Fraudsters and scam artists are nothing new, but ever-changing technology is making it easier than ever for scammers to target victims, especially seniors. To protect your parents (and yourself!) from these scams, educate yourself about how they work and what your loved ones should know to keep their assets and peace-of-mind safe.
In this two-part series, we’ll talk about four recent financial scams that have surfaced, shedding light on their tactics and providing you with practical steps to shield your parents from potential harm.
01 | THE GRANDPARENT SCAM
One of the toughest parts about being the victim of a scam is the emotional and mental stress it usually causes. Scammers intentionally use urgency, alarm, or guilt to trick victims into making hurried decisions to send money to someone who needs “help.”
In the new “Grandparent Scam,” fraudsters will call or text senior adults pretending to be their grandchild. The scammer will claim that they’re in trouble and need the grandparent to send them money right away to bail them out of jail, buy a ticket home from a dangerous location, or pay for damages caused by a car accident.
The scammer will usually ask the grandparent, “Grandma, do you know who this is?” to trick the grandparent to reveal the name of their grandchild, so the scammer can use that name for the rest of the phone call. The scammer will then ask the grandparent to wire money to “help” the grandchild and ask that the grandparent don’t tell their family members for fear of them getting upset.
Some scammers are even using AI to disguise their voice while on the phone with the grandparent to sound more convincing. This scam preys on the love and concern our parents have for their children and grandchildren and can easily cause younger and even tech-savvy parents to fall victim as well.
To protect your parents from being victimized by this scam, talk to them about the importance of never disclosing personal, financial information, or the names of their loved ones in a text, phone call, or email. Instruct them to ask who the caller is and to wait for the sender or caller to respond. If in doubt, they should ask the sender personal questions that only their real grandchild would know, but a scammer wouldn’t. Encourage your parents to contact you before wiring or transferring money to anyone for any purpose.
One strategy we particularly love is to have a family code word or phrase. For example, your code phrase may be “Cosmo is a spotted dog,” and that code phrase would be known by everyone in the family. If anyone is contacted in an emergency situation, the person could ask what’s our family code phrase, and the person calling, texting, or emailing either knows it or doesn’t. If they don’t, it’s a no-go for help.
02 | PICK-POCKETING YOUR CRYPTO WALLET
The world of cryptocurrency brings new investment opportunities for those willing to try it out, but with this new financial arena comes new risks and safety measures.
To store cryptocurrency, you will need a digital wallet, as that’s the safest way to hold your cryptocurrency. Your cryptocurrency wallet doesn’t actually “store” money like a traditional wallet; it stores passcodes, known as keys, that allow you to send and receive digital currency to and from the wallet.
Wallets come in two forms: hot and cold. A “hot” wallet stores your cryptocurrency in a location that’s connected to the internet—exchange-based wallets, desktop wallets, and mobile wallets. Because they’re connected to the internet, hot wallets are the most convenient, but also the most vulnerable to hacking.
A “cold” wallet, conversely, stores your cryptocurrency in a location that’s completely offline. The most secure type of wallet for storing digital currency is a cold “paper” wallet. Paper wallets involve printing out your keys and storing them in a secure location. While paper wallets are the most secure option, if you lose the codes, it’s the same as losing paper currency—meaning there is no way to recover your investment.
No matter what kind of wallet your loved one keeps their crypto in, anyone with the “key” to that wallet can access and steal the funds - no hacking required.
How the Scam Works
To gain access to your wallet, scammers will lure you to give them your wallet’s key by pretending to be
representatives of a cryptocurrency company like Bitcoin or Coinbase, or by portraying themselves as a crypto broker. Once the scammer has your keys, your cryptocurrency is completely vulnerable, even if it’s kept in a “cold” offline wallet.
With the keys, the scammer can move your crypto out of your wallet and disappear with it forever, and since the cryptocurrency market is not attached to the banking system, there is no way to recover cryptocurrency once it’s stolen.
To help protect your parents from these scams, talk to them about the importance of never sharing their wallet keys with anyone besides you and any other trusted family members. This is essential to keep your parents’ crypto investments safe.
Whether your loved ones have crypto in a hot wallet, paper wallet, or directly in a crypto exchange, make sure they have a plan to store their crypto and that you know how to access it in the event they’re incapacitated or die. Otherwise, it’s completely lost.
If you don’t know how to find and access your parents’ cryptocurrency in an emergency or don’t know how best to plan for your own crypto, consider discussing with an attorney how to include your crypto information in your estate plan.
Helping You Protect the Ones You Love
Your parents’ financial security is a priority that demands proactive measures, especially in the face of emerging scams that exploit their vulnerability. By remaining vigilant and arming yourself with knowledge of these scams, you can effectively shield your family from falling prey to these fraudsters.
Communication is key. Talk openly with your parents about these potential risks and encourage them to reach out to you or a trusted professional before making any financial decisions.
At Rayboun Winegardner, we're here to guide you through the intricacies of safeguarding your family's financial future and can make it even easier to protect your parents by helping them establish estate planning tools, like powers of attorney and trusts, to protect, manage, record, and pass on assets including crypto.
To learn more about these tools, schedule a call with us today by emailing the address below, and stay tuned for the next installment of our series, where we’ll dive into two more financial scams you and your senior parents need to know about.
This article is a service of Rayboun Winegardner, PLLC, a Personal Family Lawyer® Firm. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session.
The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.
Yorumlar