By Nathan Vinson
Between our phones and our e-mail, everyone in America (and likely around the world) is hit with scams every day. We’re promised millions by the wife of a dead African dictator, or told that the caller is from the IRS and needs payment of back taxes immediately. Door-to-door sales people tell us there is something wrong with our roof. Insurance flyers attempt to scare us into thinking that something horrible will happen if we don’t buy their insurance.
Most of us brush this stuff off without a thought. We hang up on the scammers, delete those spam e-mails and move on. But for the elderly, it’s hard to tell the difference between a genuine offer that needs our attention and fraud.
While we all fear looking stupid or gullible, what’s truly frightening for an elderly person is the prospect of looking dumb in front of someone we love and trust. Asking for help as you get older is difficult. Scammers know this – and push the elderly into it by insisting their offer is for a limited time or that dire consequences can result if they don’t act right now.
A recent study by AARP and FINRA (Financial Industry Regulatory Authority) Foundation indicates that by inciting excitement or anger, the elderly are more likely to make a purchase. This is an excerpt:
The research team – Ian Gotlib, Ph.D., Katharina Kircanski, Ph.D. and Nanna Notthoff, Ph.D. – examined whether inducing excitement and anger increases susceptibility to fraud in older adults (ages 65-85) and younger adults (ages 30-40). The team used a laboratory task to induce participants to exhibit excitement or anger; a control group was not induced to exhibit any particular emotion. Participants then viewed eight different advertisements that had been designated by the Federal Trade Commission as misleading. For each one, participants were asked to rate the believability of the content and the likelihood that they would purchase it if cost were not a consideration.
In short, emotions didn’t affect those in their 30s to 40s. Their desire to buy or not buy something didn’t change if they were angry or excited. But the elderly were more likely to make a purchase if they were angry or excited, the AARP and FINRA Foundation study indicated.
For those of us in estate planning, this is one of our great fears: will a client give their money away to a huckster or scam, or make an unwise investment? We do all we can to prepare our clients to preserve their estate, but if they spend their money unwisely, we can’t protect them.
If you are entrusted with the care of someone who is elderly, such as a parent, relative or friend, talk to them about the potential for a scam. Discuss with them what to do when someone calls and wants their credit card information, or when they get an e-mail with an incredible offer in it. Make the following points with them:
- No legitimate offer truly expires within a few hours or a few days. And even if it does, there will likely be a new offer available.
- If you feel pressure to buy or give money to someone, that’s a sign that something isn’t right.
- Don’t give your credit card, bank account or any other personal information to someone who calls you on the phone.
- It’s OK to ask for help from you or another trusted advisor if you’re uncertain.
- If you do not have one, get an answering machine and screen calls. Don’t answer unless you know the caller.
- It is not rude to hang up on people who want money or want to sell you something.
- Don’t let anyone into your home unless you know them. If you believe this is someone you may want to do business with, ask for a business card. A legitimate business person will have one. Tell them you want to speak to a family member about their work and you will get back to them.
- If you live alone, do not disclose that to anyone.
- The IRS will never call you. Anyone who calls you and says they are from the IRS is trying to trick you.
If you need assistance with estate planning or tax matters, please contact me, Nathan Vinson. You can reach me at firstname.lastname@example.org or (270) 781-6500. We’ve worked with many families to help plan their estates, and we’d love to help you.