Will you be the next target of a con artist?
Believing that fraud cannot happen to us – because we are too smart, logical, or knowledgeable – can make us more vulnerable. Successful crooks skillfully overcome our defenses and plunge us into emotional states that go beyond logical thinking, says Kathy Stokes, director of fraud prevention programs at AARP.
“The crooks call it putting the victim under the ether,” she said.
Various studies have attempted to identify the characteristics that make people more vulnerable to fraud. But it can create a “blame the victim” mentality and give the rest of us a false sense of security, she says.
“I would say the majority of people are unintentionally deceived for no reason other than criminals are good at what they do,” Stokes says.
Scammers go where the money is
Research is mixed as to whether older people are more likely to be defrauded than younger ones. One thing is certain, however: older people are more likely to have money. People 50 and over control 83% of the wealth in the United States
One way to protect that money is to reduce our exposure to sales pitches, fraud experts say. AARP studies have found that victims of investment fraud are more likely than other investors to respond to sales pitches delivered by phone, email, or television. They were also more likely to send free promotional material, enter designs, attend free seminars, and read all of their mail, including advertisements.
To reduce your exposure to potential scams, take the following steps into account:
Register on the federal do not call list.
Sign up for a phone call blocking system, such as NoMoRobo, and let unknown callers access voicemail.
If you give out personal information, make sure you know who you are giving it to and why they need it.
Don’t make investment decisions based solely on a telephone or email pitch or an ad.
Overconfidence increases our risk
Overconfidence can lead people to trade too aggressively (convinced they can beat the market), to push back saving for retirement (convinced that they can catch up later) and ignore the warning signs of fraud (convinced that they cannot be victimized).
The risk may increase with age. Studies have shown that our financial decision-making skills peak in our early fifties and decline, sometimes precipitously, thereafter. But our confidence in our abilities does not diminish – in fact, many of us become more confident.
“As we age, this gap widens between the real and perceived ability to make good decisions,” says Chris Heye, co-founder of Whealthcare Planning, a site that helps seniors and financial advisors plan for changes in life. ‘age.
According to a study by researchers at DePaul University and Rush University Medical Center, seniors who answered poorly to a financial literacy quiz, but were most confident they answered correctly, were more likely to ‘be victims of fraud.
People of all ages can fight overconfidence by getting a second opinion on financial decisions from a trusted advisor or knowledgeable friend. As we age, it may also be a good idea to consolidate our accounts so that fewer of them are watching and moving to investments that require less hands-on management, such as target date mutual funds.
Loneliness can be expensive
The Federal Trade Commission says romance scams cost people more money than any other type of consumer fraud in 2018. Reports of these scams more than doubled between 2015 and 2018, while reported losses have more than doubled. that quadrupled to $ 143 million.
Scams often start through dating apps, social media, or emails. Scammers claim to have a lot in common with their victims, then build trust for weeks or even months before asking their targets to reveal personal data or send money for an “emergency.”
Again, young and old can be defrauded. A 90-year-old victim met a man via email who several months later told him he needed help with a business deal. She sent him eight infusions of silver, draining her $ 500,000 in savings.
“She sent all that money, and the only reason she knew it was a scam was because he didn’t show up on Christmas Day like he said,” Stokes says. .
A reverse image search using TinEye or Google Images can tell if an imposter is using someone else’s photo, while sites like Romancescams.org keep track of email addresses. known crooks.
But maybe the best fraud vaccination is to talk to someone you trust about the situation before you send any money. That might be enough to get you out of the romantic ether.
This article was written by NerdWallet and was originally published by The Associated Press.