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.
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.
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:
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.
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.
COLLEEN KELLY is senior federal compliance counsel at Credit Union National Association. Contact her at 202-604-9862 or firstname.lastname@example.org.
Some signs a member may be falling prey to a scammer, according to the Financial Crimes Enforcement Network: