Posted on Wednesday December 12, 2018

Protecting yourself from the rising number of grandparent scams

The year 2022 saw a dramatic increase in the number of grandparent scams, a type of fraud that hinges on a supposedly urgent need for money. Unfortunately, the trend has remained stubbornly on the rise, prompting the Royal Canadian Mounted Police (RCMP) and Canadian Anti-Fraud Centre (CAFC) to issue a warning for 2023.

Millions of dollars’ worth of fraud has already been reported, but CAFC complaints account for only a small percentage of scams. Learn how to identify and protect yourself from fraud against seniors.

What is a grandparent scam?

Imagine that someone travelling with your granddaughter calls you and says that she’s in a hospital in Indonesia. She hurt herself while surfing, and her medical care isn’t covered by her insurance. Since she urgently needs money and has been unable to reach her parents, he asks you to send her $2,000. Unwilling to let your granddaughter suffer any longer, you do what he asks.

Imagine that someone travelling with your granddaughter calls you and says that she’s in a hospital in Indonesia. She hurt herself while surfing, and her medical care isn’t covered by her insurance. Since she urgently needs money and has been unable to reach her parents, he asks you to send her $2,000. Unwilling to let your granddaughter suffer any longer, you do what he asks.

But is this friend of your granddaughter’s real? Fraudsters exploit your fears and take advantage of you while your emotions are running high. They may claim to be a family member or a lawyer, for example, and try to extract funds from you by saying that someone you love is ill, has had an accident, or has been arrested.

Grandparents are more likely to send money for a bond, legal or medical expenses, or any other reason if they believe their grandchild needs their help. In so doing, they become the victims of a growing type of fraud: grandparent scams.

Urgency and secrecy

Typically, the fraudster calls a senior, pretends to be their grandson or another family member, and says he’s in trouble. He tells his story and asks for money.

The strategy is designed to create a sense of both urgency and secrecy. For example, he says his parents will be mad if they find out and asks you not to talk about it. In other cases, the fraudster may claim that a court-issued gag order makes it illegal for you to talk about it. He then offers to send someone for the cash or asks you to send it by courier.

Easy targets for grandparent scams

People who are tired, stressed and isolated are more likely to fall prey to scammers. The Canadian report on the social isolation of seniors shows that frail health, old age (80 or older) and a lack of easy access to transportation are all factors that can increase the feeling of isolation. For instance, a newly widowed senior who has recently moved or someone who is losing their independence and having trouble getting out of their home make for perfect marks.

The hearing loss that affects many seniors can also make it hard to recognize a granddaughter’s or grandson’s voice and thus detect the scam.

So different people have different levels of vulnerability, depending on their situation. At UNI, we take care of people age 60 and older and are committed to looking out for your needs throughout your life. If you find yourself in this kind of situation, please do not hesitate to contact us before making the decision to give someone money.

Preventing fraud that hinges on an urgent need for money

In 2021, New Brunswickers reported $265,050 in losses related to an “urgent need for cash.”

There are simple solutions that can help you prevent fraud portraying an urgent need for money. When it comes to finances, any reference to “secrecy” made by the person on the other end is a red flag. You can always hang up and call back the family member claiming that there’s an emergency using the phone number you already have for them.

Preventing fraud: A family affair

If you’re a grandchild who cares about your grandparents, take the time to discuss fraud with them. Explain how to deal with suspicious calls. Set up a system, like creating a code word that they can use to make sure it’s you on the phone.

And be sure to explain to them what happens when personal information is shared on social media. Fraudsters can find all kinds of useful information on social media, such as the names of any grandchildren.

Report attempted fraud

CAFC encourages victims to report fraud and attempted fraud by calling 1 888 495-8501 and filing a statement with local police. Your statement could help fight fraud in Canada.

Other types of fraud targeting seniors

There are a number of common scams that target seniors.

Investment and romance scams

Investment scams, especially involving cryptocurrencies, are creating considerable pain in New Brunswick, but so too are romance scams. In this type of fraud, the scammer claims to be looking for their soulmate. Once the scammer has your complete confidence, they’ll ask you for money for a personal emergency or to help pay their bills.

Selling under pressure

Seniors can also fall prey to pressure sales. Here, the fraudster uses very aggressive techniques, such as limited-time offers, to get you to invest quickly or to sign a contract.

Fake message from the Canada Revenue Agency

Every year, fraudsters try to impersonate Canada Revenue Agency (CRA) employees. They ask for your personal information to “send you your tax refund.” The fact is that the CRA will never, under any circumstances, send you a text or email asking you for personal information.

Urgency and money do not mix. We rarely make good decisions under pressure. So when you make choices that involve your savings, take your time, be careful and perform the necessary checks and balances.

Tips you can use

Here are a few things you can do to avoid falling prey to fraud.

1. Never answer suspicious calls.
2. Never reply to a suspicious email or text message and never click on suspicious links or attachments.
3. Never provide your personal and financial information.
4. Be wary of people asking for money transfers.
5. Report any suspicious activity to the police.

And remember: when in doubt, talk to the people around you!

We encourage you to explore the resources available for preventing and reporting fraud. Our advisors are here to support you and answer any questions.