Fraud schemes targeting older adults and estates have become a growing concern in recent years. The elderly are often targeted because of their financial stability and the perception that they may not be as technologically or cognitively savvy. Estates represent significant wealth repositories and can be easy marks for sophisticated scams. CPAs can inform and educate their elderly clients and estate representatives about the most common types of fraud perpetrated against these groups and essential strategies to protect against them. The common scams/frauds include the following:

• Grandparent scam: This scam preys on the emotions of elderly individuals by exploiting their love and concern for their grandchildren. Scammers call, posing as a distressed grandchild, claiming to need urgent financial help due to an emergency, such as an arrest or accident. The urgency created by these fraudulent calls pressures the elderly victim into sending money without verifying the story.
• Imposter scams: These scams involve fraudsters posing as government officials from agencies like the IRS, Social Security Administration or Medicare. The perpetrators often claim that the victim owes money or is at risk of losing benefits, creating a sense of fear and urgency. This fear is used to manipulate victims into making immediate payments or providing sensitive personal information.
• Tech support scams: In these scams, fraudsters impersonate tech support representatives from reputable companies. They convince the victim that their computer is infected with a virus and offer to fix it. Once they gain remote access, they steal personal information or install malware.
• Romance scams: Scammers create fake profiles on social media or dating websites, building trust with elderly victims over time. Once an emotional bond is formed, they ask for money for fabricated emergencies, such as medical bills or travel expenses. These scams not only result in financial loss but also cause emotional distress.
• Sweepstakes and lottery scams: In these scams, elderly individuals are notified that they have won a prize but must pay a fee to claim it. Fraudsters create a sense of excitement and urgency, persuading victims to pay these fraudulent fees.

Social Engineering Frauds Targeting Estates

Estates are targeted by scammers for their wealth. The fraudsters explore the potential vulnerabilities of the executors or beneficiaries. Common scams in this category include the following:

• Executor impersonation: Scammers pose as executors or other estate representatives, contacting beneficiaries or creditors to obtain personal or financial details. They may claim they need this information to process payments or settle debts, exploiting the trust and lack of familiarity with estate procedures.
• Phishing attacks: Estate representatives or beneficiaries receive phishing emails that appear to come from legitimate sources. These emails or text messages contain malicious links or attachments that, when clicked, can lead to malware infections or theft of sensitive information. Phishing strategy often involves creating a sense of urgency or the promise of a tempting deal.
• Inheritance scams: Fraudsters contact potential beneficiaries, claiming to be the deceased’s relative or trusted representative. They ask for personal information or financial details to facilitate the transfer of an inheritance, often providing seemingly credible details about the deceased to build trust with the target.
• Estate planning fraud: Targeting elderly individuals or those with health concerns, scammers offer fraudulent assistance with estate planning. They may convince victims to sign documents that transfer assets or provide access to financial information.
• Fraudulent probate proceedings: Scammers manipulate or forge probate documents to gain control of an estate’s assets. They might appoint themselves as executors or beneficiaries and divert assets for personal gain.

Steps to Protect Against Fraud

CPAs can review their clients' financial activities for suspicious transactions, which would generally include monitoring for sudden large transfers, unexpected changes in spending patterns, or withdrawals that might indicate a scam. They can also recommend effective internal controls for estates, such as secure communication channels, multi-factor authentication and regular account reconciliations, as well as investigate discrepancies in estate documents. Clients should know the following: 

• Verify information independently. Never provide personal or financial information to someone you don’t know or trust. Always independently verify the identity of anyone contacting you about your finances or estate.
• Be wary of any unsolicited contacts. If you receive a suspicious call, text message, email or letter, verify the sender’s identity before responding. Use trusted and secure communication channels, and avoid clicking on links, scanning bar codes or downloading attachments from unknown sources.
• Secure your digital presence. As cybercrime evolves, securing digital communication is essential, especially regarding sensitive financial documents and confidential personal information. Strong passwords, multi-factor authentication and encrypted communication will help to prevent unauthorized access.
• Consult with professionals. Engaging CPAs, experienced estate attorneys and cybersecurity professionals can help protect against fraudulent scams. These skilled professionals will offer guidance on securing your assets, communications and proper legal procedures.
• Stay informed and educated. Staying informed about the latest scams and understanding how fraudsters operate is crucial. Education on recognizing social engineering tactics can significantly reduce the risk of falling victim to these schemes.

Safeguarding financial assets requires awareness, vigilance and proactive measures. By understanding the various scams and implementing protective strategies, elderly individuals and estate representatives can take steps to protect their assets and financial well-being.