Each year, the Federal Trade Commission (FTC) receives nearly one million reports of fraud. As the agency investigates these scams and attempts to educate the public, con artists quickly alter their methods in response to enforcement efforts. In a way, scammers work like a quickly-mutating virus. As soon as the public begins to recognize and respond to a problem, they change their methods and continue to fly under the radar.
The internet lends itself well to fraudulent activity, due to the clandestine nature of communications and the ability for con artists to pretend to be anyone they want. Unfortunately, this often means the retirement community is targeted for scams, because this generation is often less familiar with new technology.
Since education is key to protection, watch out for the following common scams:
You’ve won! Online ads may inform you that you’ve won a prize. Once they hook you into believing them, you end up supplying personal information so you can collect your prize – only the scammer ends up collecting from you instead.
Cut your credit card rate. These online ads seem friendly and helpful enough, offering to help you save money on your monthly credit card bill. It may even appear as an official email from your credit card company. One rule of thumb to remember is to always call your credit card company and verify these offers. Often these ads or emails are simply a con artist hoping you’ll fill out the fake application – and give away your Social Security number and other information in the process.
Fake auctions. Remember the old adage: if it’s too good to be true, it probably isn’t! Online ads may promise you expensive products at a fraction of retail price, but what they really want you to do is enter your cell phone number. Suddenly you’re subscribed to a monthly service which is tacked on to your phone bill. The scammers hope you won’t notice, and they can continue collecting their $7.99 per month indefinitely.
Build a larger nest egg. You may be promised a more luxurious retirement lifestyle – only to have your entire nest egg evaporate right under your nose. Always entrust your life savings to a licensed financial advisor, not someone who makes sensational promises on the internet.