Avoiding Fraud, Financial Scams and Financial Abuse

Financial abuse and scams impact millions of people each year. These guidelines will help you and others be more aware of fraud and scams, and offer protection from financial abuse. Staying vigilant and informed is key to protecting yourself, your loved ones, and your finances.

1. Common Types of Scams

Scammers often use deceptive tactics to trick people into giving away their personal information or money. Here are some common scams and how to identify them.

• Phishing: Phishing is the practice of sending fake messages or emails that appear to be from a reputable source, such as your bank, that are asking for confidential information such as passwords, your social security number, and bank account numbers.
• Tech Support Scams: Scammers may call or send pop-ups claiming your computer has a virus and offer to fix it for a fee. They may ask for remote access to your computer, allowing them to steal sensitive data. Do not allow remote access to your computer unless you initiate the contact. If you receive unsolicited tech support calls, hang up.
• Emergency Scams: Emergency scams occur where you receive an email, text, or phone call from an unknown number asking for money or account information from someone pretending to be a loved one. They can use AI techniques to impersonate voices of loved ones, and may mention names of specific family members to make their story more realistic.
• Advance Fee Scams: Scammers may promise you some kind of benefit: a loan, a prize like lottery, a government grant, etc. However, they will ask for a payment, wire transfer or account information up front before you can receive your prize.

2. Personal Safety Methods

Taking small safety precautions can make a big difference in gaining financial protection and safety. Empower yourself with these tips.

• Use Strong Passwords: Create strong, unique, and long passwords to prevent your accounts from being easily hacked or passwords easily guessed.
• Stay Up to Date on Your Accounts: Be sure to read your credit reports and activity. This can help you keep track of your spending and see if any suspicious activity has occurred.
• Keeping Information Private: Do not give out any personal information such as full name, address, account numbers, and social security number. Make sure that when communicating with a bank or other organization, you are using a phone number or email address found directly from their verified website.

3. What to Do if You Think You Are Being Scammed

If you think you are being scammed, it is important to trust your gut feeling to protect yourself and your finances.

• Stay Calm: Scammers will make you think that the situation is dire and that you have to send them money or information immediately. Do not panic or think that you have to give anyone your information.
• Double Check: If you believe someone is contacting you pretending to be a financial organization, contact the company directly using a verified phone number or website. If you think that someone is pretending to be a loved one in order to scam you, contact them from a phone number or email that they have personally given you. You can also create a secret code word or phrase to use with family and friends to ensure that you are really talking to them.
• Talk to Someone: Consider meeting with a financial advisor to discuss your concerns and methods of protection. Talk to a trusted loved one about the situation, and see if they can help verify your concerns.

4. Understanding Financial Abuse

Financial abuse is a common abuse tactic used by individuals to gain control over another person in a relationship. This can consist of stealing and withholding finances, or using financial power to manipulate another person. This can occur in families, romantic relationships, and caretaker relationships.

• Know the Signs: Some signs of financial abuse include emotional and physical coercion for monetary control, sabotaging the job security of the victim, and not allowing the victim to have access to any of their accounts.
• Protect Yourself: Maintaining access to your accounts and passwords, having a collection of important documents can help you to maintain independence. Do not allow anyone to manage your accounts without oversight.
• Seek Help: Look into domestic violence or abuse shelters, resources, and hotlines in your area. Contacting a financial advisor can also allow you to seek legal help.

5. Elder Financial Abuse

Elder financial abuse occurs when someone illegally or improperly uses an older adult's money, property, or assets without their informed consent. Older adults are particularly vulnerable to this type of abuse due to factors such as cognitive decline, physical frailty, dependency on others for care, or isolation.

• Frequent Check-Ins: Check in with a financial advisor and your financial institution periodically to ensure that there is no suspicious activity going on.
• Recognize the Signs: Unpaid bills or lack of basic necessities, a suspicious or sudden relationship with a caregiver, or noticing missing valuables are all signs of elder financial abuse.
• Talk About It: Elders are often targeted for identity theft or fraud due to their perceived vulnerability. Scams might include telemarketing, sweepstake, and IRS scams. Ensure that your loved one is aware of these scams.
• Legal Safeguards: Requiring that multiple trusted people sign off on large financial transactions, limiting power of attorney lengths, and utilizing automatic bill payments can reduce the risk of experiencing financial abuse.

6. Reporting Fraud

If you suspect fraud or financial abuse, it’s important to act quickly.

• Contact Your Bank or Financial Institution: Report any unauthorized transactions or suspicious activity immediately. They can freeze your account to prevent further losses.
• File a Report: In cases of fraud, file a report with your local authorities, the Federal Trade Commission (FTC), or your country’s consumer protection agency. Keep a record of all communications and actions taken when reporting fraud, as this will be helpful for investigations and potential reimbursement.
• Credit Freeze or Fraud Alert: If you believe your identity has been stolen, consider placing a credit freeze or fraud alert on your credit reports.

Avoiding financial scams, fraud, and abuse requires staying informed and vigilant. Scammers often use tactics like phishing, identity theft, or telemarketing fraud to exploit vulnerabilities, while financial abuse can affect individuals, particularly the elderly or those in caretaker relationships. To protect yourself and loved ones, regularly monitor financial accounts, secure sensitive information, and establish legal safeguards such as power of attorney and trusts when necessary. Open communication and education about common schemes, combined with proactive financial management, can significantly reduce the risk of falling victim to exploitation and ensure greater financial security.

**For information purposes only. Always consult a healthcare, financial, investing, tax, or legal professional, as this content is not a comprehensive resource on these topics, should not be relied upon, and should not be considered medical, financial or legal advice. No guarantee or any warranties or representations as to the accuracy, applicability, completeness, or suitability for any purpose of the information contained herein is provided.