If you’re over 50, you are likely to fall victim to a scam. With new technologies being developed all of the time (and a wealth of new opportunities for scammers), those of us born prior to the technical revolution find oursevles especially vulnerable. Therefore, I am running a 3-part series written by Ismat Mangla for the Experian blog, “My Relatives Fell For This New Scam: Be On the Lookout!”
PART II (Please see my previous post for Part I of this series.)
The Evolution of a Scam
Scammers are also experts at developing sophisticated and convincing stories in order to persuade you to work with them. When I called Utility Savings Expert posing as a customer to inquire about their services, I asked how they were able to offer these discounts.
“We have accounts and contracts with service providers all over the U.S.,” said Naveed, who declined to give me his last name. He added that the company earned gift cards from these contracts, which they used to pay the bills.
They could then pass on the savings to customers, whom they only charged half the price of the bill due. This explanation was convincing enough for my relatives to fall for the scam. (When I called the company a second time, no one answered or returned my calls.)
None of the scam experts I spoke to had ever heard of this particular phone scam, nor did a Google search turn up any information on the company. But neither were they surprised by the phone scam’s new incarnation.
“I’ve heard and seen a lot of phone scams, but not that one,” says Curtis Bailey, an elder law attorney in St. Louis, who also hosts a fraud podcast called Scamcast. “These scammers just continue to evolve and change. I can see how easy it would be for people to fall victim to this one, because who doesn’t want to pay less for a phone or utility bill?”
Frank Dorman of the Federal Trade Commission, which handles these types of scams, says that the agency has never logged this particular scheme. The FTC advises never to do business with someone unless you know and trust them—and especially never to send money or financial account information.
“In this case, a phone call to the utility company should reveal whether or not the utility has an arrangement with a third party, and if not, which likely, report the scam to state and local law enforcement and the FTC,” says Dorman.
Another twist in this particular scheme: The scammers spoke to my relatives in Urdu, which is their native language. Bailey says that doesn’t surprise him at all, as fraudsters will often exploit affinity relationships to build trust.
“A lot of people don’t understand that what makes scammers more effective is that they will push certain emotional levers like fear and greed. But another one is sympathy,” says Bailey. “A victim might think, ‘I identify with the caller and trust him because he’s speaking my native tongue.’ This is just another tactic these criminals use to generate a false sense of trust so the victim will be manipulated into sending money or give out personal information.”
The Likely Victims
Indeed, True Link Financial’s study concluded that $6.7 billion worth of senior scams occur because the criminals take advantage of a trusting relationship to scam seniors.
Amy Nofziger, a fraud expert at the AARP, says that scammers specifically target older Americans because they are more likely to be successful with them.
Older adults often don’t want to seem rude on the phone, and they are often more vulnerable because they are living on fixed incomes. Many older Americans have also built up some wealth, making them an attractive target. Sometimes, their decision-making skills have been affected: a study at the Boston College’s Center for Retirement Research found that such skills decline about 1% each year after the age of 60.
And while cognitive decline can certainly contribute to a victim’s vulnerability, you don’t have to experience cognitive decline to be a victim. In fact, a new study in the American Journal of Public Health concluded that each year, 1 in 18 “cognitively intact” older adults become victims of financial scams or abuse.
And once someone is the target of a phone scam or other fraud scheme, it’s very likely that they will be targeted again, says Parshall.
“These criminals share ‘suckers’ lists—they are a commodity bought and sold between various scammers. They also target people who engage in certain activities, like playing the lottery or things like Publisher’s Clearing House,” she says.
Because these crimes often go unreported and cause a lot of shame and embarrassment to the targets, they are even more susceptible to falling victim more than once.
Check back tomorrow for the third part of this 3-part series!
Ismat Sarah Mangla is a veteran journalist with a background in writing about money and religion, though not necessarily at the same time. She previously served as the religion reporter for International Business Times and spent several years as a staff writer at Time Inc.’s Money magazine, where her work earned a Gerald Loeb Award, a SABEW Best in Business Award, and a Henry Luce prize, among others. Her writing has appeared in Time, Fortune, Money, CNNMoney, Quartz, MarketWatch, Al Jazeera America, International Business Times, USA Today, The Washington Post, The Detroit Free Press and Michigan Alumnus magazine. In another life, she was also the founder and editor of Nirali Magazine, a popular website for the South Asian diaspora. Ismat is a graduate of the University of Michigan and the Columbia University Graduate School of Journalism.