Don't Fall for the Grandparent Scam

Scammers are getting more creative every day, finding new and innovative ways to trick people into handing over their hard-earned money or personal information. That means you need to stay on your toes by keeping educated on the latest techniques for fraud. One of the scam community's current favorites? The grandparent scam.

The premise is simple: Potential victims are contacted by someone claiming to be a family member who needs money fast (sometimes a grandchild, hence the name of the scam, although it can also be a nephew or niece, a brother or sister, or even just a close friend). In fact, the situation is downright urgent: The person is in big trouble and gives a dramatic story about all the terrible things that will happen if they don't get cash right away.

Last year, Forbes Magazine reported that losses to grandparent scams were on a dramatic uptick—more than doubling from the year before. It also pointed out that the average amount scammers make off with is much higher than other types of scams: about $9,000 versus the typical $500. So what makes these scams so successful?

This scam takes advantage of people's love for their family and friends and, like many other scams, capitalizes on how people act in stressful situations, amid panic and confusion. Scammers don't want you to stop and consider the situation, or to ask questions, so they push hard on your emotional buttons. The urgency of a loved one in peril can motivate someone to act immediately, bypassing red flags they would otherwise have noticed.

Grandparent scams can come in many forms. Scammers have been known to employ phishing (email), vishing (phone calls), smishing (text messages) and social media platforms to contact their targets. They often have a few personal details about the relative they're impersonating, adding legitimacy to their story. These details, such as names of grandchildren, are often gleaned from social media pages, or through clever social engineering. (For example, crying “Grandpa, it's me!" into the phone, and waiting for the target to say something like “Kelsey, is that you?")

Whether it's a phone call, an email or a Facebook message, grandparent scam stories all have a similar ring to them. A family member or friend is hospitalized, perhaps after a car accident, just arrested and needing bail, or stuck in a foreign country and in an emergency. There are a million potential scenarios, but they all boil down to you needing to send money to get a loved one out of a jam.

To make the situation seem more legitimate, scammers will sometimes hand the phone over to another scammer who is masquerading as a doctor at the hospital, a police officer arresting them, or some other official to add legitimacy to the claim. The scammers always have a sense of urgency (“you must send money immediately!") in order to confuse the target into paying without thinking too hard about it. The scammers will also emphasize a sense of loyalty and intimacy with the target, telling them there's no one else they could turn to or trust, and asking them not to tell or ask other family members or friends because they don't want to get into trouble or be embarrassed.

This kind of plea can be more emotionally persuasive than you might expect. Remember: These scams are personally targeted and sophisticated. The scammers give a family member's name, potentially even specific terms of endearment or other obscure family details (gleaned from social media). The phone number they call from could even be deceptive and look familiar, because it's a number very close to the family member's actual phone number.

So what should you do?

Ask questions.

If someone contacts you with a story like this, don't let yourself get embarrassed or flustered. Take a moment. Ask targeted, specific questions—ones that can't be found easily or through internet research. Some organizations have suggested having a preplanned special family code word or code question that scammers would never know.

Verify the caller's claims.

Ask for a number to call back, then verify the story with other family members. Is Kawika really in Europe right now? Did Annie actually get into a car accident? Try calling back the number you already have in your phone for the family member and see if you can get in contact with them some other way.

Be safe with how you send your money.

Scammers will often ask for prepaid credit cards or gift cards, or have specific and convenient instructions for which Western Union to wire money to. Don't wire money or send cash directly—there's no way to get refunded later.

Be conscious of your online privacy settings.

Scammers gather details from social media, so keep your accounts private and only connect with friends and family you know personally. If you have elderly family members, educate them on the importance of cybersecurity and help them adjust their settings to be more private.