All Posts in "Personal Finance/Consumers"

Crypto ATMs must be regulated to protect consumers

COMMENTARY

By Christina Clem

Scam artists have a shiny, new tool to take your hard-earned money, and while the nature of the scam remains consistent – often preying on emotions or manufacturing a sense of urgency – the method of getting your money is evolving with technology.  Instead of purchasing gift cards or transferring money through wire services, the use of crypto ATMs is on the rise, and they are popping up at convenience stores, gas stations, and other high-traffic areas.

Recent data from the Federal Trade Commission (FTC) paints a troubling picture, indicating that scammers have successfully convinced individuals to deposit over $65 million into crypto ATMs in the first half of 2024 alone. Alarmingly, older adults have emerged as primary targets, with reports suggesting they are more than three times more likely than younger individuals to be targeted for such scams. 

Why are crypto ATMs the new kid on the block when it comes to fraud? For one, the kiosks quickly move cash into tough-to-trace cryptocurrency accounts owned by criminals. Also, they are largely unregulated. Unlike banks, which offer some protection, the decentralized nature of cryptocurrencies means that if you get scammed, it’s very hard to get your money back. This lack of consumer protection is a major concern. 

As we look toward the 2025 state legislative session, one of the top priorities for AARP is to advocate for the passage of legislation aimed at imposing essential safeguards around the operation of these ATMs to bolster consumer protection. While Washington does require licensing for crypto ATMs and some warnings about scams, our state doesn’t have an overseeing agency to regulate or enforce rules. 

The proposed legislation aims to introduce a number of consumer protections, like establishing a daily transaction limit to prevent large sums of money from being withdrawn or deposited in a single day and requiring mandatory scam warnings displayed on the machines to alert users to the risks involved. Transparency regarding fees associated with transactions would also be enhanced, allowing consumers to make informed decisions before proceeding with a transaction. 

Furthermore, the legislation advocates for the identification of a regulatory body that would be responsible for monitoring the operations of crypto ATMs. This agency would oversee the licensing process, conduct regular inspections to ensure compliance with state regulations, and enforce existing rules to deter fraudulent activities. By implementing these measures, we can make it harder for criminals to exploit the machines and help keep your hard-earned money safe. 

In addition to state oversight, you can help protect yourself by remaining vigilant. A request to pay money via a crypto ATM is a red flag that you may have stumbled into a scam. Legitimate businesses and government agencies don’t take payment through crypto ATMs. 

If you spot or have experienced a scam, report it to the FTC at reportfraud.ftc.gov and the FBI’s Internet Crime Complaint Center at IC3.gov. The more information they have, the better they can identify patterns, link cases, and ultimately catch the criminals.    

You can also contact the AARP Fraud Watch Network Helpline at 877-908-3360, a free resource, to speak with trained fraud specialists who provide support and guidance on what to do next and how to avoid scams.

Christina Clem is an associate state director of communications for AARP.

The Senior Scene by — January 29, 2025 in Personal Finance/Consumers

SAVVY SENIOR

By Jim Miller

Dear Savvy Senior,

Is there a rule of thumb on how long someone should keep their old financial paperwork? I have file cabinets full of old receipts, bank and brokerage statements, tax returns and more that I would like to toss.

Recently Retired

Dear Recently,

It’s a great question. It’s difficult to know how long to keep old financial records and paperwork, and when it’s safe to get rid of them. Some things you’ll need to hold on to for your whole life, and others for just a month or so. Here’s a checklist that can help you determine what to save and what to throw away.

Keep one month:

  • ATM receipts and bank-deposit slips, as soon as you match them up with your monthly statement.
  • Credit card receipts after you get your statement, unless you might return the item or need proof of purchase for a warranty.
  • Credit card statements that don’t have a tax-related expense on them.
  • Utility bills when the following month’s bill arrives showing that your prior payment was received. If you deduct a home office on your taxes keep them for seven years.

To avoid identity theft, be sure you shred anything you throw away that contains personal or financial information.

Keep one year:

  • Paycheck stubs until you get your W-2 in January to check its accuracy.
  • Bank statements (savings and checking) to confirm your 1099s.
  • Brokerage, 401(k), IRA, and other investment statements until you get your annual summary (keep longer for tax purposes if they show a gain or loss).
  • Receipts for healthcare bills in case you qualify for a medical deduction.

Keep seven years:

Supporting documents for your taxes, including W-2s, 1099s, and receipts or canceled checks that substantiate deductions. The IRS usually has up to three years after you file to audit you, but may look back six years if it suspects you substantially underreported income or committed fraud.

Keep indefinitely:

  • Tax returns with proof of filing and payment. Keep for at least seven years, but many people keep them forever because they provide a record of your financial history.
  • IRS forms that you filed when making non-deductible contributions to a traditional IRA or a Roth conversion.
  • Retirement and brokerage account annual statements as long as you hold those investments.
  • Defined-benefit pension plan documents.
  • Savings bonds until redeemed.
  • Loan documents until the loan is paid off.
  • Vehicle titles and registration information as long as you own the car, boat, truck, or other vehicle.
  • Insurance policies as long as you have them.
  • Warranties or receipts for big-ticket purchases for as long as you own the item, to support warranty and insurance claims.

Keep forever:

Personal and family records like birth certificates, marriage license, divorce papers, Social Security cards, military discharge papers, and estate-planning documents, including power of attorney, will, trust and advanced directive. Keep these in a fireproof safe or safe-deposit box.

To reduce your paper clutter, consider digitizing documents by scanning them and converting them into PDF files so you can store them on your computer and back them up on a cloud like Microsoft OneDrive, Apple iCloud or iDrive. You can also reduce your future paper load by switching to electronic statements and records whenever possible.

Jim Miller is a contributor to the NBC “Today” show. Send questions for him to Savvy Senior, P.O. Box 5443, Norman, OK 73070, or at savvysenior.org.

The Senior Scene by — January 15, 2025 in Personal Finance/Consumers
AI impersonates voices in slick scams

(Pictured: Scammers imitate voices in phone calls by manipulating voice clips.)

Amid technology advances enabling scammers to commit fraud, elders and their loved ones need to stay informed.

Typically, elder scams involve the transfer of money to a stranger or imposter for a promised benefit or good. In 2023, banks reported more than $27 billion in suspicious activity related to elder scams, according to the Financial Crimes Enforcement Network, and reports filed by the public to the Federal Bureau of Investigation indicated an average loss of more than $33,000 per case. And these numbers may be conservative, as cases may be underreported.

One technology behind these staggering figures is artificial intelligence (AI). Advanced methods of masking one’s identity using AI make it difficult to detect fakes. Voice print – or voice clone – scamming is becoming more of an issue when it comes to impersonation fraud. Using voice clips from social media or by calling and having a brief conversation with someone, criminals can generate an imitation to be used as part of their ruse.

“Older adults are often easier prey for these types of fakes, because a recognized voice when applied to certain scam strategies is often enough to elicit action,” said Mark Kwapiszeski, head of enterprise fraud at PNC Bank.

Most scams generally follow one or two main strategies: Elicit strong feelings and apply a sense of urgency to get someone to act quickly before thinking, and/or entice someone with an offer that seems too good to be true, yet too alluring to pass up. Here are some of the more common types of elder scams:

• Tech support. A caller claims they need to remotely access the victim’s computer to fix a software problem, then use that access to steal personal or financial information.

• Government imposter. The fraudster may say a victim owes a debt that must be paid immediately or face arrest, asset seizure, or termination of benefits.

• Grandparent. An elaborate story is given by phone, claiming a loved one is in trouble and needs money to be protected.

• Investment. The scammer makes claims of a high-return investment to trick the victim into giving them money, often asking to be paid in an unconventional way, like cryptocurrency, where there’s little to no chance of recovering the funds.

• Romance. The scammer develops a fake identity and creates the illusion of a romantic relationship to manipulate or steal from the victim.

• Lottery/sweepstakes. Scammers by phone or mail tell the victim they’ve won the lottery or a sweepstakes but must remit a processing fee before they can get their prize.

The most effective way of preventing fraud is to pause when being rushed and verify the legitimacy of both the person making contact and their claims. To reduce the odds of your voice being cloned, experts suggest exercising caution when speaking on the phone with strangers. If someone unfamiliar contacts you, hang up the phone, get a number for the purported company, government agency or family member from a trusted source (such as a company’s official website) and use that to call back and verify.

Be leery of anyone asking for nontraditional payment forms, and when logic may be clouded by romantic feelings, confide in someone you trust for an objective opinion.

If you believe you or someone else is a victim of fraud, contact the U.S. Department of Justice Office for Victims of Crime’s National Elder Fraud Hotline website or call 1-833-FRAUD11.

Source: StatePoint Media

The Senior Scene by — December 18, 2024 in Personal Finance/Consumers

Homeowners 62 and older saw their housing wealth increase by $600 billion nationally to $14 trillion, according to the latest quarterly release of the NRMLA/RiskSpan Reverse Mortgage Market Index.

Growth in senior homeowner’s wealth was largely attributable to an estimated 3.97 percent (or $624.6 billion) increase in senior home values, which was offset by a 0.89 percent (or $20.9 billion) increase in senior-held mortgage debt. Increasing house prices drove the index’s upward trend, mitigated to some extent by a corresponding modest increase in mortgage debt held by seniors.

According to the National Council on Aging, the median home equity for a senior homeowner age 65-plus is $250,000. This is 47 percent higher than equity levels pre-pandemic. Over 1.3 million older homeowners have taken advantage of reverse mortgages to tap into their home equity since 1990, reported the NRMLA (National Reverse Mortgage Lenders Association).

A reverse mortgage is a type of home loan that allows seniors to convert equity to cash to meet various financial needs. Homeowners must meet several basic eligibility requirements to apply, including being 62 or older and either own the home or paid off much of the original loan.

Housing costs represent roughly 25 percent of expenses for all Americans 65 and older.

Sources: National Council on Aging, an advocacy organization for older adults; National Reverse Mortgage Lenders Association, which represents lenders and housing counseling agencies; and Urban Institute, a researcher of housing-related issues.

The Senior Scene by — December 3, 2024 in Personal Finance/Consumers