Protect yourself from scams

Caring for your brain is one of the best things you can do to safeguard your bank account.

While you plan for retirement and plan to pay for healthcare, it’s smart to arm yourself against scams. In the United States, the most recent Federal Trade Commission stats show that people 60 and older lost more than $1.6 billion to fraud in 2022.

One reason older adults tend to be targeted is that they are more likely to have savings and may be less familiar with newer tech and financial products like cryptocurrency. When someone posing as a tech support specialist or a customer service rep calls them, they can have trouble discerning that the person is a fraud.

To learn how some of us are vulnerable to con artists, Duke Han, Ph.D, a clinical neuropsychologist at the University of Southern California, is scanning the brains of volunteers 50 and older. Han’s team has pinpointed potential degenerative brain changes that could lead to reduced financial decision-making capability.

Financial acumen and the brain

Making solid financial decisions (such as maintaining good credit and spending wisely) is easier when your brain is healthy. Unfortunately, as we age, some of us experience cognitive impairments like memory lapses (which can lead to forgetting bills) or slower processing and information retrieval. “A sharp decline in processing speed makes it harder to keep track of multiple things, particularly in a high-pressure situation,” says Han. For example, a scammer might press you for a credit card number to pay an “urgent bill” that doesn’t exist.

Financial lapses may also be a harbinger of mental decline. Han’s research found that people who are more willing to give money to a stranger may be at high risk of developing Alzheimer’s. Another study showed that some people missed credit card payments as much as six years before a diagnosis of dementia. 

Shoring up your savings

No one is scam-proof, but you can take steps to lower your odds of being tricked.

1.     Boost your financial literacy

There’s a correlation between financial literacy and better decision making about money later in life, Han says. Even if you’re confident budgeting or managing credit, see if local colleges, libraries, banks, credit unions and senior centres offer info on less familiar topics like retirement withdrawals.

2.     Set up legal directives

“I usually recommend as much advance planning as possible,” says Han. Meet with an attorney to protect your assets and clarify your health care wishes.

3.     Focus on brain health

With a sharp mind, you’ll be better able to respond to financial curveballs. To protect his brain, Han stays cognitively engaged with work and prioritises exercise, a healthy diet, and exercising.

4.     Report attempted scams

“People tend to feel a lot of shame about being scammed, but it happens more than people think,” says Han. “The more scams get talked about, the more it’s destigmatised.