One of the scammer’s most effective tools is the telephone.
AARP’s new ‘Investment Fraud Vulnerability Study’ studied the mindset of individuals who have been successfully targeted by various phone scams. The study found that retirees are often the victims of such phone scams, because they are more likely to actually answer the phone than their younger counterparts. Once the connection is established, these phone scammers used tried-and true sales techniques to glean information and gain the trust of the potential victim.
Doug Shadel is the lead researcher of AARP’s Fraud Watch Network. Shadel says some of the most effective scams are corruptions of otherwise viable products and services.
For instance, a viatical is financial agreement involving sale of a life insurance policy. (The term comes from the Latin word ‘viaticum’). A third party buys your life insurance policy for a lump sum. That sum is generally greater than the policy’s cash surrender value, but less than it’s death benefit. This third party takes over the policy payments and when you die, they collect the full death benefit.
Viaticals are a legitimate financial instrument, but the legitimate ones are seldom sold over the phone.
This popular viatical scam is used as a means of gathering your personal information which is then used to perpetuate other scams with your private data.
As a general rule, never offer financial information to a person you do not know, who phones you with a ‘fantastic limited time offer’. Tell them you will need time to consider their proposition and then perform due diligence.
For more tips on avoiding phone scams, click here.