Avoid this (and other) phone scams

I really hate seeing these type of stories. Sean Murphy of the Boston Globe reports on an elderly women in Worcester who is scammed out of nearly $28,000 with the promise of a $1.5 million dollar prize. Read the whole story here:

It would be easy to say just don’t pick up the phone but we know that does not always happen. So, here are some tips on how to protect yourself from fraud:

  • If you receive a phone call out of the blue it is most likely a fraud. Just about all legitimate companies and organizations do not reward prize money in that manner. Your best defense is to end the call as quickly as possible.

  • Ask for contact information where you can get back in touch with them. If they give you a number (often they don’t and just try to keep you on the phone) go online and check to see if it makes sense based on their company information. The lady in the article was scammed by someone claiming she won a Publisher Clearing house prize and a quick google search pulls up the company phone numbers (800 #s), main location and the third entry down is an article about fraud phone calls.

  • Talk to your family, friends and advisors. Most of the frauds out there have been around a long-time so if you ask around you will probably find someone who is familiar with the scheme. A little online research can go a long way in prevention. AARP has a very good resource that catalogs the various frauds that are known to be occuring.

  • Do not give them any personal information like your address, name’s of family members, etc. None of this information should be given out if they call you.

  • Don’t pick up the phone when they call back. Once they have you the least bit interested they will continue to call, sometimes multiple times a day. Cut off your phone and ignore the calls.

To gain further insight into the family dynamics of fraud prevention, I reached out to a fellow financial planner Quentara Costa (Powwow, LLC) who has a specialty in helping adult children make better decisions for their elderly parents.

“When it comes to scammers, utilizing something as simple as nomorerobo is a great way to significantly cut down on phishing calls. This simple step nips the problem at the bud. It’s also not uncommon to see financial issues within the family that borderline abuse. These situations aren’t always malicious, but simply misunderstandings that are rooted in past behaviors or lack of information. Working with the family to explain the senior’s “new normal” for what can and can’t be afforded is step one. For more serious issues, which are often associated with substance abuse or mental instability, it may make sense to enact the senior’s power of attorney to limit their access to funds and get elder services involved to oversee accounts. Some advisors utilize account aggregation services that allows users to monitor transitions across all accounts. This is a great way to help family stay on top of the senior’s spending and quickly identify fraud, however, it's reactive vs proactive."

To the financial services community:

We have to do better. In the article it points out she called her financial advisor to take out some money. It is our fiduciary obligation to ask why, and if you don’t get a satisfactory response you need to keep on asking why. As part of the financial planning process we need to address this very real risk to our clients.

Bill Nickles

Principal, YD Financial, Inc.