Federal Regulators Warn Older Americans About Pension, Investment, and Online Scams
The FDIC and the Consumer Financial Protection Bureau held an educational session this week on scams that target older adults, including veteran pension schemes and investment fraud. AARP research estimates Americans age 60 and older lose more than $28 billion every year to elder financial exploitation, which includes both scams and abuse by trusted people.
Two federal regulators are urging older Americans to stay alert to financial scams. The Federal Deposit Insurance Corporation and the Consumer Financial Protection Bureau held an educational session on Wednesday, October 28 as part of their Money Smart for Older Adults program, which has been running since 2013. HousingWire reported on the event.
The numbers show why the warning matters. Research from AARP estimates that Americans age 60 and older lose more than $28 billion every year to elder financial exploitation. That figure covers scams by strangers as well as financial abuse by trusted people, such as relatives and caregivers who misuse an older person's money.
The regulators highlighted several common schemes. One targets veterans. Scammers charge fees to file for veterans benefits, even though filing is free. Others offer veterans a lump sum buyout of their future pension payments. These deals are often loaded with hidden fees and bad terms.
Investment fraud was another focus. That includes Ponzi schemes, annuities that are wrong for the buyer but pay the seller a steep commission, and affinity fraud, where a scammer exploits trust inside a church, club, or community group. The officials repeated a timeless rule: if it sounds too good to be true, it probably is.
The agencies offered practical steps for checking out anyone who offers you an investment. You can look up a broker's record for free using FINRA's BrokerCheck tool, and you can verify financial advisers through databases run by the Securities and Exchange Commission. Never buy a product you do not understand, and never let anyone pressure you to invest quickly. A legitimate professional will give you time to think it over.
Online safety also came up. The regulators advised keeping software up to date, using strong passwords, and turning on multifactor authentication, which asks for a second step such as a code sent to your phone when someone tries to log in to your account. They also warned against using public Wi-Fi for banking or other sensitive business.
If you believe you or a loved one has been targeted, contact your bank right away and report the matter to local law enforcement. Acting quickly gives you the best chance of stopping a payment before the money is gone for good.
Go Deeper
How much do older Americans lose to financial exploitation each year?
AARP research estimates that Americans age 60 and older lose more than $28 billion every year to elder financial exploitation. That includes scams by strangers as well as financial abuse by trusted people such as relatives and caregivers.
What is the veteran pension scam?
Scammers charge veterans fees to file for benefits, even though filing is free. Others offer a lump sum buyout of future pension payments, and those deals usually hide steep fees and bad terms.
How can I check if a financial adviser is legitimate?
Use FINRA's free BrokerCheck tool to look up a broker's record, and verify advisers through databases run by the Securities and Exchange Commission. Never invest in something you do not understand.
What is multifactor authentication and why does it matter?
It adds a second step to logging in, such as a code sent to your phone. If a scammer steals your password, that second step makes it much harder to break into your account. It greatly reduces the risk of unauthorized access, though no safeguard is perfect, so stay alert for messages asking you to share codes.
What should I do if I think I was scammed?
Contact your bank immediately and report it to local law enforcement. Acting fast gives you the best chance of stopping a payment before the money disappears.
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