You receive a letter from the Spanish National Lottery saying they drew your numbers, and you have won close to $700,000! Has this ever happened to you?
To claim your prize, they need you to pay the taxes in advance (5% of your total winnings) and you need to provide some personal and banking information. You have 2 weeks to claim your prize, and you are asked to fax the completed forms direct to the tax collector, or if you prefer, you can call a phone number listed in the letter.
This is the luckiest day of your life! After all, what are the odds that, with over 320 million people living in the United States, and a world population over 7.3 billion, they happened to find YOU!
Add to that the fact that you did not buy a Spanish Lottery ticket and you have never been to Spain!
It sounds too good to be true, doesn’t it? This is because IT IS TOO GOOD TO BE TRUE!
This letter is a classic example of what is known as a “Nigerian Letter Scam”, aptly named after the scam’s country of origin, but which has since spread to other countries. The scams are still often perpetrated by Nigerians living in Nigeria, or in other countries such as Spain in the example above, but can be run by anyone anywhere.
How do these scams work?
The bad guys use spyware, viruses, phone books, directories, lists of names, and other sources to obtain names and addresses of targets. Next, they send out “phishing” letters, hoping someone will bite! Once you wire the money, it’s gone, and odds are you will likely never hear from them again.
Occasionally, some scammers have been brazen enough to send another letter or call back to request more money saying they underquoted you on the taxes due, or are asking for additional processing fees.
Such campaigns are highly successful, bilking thousands of people out of their hard earned money annually!
Fraud and scams are on the rise, and everyone is a potential target
However, senior citizens are especially vulnerable. A few reasons why:
- They are viewed as being more trusting
- They typically have retirement savings
- They tend to shop over the phone
- They’re more likely to be forgetful or suffer from memory loss
It is estimated that seniors are defrauded out of over $36 billion per year!
Most common scams
In addition to the Lottery example, here are additional scams you should be aware of:
Telephone Spoofing
You receive a phone call from a hijacked phone number of a trusted, reputable source (a government agency or a business) so the ID of the trusted source displays on your caller ID. The individual calling attempts to collect personal, sensitive information as a form of data verification. These calls can come through as IRS collection calls, sweepstakes winnings, free or discounted vacations and investment opportunities, just to name a few.
e-Mail “Phishing”
You receive an email from your bank, saying your account is overdrawn due to a debit card purchase or a bounced check. The e-mail is urging you to take immediate action by clicking on a link to what appears to be the bank’s website or by calling the bank phone number.
e-Mail Spoofing
You receive an email that appears to be from a trusted source, when that is not the case. The bad guys are hoping you will open and respond to their solicitation by offering the information they’re requesting, such as your bank account number, social security number or other sensitive information.
Family Member In Trouble
An imposter calls you posing as your distressed grandchild in trouble, citing financial trouble or trouble with the law, asking for money to help get them out of a jam. This request is usually followed by the request to keep things under wraps so they don’t get in trouble with the parents, or the law.
Hostage Situation
You receive a phone call from someone claiming to be holding your child or grandchild hostage and demands money in exchange for a safe return of your loved one. In this situation, there is usually NO hostage. The caller tries to keep you on the phone so you cannot call your loved one to verify if they are really being held hostage.
Medicare Fraud
You receive an offer (via phone, email or in person) for free or discounted medical equipment or services. All that is needed is your Medicare insurance information. Later you find out that there were several claims filed under your name for unnecessary items or items never you never received.
The scams listed above are just some of the most common scams out there, there are more!
How to protect yourself and your loved ones
To help safeguard yourself from being a victim, here are some important tips on what you can do:
Get on the Federal “Do Not Call List”
This list blocks many, but not all, unsolicited calls. You will still receive unsolicited calls because some scammers will ignore the law, but the number of calls may drop significantly. Make sure you report any unsolicited callers to “www.donotcall.gov”. There are also services available that will block calls from robots (robocallers) or known scammers.
Always be on red alert
Anytime someone calls you, sends you a letter or an e-mail and then asks you to provide information such as your social security number, bank account number, or other sensitive information, you should automatically be on red alert. Don’t do it. A legitimate company will never call YOU, asking for such information. There are other ways a legitimate company that you do business with can verify your identity.
Go the the direct source
If you receive an email from your financial institution asking you to click on a link to submit urgent paperwork or you receive an email from PayPal asking you to click on a link to reset your password because your account has been hacked – DON’T! Go directly to the site to make sure this is a legitimate request. In most cases there will be some sort of notification or message waiting for you with instructions.
Don’t fulfill requests for money transfers or wires
Don’t get excited by the promise of a large sum of money in the future (lottery scam). Remember that sending a wire is the same as sending cash! If you did not buy a ticket, how could you possibly win? If someone asks you to send them money first, don’t do it! It’s illegal for someone to require up-front payment before funding a loan or paying out a sweepstakes prize.
Check your credit report periodically
Or better yet, subscribe to an ID theft protection service that monitors your credit reports for you and reports back to you quickly.
If you suspect you are a victim of fraud or attempted fraud, contact the Federal Trade Commission (FTC). Finally, remember the old adage: “If it sounds too good to be true, it is!”
