Financial Tip of the Week from the Iowa Bankers Association:
Reports of scam artists targeting senior citizens are popping up across the nation this month. The Better Business Bureau (BBB) is warning consumers of all ages about scams that are targeting the elderly – including the so-called "grandparent scam" and a BBB lottery scam. If you have elderly parents, grandparents or neighbors, you may want to talk to them about these new scams that are targeting seniors.
The BBB warns that well-meaning senior citizens who think they are helping a grandchild in distress are becoming victims of another wave of the so-called "Grandparent Scam." The BBB reports that scammers have targeted grandparents in more than a dozen states and Canadian provinces. In early February, the Wisconsin BBB issued a warning to seniors after an elderly couple lost more than $19,000 from scammers pretending to be the couple's grandson. The elderly couple was contacted by someone pretending to be their grandson's lawyer. The couple was told their grandson had been involved in a car accident in Canada and needed money to pay for his bail and damages from the accident. The couple was also contacted by a man identifying himself as their grandson, who advised them not to tell his parents about the accident. Both callers asked for money, and the Wisconsin couple wired funds eight times in six days before discovering their grandson had not been out of the state during the alleged dates of the accident and subsequent scam.
BBB Lottery Scam
Scammers have also been using the BBB name to steal money from victims who are led to believe they have won a lottery. In early February, the BBB reported that an elderly man had lost $80,000 to scammers posing as BBB employees. Con artists often use the names of a reputable company or organization in an effort to seem legitimate, and in this case, the scammers even used the names of real BBB employees as a part of their scheme. Scam artists claiming to be from the BBB contacted individuals by phone or e-mail and told them they had won a lottery and that to claim the prize, they must first wire money back to the scammers to cover fees or taxes. The BBB reminds consumers that the organization does not run a lottery nor award prizes to consumers.
Tips to Avoid Being Scammed
Here are a few tips to help you avoid becoming a victim of these types of scams.
• Make sure the story checks out. If you're contacted by an organization, be sure to confirm the facts directly with the organization. Use contact information that you find rather than relying on phone numbers or Web links that you are given by phone or e-mail. If you're contacted by a family member asking for financial assistance, don't be afraid to call other family members to confirm the story.
• Never pay money to get money. Lottery scammers make their money by convincing victims that they have to pay money up front—to cover such costs as taxes or fees—in order to receive their winnings. Scammers often use wire transfer as their payment of choice because it is difficult for a victim to track.
• Don't fall for the phony check. Realize that fake lottery notifications and fake checks can look very real. Scammers will often send a check in the mail to victims with the instructions claiming that in order to receive the full prize, you must deposit the check and wire back a portion of the funds to cover fees or taxes. You may deposit the check in your account and assume it will clear, but when the fake check is discovered days or weeks later, the funds are then taken out of the your account and you are out any money sent to the scammer.
• Don't wire money to someone you don't know. No legitimate company will offer to pay you by arranging to send you a check and asking you to wire some of the money back. If that's the pitch, it's a scam.
• Report the incident. If you have been contacted by someone posing as a Better Business Bureau employee, contact your local BBB and report the incident.
These financial tips are provided by the Iowa Bankers Association (IBA), representing banks and thrifts in the state. For more information go to www.iowabankers.com.