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Older People Fraud – The Cost of Confusion

Written by Helen Burgess

The AgeSpace interview with Professor Keith Brown  gave us some worrying statistics: over 3 million elderly people fall victim to scams each year, with nearly £10 million estimated to be lost to fraud in 2016. The problem is that those who are most vulnerable – the elderly and the confused – are the most likely target of fraud.

Be open about money 

Perhaps the most important recommendation we can give is that you talk money with elderly relatives. There’s a strange reluctance in many families to be open and frank about financial matters and it sadly seems to be seen as a weakness to ask for help from the next generation when taking decisions about money. Encourage dialogue with your relatives about money – perhaps by talking about your own finances – and try to get them into the habit of talking things through before they make a decision.

Making your elderly relatives scam-savvy isn’t easy. Fraudsters prey on the lack of understanding that many people have about their finances. However, there are some fundamental messages that you can get across to them that might help.

Banking Security 

Firstly, banks and other financial institutions won’t ask for PINs or other personal information over the phone. In fact absolutely no-one has the right to ask for this information. This message is being pressed home through TV advertising, so hopefully most people will say no if asked, but beware of very official sounding callers – fraudsters pretending to be from the Tax Office, the Financial Conduct Authority or even the Police.

Pension & Investment Scamming

The second point to get home is that pension money has special tax treatment, but if you access your pension in an unsafe way, you could get hit with a serious tax bill. You need to be very wary of anyone who suggests that you move your entire pension pot overseas, for example, or of those who suggest you might convert an existing annuity into a huge cash pot. At best, you’ll be faced with a big tax bill – and at worst your money may disappear never to be seen again.

Then there’s the sticky subject of investments. Scams are widespread with people telling you that you can make a huge profit by putting your money into one scheme or another. Nigerian investment schemes feature heavily, but there are many more. There’s a simple rule of thumb here: if it sounds too good to be true, then it probably is.

Scammers often put pressure on their victims to make an instant decision, saying that the rate/investment/opportunity will only be available for a limited time. Make sure your relative understands that it’s a sure sign that there’s a fraud involved if heavy pressure is being applied.

The bottom line is that the scammers will be convincing: it’s how they make their money and they will be good at it. The only safe thing to do is not to begin a conversation with anyone who is unknown to you, as they will have a locker full of tricks and traps to use to capture information about you and to lead you down a path to separate you from your money.

Play it Safe 

The only safe way to get advice about pensions and investments is to use a financial adviser who is authorised and regulated by the Financial Conduct Authority (FCA). Advice from an authorised adviser is backed up by the Financial Ombudsman and the Financial Services Compensation Scheme so you have somewhere to turn if things go awry. The FCA has a register of authorised firms and individuals on their website. You can search for an adviser there. If the number of advice firms in your area is overwhelming, then ask friends or family who they use (provided it’s an authorised adviser), or ask other professionals such as lawyers and accountants.

For more information on Money & Finance visit our Norfolk pages.

About the author

Helen Burgess