What Is the Granny Scam - How to Avoid it

This is a post by David Bakke, a writer for the Money Crashers personal finance blog. Money Crashers is a financial resource site and home of the top personal finance blogs list.

As soon as you learn about the latest scam and how to avoid it, another one is waiting just around the corner. Criminals are always coming up with new ways to try to steal your money. Though it's tough to spot every financial scam (including common Craigslist scams), it's important to watch out for yourself and for your older relatives, and keep yourself educated as best you can. The latest con, known as "the granny scam," specifically targets the unsuspecting elderly.

What Is the "Granny Scam?"

The granny scam targets older people, mostly grandparents, in an attempt to defraud them of their money. Instigators usually telephone their marks, claiming to be a grandson or other relative. They may claim one of a variety of things:

• They were just arrested
• They were in a car accident
• They were involved in some other serious medical emergency

Many times, crooks will claim that they've gotten into trouble abroad and are afraid to call their parents, asking to keep the request a secret. Next, the criminals coerce their prey into wiring them money to help them out of their situation. By the time the grandparent follows up, they learn that not only are their grandchildren safe and sound but also that their money is gone. To add insult to injury, some successful con artists will even call back after the scam works and double dip for more money. Some scammers are even using social networking sites to acquire information. It's not too difficult to get names, photos, and personal information, including the names of family members. Just as in instances of identity theft, criminals will use this data to their benefit, making their fraudulent claims sound credible.

How to Avoid Becoming a Victim

You don't need to be a senior citizen to be in danger. The swindlers are clever and can trick even the most vigilant people out there. But even if you think you're safe, make sure that your older relatives are informed. When a desperate call comes in, follow these steps:

1. Remain calm. A seasoned criminal will act frantic, trying to lead the grandparents into joining the panic. Swept up at the moment and worried for their young relative's well-being, a deceived victim will send the money without considering whether the claim is legitimate. It is crucial to remain calm, ignore the pleas for secrecy, and contact another family member as soon as possible to ensure that the emergency is real.
2. Ask specific questions. Now that you're calm enough to take control of the conversation, verify the identity of the caller by asking questions that only your grandchild or relative would know the answer to. Use obscure facts from that person’s life, such as the name of a family pet or where they went to grade school.
3. Get a contact number. Lastly, tell the person on the line that you will call them back. Simply ask for a contact number. This innocuous request is likely to throw a con artist off the normal script, usually ending the fraud attempt.

Final Thoughts

Criminals will try just about anything to separate you from your money, and the "granny scam" is one of many ways that these people target the elderly. If someone causes panic and attempts to reach into your pockets in the name of a family emergency, check out their story in full. Be 100% certain that you are actually dealing with one of your relatives before sending funds to anyone. Do you have additional tips for avoiding the granny scam? What other scams exist that target the elderly?

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Scams