraud—there are countless telemarketing and email scams that target unsuspecting seniors in order to make a quick buck or steal their identity.

One fairly common scam involves inviting the older person to a free lunch or dinner in exchange for listening to a “seminar” about a financial product or service. The elderly often feel obligated to “buy something” after getting what they thought was a free meal.

Make sure that another adult relative is present before signing any contracts, and always consult with us if you’re unfamiliar with a new investment or financial opportunity.

4.         Changes to wills, trusts, titles, power of attorney, etc.

The worst cases of financial abuse of the elderly can even involve the person making changes to wills, trusts, and other estate planning documents. Other potentially harmful changes can involve deeds, refinanced mortgages, property titles, and/or adding someone to a joint account.

Pay especially close attention if the older person seeks to grant power of attorney to someone out of the ordinary, as this can open the door for massive theft of assets and potentially fatal changes in a senior’s caregiving services.

One major advantage to establishing a relationship with a lawyer during your early years is so we can get to know you while you’re young, healthy, and clear, and then monitor if anything goes awry in your later years.

One reason financial scams are so hard to detect is that the elderly—like all of us—are embarrassed to admit they’ve been swindled, or they may not want to get a new “friend” or relative in trouble by telling others about their suspicions.

Ways to Protect Yourself and Your Family with Sound Estate Planning

First, by knowing the most common scams and the tell-tale warning signs of a scam you can stop the scam before it starts. Secondly, you need to be doing everything in your power to protect your family’s finances from other threats that have nothing to do with fraud. Comprehensive estate planning for your family’s wealth and assets is the only sure way to protect those assets from being depleted after death. A simple living trust will save your family tens of thousands of dollars in probate fees and costs.

More complex planning may save your family hundreds of thousands of dollars in estate taxes. Additionally, estate planning is the only way to truly protect your loved ones from thing completely outside of your control such as an unexpected disability, a divorce, a civil judgment, drug abuse, etc.

Contact Atlantis Law today to learn how our affordable estate plan can protect your family and your legacy from not only fraud but also the more certain estate expense like probate fees and taxes.



Nothing in this article is intended to be legal advice to YOU. Atlantis Law cannot and does not represent you unless you have first signed an engagement agreement with us. If you believe you need legal help feel free to contact us at (951) 228-9979 to arrange a consultation.



James A. Long has been an estate planning lawyer and litigator for over 10-years. Before becoming a lawyer he was an expert for the Vatican at the United Nations. He enjoys serving his clients and spending time with his wife and children.




[i] Protecting Older Consumers 2019 – 2020: A Report of the Federal Trade Commission 

[ii] Anderson, Keith B., Mass-Market Consumer Fraud in the United States a 2017 Update (2019) at p. 66; Protecting Older Consumers 2019 – 2020: A Report of the Federal Trade Commission at p. 2;

[iii] Anderson, Mass market Consumer Fraud at 121-22.

[iv] Anderson, Mass market Consumer Fraud at 82.

[v] Id. at 76.

[vi] Id. at 79.

[vii] Id. at 82-86.

[viii] Id. at 88.

[ix] Id. at 95.

[x] Id. at 99.

[xi] Id. at 100.

[xii] Id. at 106.

[xiii] Id. at 109.

[xiv] Protecting Older Consumers 2019 – 2020: A Report of the Federal Trade Commission at 8.

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    Submitting this form does not constitute any kind of agreement between you and Regnum Legacy. You understand that you are not a client of Regnum Legacy until you formally sign an engagement letter with one of our attorneys.