Summary of the Article:
- Know the terms, avoid the traps. Understanding fraud vocabulary is one of the most effective defenses against scammers who rely on confusion and urgency.
- Elders are the most vulnerable, and it’s not just strangers committing elder fraud.
- Protect your credit proactively. Fraud alerts and security freezes are two tools you can place on your credit report to help prevent.
Urgency is a red flag. Slow down and independently verifying is almost always the right move. - Fiduciaries can commit fraud too. People legally trusted to manage someone else’s money are required by law to act in that person’s interest, and misusing that access may constitute fraud.
Fraud works because it exploits trust, urgency, and confusion. Here’s a breakdown, in plain-English, of key fraud-related terms from the Consumer Financial Protection Bureau (CFPB).
Elder Financial Exploitation is the illegal use of an older adult’s money or assets, and it’s the most common form of elder abuse. Sadly, perpetrators aren’t always strangers – family members and friends are frequently responsible. Tips to help spot Elder Fraud: Watch for sudden changes in financial behavior or unexplained withdrawals.
Foreclosure Relief Scams target homeowners in distress, promising to save their home from foreclosure in exchange for upfront fees. The promise is always fake. If you’re struggling with mortgage payments, contact a credit union team member, your trusted financial institution, or a HUD-approved housing counselor. These resources are generally FREE.
Fraud by Fiduciaries occurs when someone legally trusted to manage another person’s money, like a power-of-attorney agent or court-appointed guardian, uses that access for personal gain instead. The law requires fiduciaries to act solely in the other person’s interest.
Identity Theft happens when someone uses your personal information without permission. IdentityTheft.gov, run by the FTC, offers prevention tips and recovery steps.
Impostor Scams involve criminals posing as trusted figures, like government officials, law enforcement, charities, or even family members. Caller ID can be faked, so if something feels off, hang up and call the organization directly using a number you look up yourself.
Phishing uses fraudulent emails, texts, or fake websites to trick you into revealing passwords or financial information. These messages can look authentic. Never click links in unexpected emails. Go directly to the company’s website instead.
Security Freezes are stronger than fraud alerts. They block new creditors from accessing your credit file entirely, preventing identity thieves from opening accounts in your name. Note: a freeze won’t protect existing accounts, only new ones.
Spoofing lets scammers disguise the name and number appearing on your caller ID, making it look like a call is coming from your bank, a government agency, or a local number. Never share personal or financial information based on caller ID alone.
Wire and Money Transfer Fraud is especially dangerous because transfers are hard to reverse. The classic “grandparent scam” involves someone posing as a grandchild in crisis, begging for an emergency wire. Urgency is the weapon. If you feel a sense of urgency, or you feel pressured to act quickly, always slow down and verify before sending money.
Fraud Alerts let you place a notice on your credit report requiring lenders to verify your identity before opening new accounts. Placing one alert at any of the three major bureaus notifies all three. Active-duty military members can also place an active duty alert for protection while serving.
Resources:
https://www.consumerfinance.gov/complaint/
Submit a complaint: (855) 411-2372
Source:
Consumer Financial Protection Bureau:
Fraud and Scams Key Terms
By: Elisa Rode
Kearley CEO and chief strategist
