A Money Talks News reader named Joan contacted me a few years ago with a story I’d heard often in my decades as a consumer reporter.
She was 76 years old, widowed, and had recently placed a phone call from a man who said he was from the Internal Revenue Service. He told her there was a warrant out for his arrest for tax fraud. Local police were going to her house until she went to the bank, withdrew $8,000 and put it in a Bitcoin ATM at a gas station three miles away.
She was halfway out the door with her car keys when something stopped her. He put the keys down and called his son. He told her softly that the IRS doesn’t make phone calls. It sends letters.
He didn’t lose money, but he almost had it. And the only thing that saved him was a moment of doubt.
Most people think they are too smart to fall for these scams. Most people are wrong. I have interviewed dozens of people over the years who were victims of fraud. This isn’t just sad, it’s heartbreaking.
According to the Federal Trade Commission Annual report to Congress in 2024Total fraud losses reported by older adults (ages 60 and older) increased nearly fourfold from 2020 to 2024, from about $600 million to $2.4 billion. And the FTC believes that actual losses (mostly fraud not reported) could be closer to $81.5 billion.
Scammers are smart, organized and increasingly using artificial intelligence. The good news is that most scams follow a simple pattern. Learn the patterns, and you’ll stop being a victim.
Here are seven rules to know.
1. The government does not call you
Repeat it out loud. The IRS doesn’t call you. The Social Security Administration does not call you. Medicare doesn’t call you. The FBI doesn’t call you.
These agencies communicate primarily through mail. They will never threaten you with arrest, demand immediate payment, or ask you to wire money or purchase gift cards. Anyone who claims to be from a government agency on a phone call is, with rare exceptions, a scammer.
according to a ftc analysisIn 2024, 41% of older adults who reported losing $10,000 or more to a business or government fraud scam said the scam started with a phone call.
Hang up. Every time.
2. Don’t transfer money to ‘safe’ it
It’s the playbook for what the FBI calls the “Phantom Hacker” scam. Someone calls claiming that your accounts have been compromised. They tell you that the only way to keep your money safe is to wire it to a secure account, withdraw it as cash to couriers, or convert it into gold or cryptocurrency.
It is always a scam. Every time. CNBC said, citing FTC data, informed Older adults lost $700 million to fraud scams in 2024 – a more than five-fold increase from 2020.
No legitimate bank, government agency, or company will ever ask you to transfer money for safekeeping. If you’re ever asked to do so, hang up and call your bank using the number on the back of your debit card.
3. Be deeply skeptical of urgency
Almost every scam depends on urgency. “You must pay within the next hour or you will be arrested.” “Your account will be closed at midnight.” “Your grandson is in jail and needs bail money right now.”
Real organizations don’t work that way. They give you time to think, verify, and consult others. Scammers especially cause panic because panic impairs your judgment.
The simplest defense: Any unexpected message demanding immediate action is a scam unless proven otherwise. Reduce speed. Hang up. Call back using the verified number.
4. AI voice cloning is real – set a family code word
This is the newest horror. Scammers can take a 30-second clip of your grandchild’s voice from social media and clone it well enough to put out a fake “I’m in trouble, send money” call. The voice on the other end sounds exactly like the person you love.
Prevention is simple: Choose a family code word. Tell your children and grandchildren. Let anyone know who may call you in case of an emergency someday. If someone calls in trouble and asks for money, then ask in code word. If they don’t have it, hang up.
that sounds weird. it. As I covered in “Over 60? Beware of 3 New Scams Depleting Retirees’ Bank Accounts,” AI voice scams have become widespread. Five seconds of awkwardness asking for the code word is worth $15,000 in protected savings.
Quit immediately – Most internet financial advice comes from people who weren’t alive during the last recession. I’ve been writing about money for over 40 years. Do you want concrete advice? Sign up for the free Money Talks newsletter. It takes 10 seconds. No sparkles. no spam.
5. Be wary of investment pitches on social media
Investment scams now top the FTC’s list of the most harmful fraud categories. According to FTC’s 2024 data McKnight Senior LivingOlder adults lost $744 million to investment scams in 2024 – more than any other type of fraud.
These are often “pig slaughter” schemes. A friendly stranger meets you on Facebook, Instagram, WhatsApp or a dating app. Over weeks or months, they form a relationship. Ultimately, they introduce you to an “amazing investment opportunity” – usually crypto.
They show you a fake trading platform that displays increasing balances. When you try to withdraw, there is always another “fee” or “tax”. Your money is gone.
Avoidance: Any investment made by someone you met online is a scam. Duration. Real financial professionals do not recruit clients through Facebook DMs.
6. Close your contact channels
Some practical hygiene that stops scams before they reach you:
- Sign up for the National Do Not Call Registry donotcall.gov.
- Use call-blocking apps or security features built into your phone.
- Don’t answer numbers you don’t recognize – let them go to voicemail.
- Mark suspicious texts as spam and block the sender.
- Set up transaction alerts on each bank and credit card account.
I never answer unknown callers. Sometimes. They can leave a voicemail.
7. Call a trusted person before any unexpected money decisions
This may be the most powerful defense in the toolkit.
Choose one person – a child, sibling, financial advisor, lawyer, close friend. Make a deal with yourself: Before you send money, withdraw money, buy gold, buy a gift card or make any unexpected financial move with an outside contact, you call that contact first.
Almost every successful scam depends on alienating the victim. The scammer says, “Don’t tell anyone. It’s confidential. Criminals may overhear.” He only gives instructions. Real institutions do not ask you to keep your requests secret.
If you have made a deal with someone you trust, the scam fails. Her spell is broken when Joan’s son calls her. Patricia (from a story I covered separately) had no one to call, and she lost $40,000 in the tech support scam.
Here are some more resources worth bookmarking. The FTC takes reports of scams at reportfraud.ftc.gov. AARP’s Fraud Watch Network has a toll-free helpline (877-908-3360). And here are 10 common ways senior citizens are defrauded.
Scammers are showing no signs of stopping. They are becoming more sophisticated, more emotionally manipulative and more technologically advanced every year. Your defense doesn’t need to be sophisticated. It has to be kept consistent.
As I used to say on TV news about scams: There’s a special place in hell for people who prey on the vulnerable. Make sure they get there without your money.
By the way, Joan became something of a one-woman scam-prevention operation in her senior community. She tells her story in every meeting. Her son told me that, at last count, she had helped at least four neighbors catch scammers.
It is appropriate to tell people about this. pass it on.