One of my past clients stopped by yesterday eager to share with me a letter she had received in the mail promising her a fortune if she just provided her identification and a nominal processing fee. The letter was formal and official-looking. It included logos, rubber stamps, random identification numbers, and other details all designed to give the impression that this letter should not be ignored. It also included a sum of over $2.8M that was promised to them once they followed the instructions. They were excited, but a little skeptical and wanted to get my opinion.
Unfortunately, and unsurprisingly, this was a scam. Scammers purchase address lists directed toward the desired demographic, usually semi-affluent homeowners over the age of 60. The scam is based on volume. If they send out 10,000 letters, paying only bulk-rate postage and minimal printing and paper costs, and only a very small fraction responds with the requested funds, then they’ve made a profit. Of that responsive group, they only need a few more to continue sending in more imaginary filing fees, mail costs, claim fees, deposits, etc., to make really good money. Finally, the big pay day arrives when their “mark” submits personal information like drivers license’s, bank account numbers, and social security numbers allowing them to steal the innocent party’s identity.
The Authorities Are Aware
None of these scams are news to government officials. Due to the quantity and anonymity of these scammers, the best defense is target victim awareness. The Consumer Financial Protection Bureau, a government department, has produced a guide called “Money Smart for Older Adults” specifically addressing the issue of preventing financial exploitation. Find it here. The comprehensive fifty-five page guide discusses identity theft, financial preparation, and a host of common scams. I recommend my clients spend some time perusing it.
Err on the Side of Caution
After a life time of effort, retirees are ready to enjoy the fruits of their labor. Just as you will adjust your investments to be more conservative, you should to the same with peculiar offers. Question the motive of anyone offering you something that seems to good to be true or makes in any way uncomfortable. Ask your friends, family, and advisors. Don’t let scammers take advantage of your trust.