How to protect yourself against financial exploitation
Financial exploitation takes many forms and can be committed by individuals you trust or strangers. As technology advances, scammers are constantly improving their methods and using more sophisticated means to deceive. But you can protect yourself by identifying the warning signs of exploitation and reporting suspicious activities to the proper authorities.
Who's at risk?
While everyone is at risk, those experiencing cognitive decline and older Americans with accumulated wealth are the most vulnerable. All investors of any age are at risk—scammers don't shy away from opportunities to steal even small amounts of money.
What are the warning signs?
- Requesting a wire transfer to an unknown party.
- Asking for gift cards or cash.
- Requesting remote access to your device.
- Requiring a fee or taxes to release an inheritance, prize, or winnings.
- Offering a deal for one day only or pressuring you to act quickly.
What are the most common scams?
- Romance scam. Scammers build an emotional connection over the phone or internet, often promising a future together but being unable to meet in person. The relationship moves quickly before they ask for money.
- Tech support. A pop-up message appears on your computer or phone saying your device has been compromised. You're directed to call a phone number for assistance, and the scammer asks to access your device remotely and pay a fraudulent fee to repair the problem.
- Family impersonation. Con artists call pretending to be a family member, such as a grandchild, and then ask you to send money in secrecy for an immediate financial need.
- Government impersonation. Scammers pretend they're agents of the Internal Revenue Service, Social Security Administration, Medicare, or even the Drug Enforcement Agency. They might tell you about unpaid taxes or debts you must pay or face penalties, criminal charges, or jail time.
- Sweepstakes, charity, or lottery. Fraudsters might email you to say you've won a prize, but you must pay a fee to collect the winnings.
- Investment. Promises of big payouts or guaranteed returns with little or no risk.
How can I protect myself?
- Set up a trusted contact on your investment accounts. You can choose a family member, a professional advisor, or a close friend. We'll reach out to your designated contact if we suspect you may be a victim of financial exploitation or may be experiencing a health issue affecting your ability to manage your accounts.
- Screen phone calls and insist on verifying all callers you don't know who ask for personal or financial information.
- Don't sign any document you don't understand.
- Be wary of anyone you meet online or by phone who requests money before meeting in person.
- Keep personal and financial documents secured.
- Consider consulting an attorney to discuss estate planning topics such as power-of-attorney and successor trustee appointments.
- If managing your finances becomes too difficult, or if you need help, consider designating someone you trust as an agent to your account or working with a financial advisor.
- Visit Vanguard's Security Center for online security tips.
How can I protect my loved ones?
- Be on the lookout for signs of mental decline, including:
- Feeling overwhelmed when making decisions or plans.
- Difficulty understanding instructions.
- Losing sense of direction.
- Acting impulsively.
- Encourage your loved ones to reduce their risk by:
- Setting up automatic electronic payments for bills.
- Asking them to consider canceling unused credit cards.
- Opting out of solicitations.
- Monitoring credit reports for unusual activity.
- Keeping contact information up to date with all financial institutions.
- Setting up automatic electronic payments for bills.
- Understand what estate planning documents may already be in place and consider seeking assistance from an attorney who specializes in elder law.
- Report suspected elder abuse to your local elder care investigation agency, such as Adult Protective Services or the Office of Family Health and Aging.
How Vanguard can help
As a Vanguard client, you can add a trusted contact to your account. We'll reach out to your designated contact if we suspect you may be a victim of financial exploitation or may be experiencing a health issue that’s impacting your ability to manage your accounts. Adding a trusted contact enables Vanguard to protect your account and secure assistance when necessary. To add a trusted contact, log in to your account. Under My Accounts, select Profile and account settings, then select Trusted contact.
If you or a loved one are concerned about managing your finances, professional account management may help put your worries at ease. Vanguard Personal Advisor Services® can help.
Our representatives are trained to look for unusual activity on client accounts and have helped prevent fraud from occurring. One example was a client who called to withdraw $10,000 from his account because his grandson had reached out to say he was in trouble. The phone representative encouraged the client to call his grandson directly to confirm if he needed the money. After he spoke with his grandson, the client learned he wasn't in trouble and avoided becoming a victim of a grandparent scam.
For more information about Personal Advisor Services or adding a trusted contact to your account, contact 877-662-7447.
What should I do if I believe I or a family member has been financially exploited?
- Don't be afraid to talk about it with someone you trust. You're not alone, you've done nothing wrong, and there are people who can help. Look to your family and friends for support.
- Call your financial institutions and update all security measures on your accounts.
- Open all your mail, even if you think it's junk, to ensure someone isn't trying to establish credit in your name.
- File a police report and contact credit bureaus if your personal information has been compromised. Report all scams to FTC.gov and suspected internet crimes to IC3.gov.
The more you share your experiences with others, the more we all benefit and learn how to stop these deceptive practices. Remember: If it sounds too good to be true, it probably is.
You’re not alone, you’ve done nothing wrong, and there are people who can help.
To designate a trusted contact:
- Log in to your Vanguard account.
- From the menu, choose My Accounts and select Profile & account settings.
- Under Personal info, select Trusted contact and follow the instructions.
All investing is subject to risk, including the possible loss of the money you invest.
Vanguard’s advice services are provided by Vanguard Advisers, Inc. (“VAI”), a registered investment advisor, or by Vanguard National Trust Company (“VNTC”), a federally chartered, limited-purpose trust company.
The services provided to clients will vary based upon the service selected, including management, fees, eligibility, and access to an advisor. Find VAI’s Form CRS and each program’s advisory brochure here for an overview.
VAI and VNTC are subsidiaries of The Vanguard Group, Inc., and affiliates of Vanguard Marketing Corporation. Neither VAI, VNTC, nor its affiliates guarantee profits or protection from losses.
We recommend that you consult a tax or financial advisor about your individual situation.
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