My senior citizen neighbor was about to go to his bank to initiate a $4000 payment, per the request of a man who he thought was a helpful investment banker. I would have thrown myself on his driveway to stop him. Fortunately, less drastic measures prevailed. This post is a departure from my usual B2B payments focus because the topic is so important. The FBI estimates that senior citizens lose more than $3 billion each year to financial scams. I am not surprised. My neighbor never suspected anything was amiss. Following is what happened, along with tips you can share with the seniors in your life.

What Happened

My neighbor (“Jim”) wanted to get rid of the timeshare he and his wife had enjoyed for more than 20 years. He called the resort where the timeshare was located to inquire about his options. He spoke with someone who said “Michael” could help. Subsequently, Jim had an extensive phone call with Michael, who explained the resort was about to go public. He said that Jim owned more than 100 shares and could get around $80,000 for his timeshare, but he needed to set up an account with Michael’s company first. Then he emailed Jim an application to complete. This is when I entered the picture.

Jim called me for technical help with the PDF application. Besides having an unprofessional appearance, it was labeled as a trading account application that required numerous personal information. I politely asked Jim about what he was doing. After learning more, I asked him to pause and let me research Michael’s company before he took further action.

My research revealed more red flags, so I emailed Michael to request more information. He ignored my email and kept calling Jim, urging him to act because Jim would lose out if the deal was not completed that day.

I basically pleaded with Jim to not provide any personal data or payments until I could get some answers. However, as indicated in the introduction above, I ultimately caught Jim as he prepared to go to his bank. Michael had instructed him to initiate a payment to a major bank in New York; it was the only way for Jim to not lose out. I convinced Jim to allow me to call Michael and have a three-way conversation. I nicely asked Michael for more information, but he reiterated the urgency of the matter. His irritation with me was obvious. Soon he abruptly ended our call and called Jim again directly. According to Jim, Michael was not nearly as pleasant as he was during their earlier calls. By this time, it was after 5 PM. Jim decided to abandon the deal.

Resource

Tips

Take the time to do some research before acting on anything.
If you plan to sell something, go back to your original contract or purchase agreement to look for details about how to terminate or sell. Further, connect with the right professional who can assist or at least help direct you on next steps.
Be skeptical about any deal that promises a large sum of money, especially if you have to provide money first to later receive a promised payment.
Request documentation that specifies the terms and conditions of the deal, as well as provides appropriate disclosures. Then ask a trusted friend/family member or qualified professional to review.
Evaluate the person you are dealing with. Red flags include pushiness, deals that expire if you do not act now, an unwillingness to provide additional information, etc.
Do an Internet search of the person’s email address. What are the results? Does the person’s email address exactly align with the company URL (website address)? For example, both my email address and company website URL reflect recharged-education.com. Michael did not pass this test.
Search/Google the company name. Is there a website? What does it look like? Do search results display any complaints about the company?
Look up financial representatives and/or firms using the BrokerCheck tool offered by FINRA and/or the SEC’s search tool.
Consider adding a “Trusted Contact” to your accounts; here is one resource to learn more: https://www.schwab.com/learn/story/why-you-should-establish-trusted-contacts.

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About the Author

Blog post author Lynn Larson, CPCP, launched Recharged Education in 2014. With 20 years of commercial card experience, her mission is to make industry education readily accessible to all. Learn more…