True Crime Tucson – The Gift Card Scam

Sometimes we think that bad things only happen to those other people out there. Then we are staring right at a reality-tv episode. I would never have thought that my good friend, Maggie, would have been caught in a phone scam. She always seemed so on top of things, and she had been taking good care of herself. But here’s how it unfolded.

For his protection service, this con man told Maggie that he was paid in gift cards so it would be easy for her to pay him. All she had to do was go to Target twice a day and purchase $500.00 gift cards ($1000.00 a day). She complied. He then called her again the next day and had her read to him the Target card number and the security code off the back of each gift card. He explained that it was much safer for her to give him access to the cards this way, as she didn’t need to worry about the cards getting lost in the mail. Then, he instructed Maggie to shred the cards and the receipts to keep the information safe.

This happened every day for two weeks.

He called to tell Maggie what specific gift cards to buy each day, but always instructed her to buy them at Target. Getting concerned, she finally told him that it was getting too expensive, and that she couldn’t keep spending $1,000 a day for this. This con artist reminded Maggie that it cost money to keep her assets safe and surely, she wanted her assets to be protected.

Emboldened by her cooperation, he then told Maggie to go to her bank to pull out a large dollar amount from her savings account. For whatever reason, she was still trusting this person on the other end of the phone and went to the bank. Whatever Maggie relayed to the bank staff tipped them off to the likely fraud. Lucky for Maggie, the bank staff were on their game—they would not allow her to take the money and alerted her to the fact that it sounded as if she was certainly being scammed.

Maggie’s family estimated that she had distributed $20,000 or more to this charlatan. The money was gone, and unrecoverable! She tried to get her credit card company to cancel the charges she made to buy the gift cards, but the credit card company said Maggie willingly made the purchases. She also contacted the police but they said there really wasn’t anything that could be done in these cases to catch the thief.

So, what to do? Here are a few learnings to help keep you or your loved ones safe.

Know this: as we age, especially beyond 80, we are increasingly vulnerable to financial exploitation. The “oldest old” are more at risk than the “youngest old.” Changes in the brain contribute to this risk.

• Financial capacity declines with age. Some research has shown that older adults are significantly worse at financial decision-making. Unfortunately, financial confidence does not decline in sync. Older adults have confidence in their financial abilities even when those abilities are eroding. This lack of awareness puts older adults at risk.
• We may no longer recognize the signals that someone is untrustworthy or that a potential fraud is underway. Signals include aggressiveness or insistence of a telemarketer.
• Older adults may focus only on the potential reward or profit that is promised.
• Research shows many older adults have a “positivity bias”—the tendency to dedicate more attention to positive information in general.
• While age is the number one correlate with increased susceptibility to scams, other factors that correlate include: lower levels of cognitive function, lower psychological well-being, poorer financial and health literacy. These factors were independent of income and education. There was no difference between men and women. In the research, healthy and active seniors were as susceptible to scams.
• Most studies show no link between income and the prevalence of susceptibility. People with more assets simply have more to lose.
• Older adults with memory loss are more susceptible.

Manage the telephone.

• Avoid answering the telephone if you do not know who is calling.
• Hang up on telemarketers or callers you do not know.

Activate in your brain, the old adage: If something sounds too good to be true, it usually is.

Make important decisions in the morning. Older adults’ abilities to grasp details such as contract terms can start to wane in the afternoon.

Ask someone you trust, who is younger than you and at less risk, to weigh in on important decisions. This could be an adult child, a neighbor, financial advisor, bank, or someone else you highly trust.

If you are negotiating price or terms for something, write everything down.

Give yourself more time to process everything that you need to consider. Back away from transactions with individuals who are pressuring you. No one with integrity will rush your decision making!

By Cyndi Sprague, Vice-President, Director of Operations

For individuals at advanced ages, bill paying, budgeting, investing, and other financial decision making also can simply become overwhelming. These folks can benefit significantly from having assistance with their bill paying and general handling of their finances. Mission works with our clients on both fronts to help keep them safe. Whether serving as trustee or investment manager, Mission is an additional gatekeeper that can keep illegitimate withdrawals from occurring.