A senior receives emails that appear to be from a legitimate company or financial institution asking them to update or verify their personal information. In one variation of this scam, the member receives an email that appears to be from the Internal Revenue Service (IRS) about a tax refund that requests personal information to deliver the funds. As many people know, the IRS never sends such emails.
7. Investments
Investment scams target older members looking to safeguard money for their later years. From pyramid schemes like the one that made Bernie Madoff infamous to stories of a Nigerian prince looking for a partner to claim an inheritance, investment schemes have long taken advantage of older people.
8. Homeowner schemes
Criminals like to take advantage of the fact that many people above a certain age own their homes, a valuable asset that increases the potential dollar value of certain scams.
Home-related schemes include:
A property tax scam where fraudsters send personalized letters to different properties apparently on behalf of the county assessor’s office. The letter, made to look official but displaying only public information, identifies the property’s assessed value and offers the homeowner, for a fee, to arrange for a reassessment of the property’s value and the tax burden associated with it. The member must pay the fee in advance and, after making the payment, the victim never hears from the “assessor’s office” again.
Reverse mortgages. As opposed to official refinancing programs, unsecured reverse mortgages can lead property owners to lose their homes when the scammers offer money or a free house somewhere else in exchange for the title to the property.
9. Sweepstakes and lottery
Older members learn they’ve won a lottery or sweepstakes and must make some sort of payment (i.e., to cover the taxes) before they can collect the winnings. To lend credibility to the scam, seniors will often receive a check representing partial payment of the winnings they can deposit into their credit union account.
Before the check is rejected as fraudulent, the scammers quickly collect money from the older member for the supposed fees or taxes on the prize. When the check bounces, the scammers are long gone and the member is out all of the “tax and fee” money they paid.
10. Funerals
The FBI warns of two types of funeral-related fraud used against seniors. In the first, scammers read obituaries and call or attend the funeral service to take advantage of the grieving widow or widower. The scammer claims the deceased had an outstanding debt with them, and will try to extort money to settle the fake debts.
In another ruse, funeral directors will insist they need to use an expensive burial casket even when performing a direct cremation. In reality, a less-expensive casket would suffice.
Credit union staff should be on the lookout for red flags that may indicate your members are being defrauded.
Educate your members about the latest scams, warn them if you see suspicious activity, and, when appropriate, file a suspicious activity report with the Financial Crimes Enforcement Network and notify your local adult protective services agency.
Some signs a member may be falling prey to a scammer, according to the Financial Crimes Enforcement Network:
During a transaction, the member appears to take direction from someone with whom they’re speaking on a cell phone, and seems nervous, leery, or unwilling to hang up.
The member begins discussing and buying convertible virtual currencies.
The member sends multiple checks or wire transfers with descriptors in the memo line such as “tech support services,” “winnings,” or “taxes.”
Uncharacteristic nonpayment for services, which may indicate a loss of funds or access to those funds.
Sudden and unusual changes in the member’s contact information or new connections to emails, phone numbers, or accounts that may originate overseas.
The member mentions how an online friend or romantic partner asked them to receive and forward money to someone on their behalf or open an account for a “business opportunity.”
Unexplainable or unusual account activity for a member with known physical, emotional, and cognitive impairments.
The member is agitated or frenzied about the need to send money immediately in the face of a purported emergency of a loved one, but the money would be sent to a seemingly unconnected third-party business or person.
A sudden change in financial arrangements, such as a change of power of attorney, trust, or estate planning vehicles, to a different family member or a new person.
Dormant accounts with large balances begin to show frequent withdrawals.
The member receives and transfers money interstate or abroad to recipients with whom they have no in-person relationship, and the explanation seems suspicious or indicative of a scam or money mule scheme.
Credit Union Magazine’s Spring 2023 issue features the 2023 Credit Union Heroes and examines CUNA-League advocacy priorities, board leadership, the impact of financial well-being efforts, fee-related compliance issues, predictions for the year ahead, and more.
