Fraudsters and scam artists have always been around, yet evolving instruments and technology make it increasingly simple for them to prey on their targets, particularly the elderly. To safeguard your loved ones (or yourself) from these con artists, it’s essential to arm yourself with an understanding of these scams’ operations and inform your loved ones on how to guard both their financial resources and emotional well-being.
In this duo-segmented feature, we will delve into four of the most current and cunning financial deceit tactics, illuminating their strategies and offering actionable measures to protect your dear ones from potential distress.
01 | THE GRANDPARENT SCAM
One of the most challenging aspects of falling prey to a scam is the emotional and psychological toll it often takes. Scammers deliberately employ tactics of urgency, panic, or guilt to deceive victims into hastily parting with their money for someone in “need.”
In the updated “Grandparent Scam,” con artists reach out to older individuals via calls or texts, impersonating their grandchildren. The trickster alleges they’re facing a crisis and urgently need the grandparent to forward funds to assist, whether it’s for bail, a flight back from a dangerous place, or to cover expenses from a car accident.
In such situations, the con artist often begins by inquiring, “Grandma, can you recognize who’s speaking?” This maneuver is designed to prompt the grandparent into disclosing their grandchild’s name, which the trickster then exploits throughout the conversation. The scammer will subsequently plead with the grandparent to transfer funds to “assist” the grandchild and urge them to keep it a secret from the child’s parents to avoid causing distress.
Certain con artists have now turned to AI to modify their voices during calls with grandparents, making their impersonation more believable. This deceit capitalizes on the deep-seated affection and worry our elders feel for their offspring and grandkids, and even the younger or tech-literate parents can be tricked.
To shield your loved ones from falling prey to such deceptions, remind them of the significance of never sharing personal, financial details, or the names of family members through text, calls, or emails. Advise them to ask the identity of the caller and patiently await a response. When uncertainty arises, the elder can pose personal questions that only a real grandchild would answer correctly, but a con artist will struggle with. Above all, urge your loved ones to reach out to you before transferring or wiring funds to any party, under any circumstances.
A tactic we highly recommend involves establishing a family code word or phrase. For instance, your designated phrase could be “Milo wears polka dots.” Every family member would be familiar with this phrase. So, in an emergency contact situation, the prompt might be: “What’s our family’s special phrase?” The caller’s success or failure in responding correctly will determine the appropriate action to take.
02 | PICKPOCKETING YOUR DIGITAL COIN PURSE
The realm of cryptocurrency introduces fresh investment prospects for the adventurous, but this emerging financial landscape also ushers in novel risks and protective precautions.
To keep your cryptocurrency, a digital wallet is required, serving as the most secure means to maintain your digital assets. Unlike a regular wallet that physically holds cash, your crypto wallet doesn’t “contain” funds. Instead, it safeguards passcodes, termed keys, enabling you to transact in digital currency through the wallet.
Wallets are categorized into two types: hot and cold. A “hot” wallet holds your cryptocurrency in a space linked to the internet—this includes exchange-driven wallets, desktop wallets, and mobile variants. Their internet connectivity makes hot wallets the most accessible, yet it also renders them the most susceptible to cyber-attacks.
On the flip side, a “cold” wallet keeps your cryptocurrency in a place that’s entirely disconnected from the internet. Paradoxically, the safest method for housing digital assets is the cold “paper” wallet. This entails physically printing your keys and safeguarding them in a protected spot. While paper wallets stand out as the utmost secure choice, misplacing the codes equates to losing tangible cash—signifying your investment is irretrievable.
Regardless of the type of wallet your loved one uses to store their crypto, if someone obtains the “key” to that wallet, they can access and siphon the funds without the need for hacking.
How the Scam Works
To access your wallet, fraudsters might tempt you into sharing your wallet’s key, posing as representatives from cryptocurrency entities like Bitcoin or Coinbase, or presenting themselves as crypto dealers. Once the swindler obtains your keys, your cryptocurrency is left wholly exposed, even if housed in a “cold” offline wallet.
Armed with the keys, the fraudster has the power to transfer your crypto from your wallet and vanish without a trace. Given that the cryptocurrency realm operates independently of traditional banking, retrieving stolen cryptocurrency becomes an impossibility.
To shield your loved ones from such deceptions, emphasize to them the critical nature of never sharing their wallet keys with anyone outside of trustworthy family members. This precaution is paramount to ensure the security of their crypto holdings.
Regardless of the storage method—be it a hot wallet, paper wallet, or directly on a crypto exchange—ensure your loved ones provide you with specifics about their crypto’s location and access procedures should they become incapacitated or pass away. Without this information, the assets could be irretrievably gone.
Should you be uncertain about locating or accessing your parent’s cryptocurrency in urgent situations, or unsure about strategizing for your own digital assets, please reach out to us. We’re here to assist in integrating your crypto details seamlessly into your estate plan.
Assisting You in Safeguarding Your Loved Ones
The financial well-being of your loved ones is a paramount concern that calls for forward-thinking actions, especially when confronting new scams targeting their susceptibilities. By staying alert and equipping yourself with insights about these deceptions, you can adeptly protect your family from getting tricked by these swindlers.
However, always bear in mind that dialogue is crucial. Engage in candid conversations with your loved ones, particularly your elderly parents, regarding these looming threats. Urge them to consult with you or a reputable expert prior to finalizing any financial moves.
At Dracheva Law, our mission is to navigate you through the complexities of ensuring your family’s financial legacy. We simplify the process of shielding your loved ones by aiding in the creation of estate planning instruments. These tools help in documenting and transferring digital assets such as crypto, establishing Powers of Attorney for asset management, and setting up Trusts to safeguard all they cherish for future generations.
Keep an eye out for our upcoming segment in this series, where we’ll delve into two additional financial scams essential for you and your loved ones to be aware of.
This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.