Financial Scams and the Elderly

This year, a Pesach hotel program collapsed shortly before the holiday, causing countless problems for guests and a tremendous loss of money. The reason given was a fake email from the hotel to the kosher syndicator that provided a false bank account number to wire the money to. It’s pretty surprising that a sophisticated businessman would wire hundreds of thousands of dollars to an unconfirmed bank account. But that’s how scams work – through trickery and deception.

I am sure you are all aware that scams have been increasing. The title of this article is perhaps misleading as scams are getting more sophisticated, and not only the elderly are falling for them. For example, yesterday I received a phone call from a well-known New York yeshiva. I gave the lady my credit card number to make a donation. Was that safe? She sounded frum, so I did it. All ages should pay attention, but the elderly remain prime targets.

You see, the elderly have money, and they come from an era when people were more trusting. Also, the elderly want to be independent so they do not ask for advice. In my opinion, the number-one reason that people get into trouble with scams is because they do not have a system for getting advice. If I had to offer one recommendation, it would be to always discuss important decisions with wise people. In my accounting practice, I constantly see what I call look-ma-no-hands issues. For instance, someone forms a corporation without understanding why he did that. People should consult those with knowledge and expertise when it comes to important decisions.

I have heard that grandparents get phone calls from kidnappers asking for ransom for their grandchildren. That is scary. The latest rumor is that, with artificial intelligence (AI), scammers can actually have the grandchild’s real voice being heard in the background of the phone call. This is pretty sick. It might be a good idea to have a family password to be used in emergencies.

How to Avoid Scams

Let’s lay out the new rules of life, the “twelve commandments” of scamming:

·         Assume that all unknown phone calls are fake. No one is calling you from the IRS or from Microsoft. And if they have a foreign accent, it is almost always a scam.

·         Never respond to an email telling you to “click here.” That could allow someone to take over your computer. I hope I do not need to warn you regarding Nigerian lotteries. Do not take the bait when someone calls or emails and offers you free money.

·         Monitor your bank and credit card accounts online every few days. Do the same with your elderly relatives. Look for irregularities.

·         Do not leave too much money in the checking account. In case someone gets access, why should they be able to get so much money?

·         Mail checks as infrequently as possible. Checks can be stolen right from your mailbox. Pay as much as you can online. You can pay the IRS, your phone bill, and BGE directly from the computer. Sending checks to these places is now considered to be dangerous and even crazy. You can give charity online, too, with your credit card. Why mail checks?

·         If your bank is telling you (via phone call or email) that there is a problem with your account, get into your car and drive to the bank and talk to someone there to determine the true story.

·         There is something called an affinity fraud: frum Jews fooling other frum Jews. Watch out for your friends who push investments. Mishpacha magazine recently had a great article on scams with an emphasis on affinity scams. Get advice before you leap.

·         Never sign anything. I heard a story about a young man who signed “some papers” to get his friend admitted to the emergency room. It turns out he took responsibility for payment and is now being sued for $100,000.

·         Never allow someone to put their business in your name. You will be responsible for all the taxes the IRS can dream up that one might owe. If fact, never do anything regarding money unless you have spoken to an accountant. Period. Do not open a business or a corporation, and do not give out your social security number. Do not sell stock. Do not sell your house. All these transactions need an accountant who understands the tax ramifications.

·         Timeshares are generally scams. Do not attend their sales presentations. Their “90-minute” presentations can take many hours plus and are super high pressure. My father told me, “Do not try to con the con men.”

·         Pyramid businesses are always scams. Stay away.

·         Receiving a strange text or WhatsApp message from someone who thinks they are your friend is a new scam. The goal is to cozy you up and then try to get money.

Email Ideas

I think that everyone needs three email accounts. One is for financial purposes, such as banking and credit cards, etc. Do not use your name for this, e.g., eli.pollock@gmail.com. Rather, use E&&&p@gmail.com. For shopping, I use AOL. That way, all the junk emails from retailers come to an unimportant email address. Lastly, use your real name for friends and family, e.g., eli.pollock3@gmail.com.

Credit Card Ideas

Purchase some prepaid Visa cards at Staples. (If you follow Dansdeals.com, you know about these cards and the link to Chase Ink cards.) I use prepaid cards for all the small, online charity appeals from Kupat Ha’ir and Chesed Fund, etc. That way, no one has access to my real credit card. You can also use these anonymous Visa cards for phone calls from charities that you trust.

Track your usage on Excel, so you know if an unauthorized charge comes up. If you think you are compromised, you can dump your remaining balance into your Amazon account, while your real credit cards remain secure.

Going Paperless

The more you go paperless the better off you will be. There’s no need to receive paper bank statements and bills from your cell phone company. All of these can be stolen out of your mailbox. Get rid of the clutter. You will be happier, more organized, and more protected.

Employees in the Home

When you are not sure of the reliability of people who are working in the home, such as cleaning help or aides for the elderly, be cautious about these things:

·         There should be no financial information in the house – no bank or investment statements lying around.

·         Jewelry and valuables must be removed or in a locked safe.

·         It is critical to install internet-connected cameras, so that the elderly person and aid can be viewed by the adult children at any time.

·         Photograph or video all the items in the house so you can determine if something is missing.

And Finally…

Internet sites also warn of romance scams. There are people who befriend the elderly and then ask for money. Yuck! In addition, there are warnings about online shopping sites that are fraudulent. I would stick with the ones you know. Remember get into the habit of discussing important matters with wise people before you leap. Reread the 12 commandments above from time to time. And pray hard.

Eli Pollock is a CPA in Baltimore and can be reached at elipollock2@yahoo.com.