Scams Aimed at the Elderly
The elderly are scammed out of some $2.6 billion a year. Scary, isn't it?
Financial scams targeting seniors have become so prevalent that they are now considered "the crime of the 21st century." Why? Because seniors are thought to have a significant amount of money sitting in their accounts.
Financial scams often go unreported or can be difficult to prosecute, so they're considered a low-risk crime. However, they are devastating to many older adults and can leave them in a very vulnerable position with little time to recoup their losses.
And, it's not just wealthy seniors who are targeted...low-income older adults are also at risk of financial abuse.
It is not always strangers who perpetrate these crimes. Over 90% of all reported elder abuse is committed by an older person's own family members, most often their adult children, followed by grandchildren, nieces and nephews, and others.
Listed is just a sample of scams.
The Social Security Rip-Off
This scam involves ID thieves stealing personal info and contacting the SSA to change the payment routing info to the thieves’ own bank accounts or prepaid debit cards. Be wary of any calls or emails requesting personal information. One ruse the con artist may use: The say they need a bank account number so then can deposit a lump sum of money in the account. Notify the Social Security Administration to block all account changes not made by the seniors themselves. If you suspect fraud, contact the SSA’s Inspector General.
The Classic Con
Meeting seniors anywhere – at religious institutions, community centers, retirement homes, the beach, supermarket, etc. – old-fashioned con artists envision red bullseyes shimmering on the faces of their prey. The first thing they do is to become your newest best friend. They ask questions to see where your Achilles heel is: Oh, you are a widow. Oh, you love your grandchildren. Oh, your relatives all live out of state. And you are so lonely that you think: Yeah, I’ll talk to this person about my IRA, listen when he needs a loan, or when he is with Goldman Sachs and has a good deal for me that will help fund my grandchildren’s education and retire more comfortably. And, of course, he would not scam me, because he is a member of my church. Keep vigilant and if you need to use your rudeness, do so.
Pulling into a parking space, a senior exits the car and enters a store. The scammer, who has been waiting and watching specifically for elderly drivers, swiftly approaches the car after the owner is out of sight and disables it. He then waits out of sight for the senior to return. When the car doesn’t start, the scammer poses as a helpful passerby, fixes it, then demands a large cash reward. They literally get into the car and go to bank with the elderly person. Beware and have some type of back-up, such as a road-side assistance plan.
In the House
Granted unlimited access to senior’s bodies and homes, ‘caregivers top the list’ of those who exploit the elderly. Although caregiver agencies are required by law to do background checks on all potential employees, many don’t bother. But often this kind of perp often has no criminal record, but simply cannot resist the temptation to snatch unattended cash, clothes, credit cards, meds, checkbooks, jewelry, electronics, and person information. Once caught, these people rationalize their crimes by saying that the old lady wanted me to have this because she loves me. Forgetful seniors face yet another scam when employees who have been paid claim that they haven’t. Forgetting that they wrote the previous checks, the seniors write more.
The Credit Card Company Fraud Call
The caller often hits later at night and says he's from the senior's credit card company. He even ID's the last four digits of the card as proof. He's checking on a possible fraudulent purchase. When the senior denies making the purchase, the caller offers to reverse it immediately. He just needs the three or four digit verification code on the back of the credit card. At this point, expect foul play. Thieves have probably copied the front of the card, but still need the verification code. Even though this is a scam, it is a good idea to cancel and replace the card, just to be on the safe side.
Remember, ‘there is no such thing as a free lunch’. This mail scam comes in two flavors: The "pay to play" scheme or the "You've won! Here's your check" scam. The first ploy entices seniors to buy inexpensive trinkets or magazine subscriptions (which they really do receive) in order to have their name entered in the contest. In the second case, the elderly person receives an authentic-looking check, with notification they have already won the foreign country lottery. Shred both offers. It's illegal for companies to require you to buy anything to enter a sweepstakes, and it's also illegal for Americans to enter a foreign country's lottery. These scams require the 'winner' to wire back a share of their 'winnings' (which will initially clear the bank but later prove to be counterfeit) for taxes or administrative fees.
The Discount Prescription Plan
Callers offer seniors presciption drugs at 50 percent off. The catch: Hucksters require a $200 'membership fee' to join a discount club, along with seniors' credit card numbers. Or the drugs never arrive as promised, or the 'medicine' is actually a generic herbal replacement. What the senior should do is to be dubious. Check with your state's program for low-income health insurance (often called a state health insurance program or SHIP). These agencies maintain a list of reputable discount programs.
The Grandparents Scheme
The grandparent scam is so simple and so devious because it uses one of older adults’ most reliable assets, their hearts. Scammers will place a call to an older person and when the mark picks up, they will say something like, “Hi Grandma, do you know who this is?” When the grandparent guesses the name of a grandchild the scammer most sounds like, the scammer has established a fake identity without having done a lick of background research. Once ‘in’, the fake grandchild will usually ask for money to solve some unexpected financial problem (overdue rent, payment for car repairs, etc.), to be paid via Western Union or MoneyGram, which doesn’t require ID to collect. At the same time, the scam artist will beg the grandparent “please don’t tell my parents, they would kill me.” While the sums from such scam are likely to be in the hundreds, the very fact that no research is needed makes this a scam that can be perpetrated over and over at very little cost to the scammer.
Perhaps the most common scheme is when scammers use fake telemarketing calls to prey on older people, who as a group make twice as many purchases over the phone than the national average. While the image of the lonely senior citizen with nobody to talk to may have something to do with this, it is far more likely that older people are more familiar with shopping over the phone, and therefore might not be fully aware of the risk. With no face-to-face interaction, and no paper trail, these scams are incredibly hard to trace. Also, once a successful deal has been made, the buyer’s name is then shared with similar schemers looking for easy targets, sometimes defrauding the same person repeatedly.
Examples of telemarketing fraud include:
“The Pigeon Drop”
The con artist tells the individual that he has found a large sum of money and is willing to split it if the person will make a ‘good faith’ payment by withdrawing funds from his bank account. Often, a second con artist is involved, posing as a lawyer, banker or some other trustworthy stranger.
“The Fake Accident Ploy”
The con artist gets the victim to wire or send money on the pretext that a family member is in the hospital and needs the money.
Money is solicited for fake charities. This often occurs after natural disasters.
While using the internet is a great skill at any age, the slower speed of adaption among some older people makes them easier targets for automated internet scams that are everywhere on the web and email programs. Pop-up browser windows simulating virus-scanning software will fool victims into either downloading a fake anti-virus program (at a substantial cost) or an actual virus that will open up whatever information is on the user’s computer to scammers. Their unfamiliarity with the less visible aspects of browsing the web (firewalls and built-in virus protection, for example) make seniors especially susceptible to such traps.
One example includes:
A senior receives email messages that appear to be from a legitimate company or institution, asking them to ‘update’ or ‘verify’ their person information. A senior receives emails that appear to be from the IRS about a tax refund.
Because many seniors find themselves planning for retirement and managing their savings once they finish working, a number of investment schemes have been targeted at seniors looking to safeguard their cash for their later years. From pyramid schemes like Bernie Madoff’s (which counted a number of senior citizens among its victims) to fables of a Nigerian prince looking for a partner to claim inheritance money to complex financial products that many economists don’t even understand, investment schemes have long been a successful way to take advantage of older people.
Homeowner/Reverse Mortgage Scams
Scammers like to take advantage of the fact that many people above a certain age own their homes, a valuable asset that increases the potential dollar value of a certain scam. A particularly elaborate property tax scam in San Diego saw fraudsters sending personalized letters to different properties apparently on behalf of the County Assessor’s Office. The letter, made to look official but displaying only public information, would identify the property’s assessed value and offer the homeowner, for a fee of course, to arrange for a reassessment of the property’s value and therefore the tax burden associated with it. Closely related, the reverse mortgage scam has mushroomed in recent years. With legitimate reverse mortgages increasing in frequency more than 1,300%, scammers are taking advantage of this new popularity. As opposed to official refinancing schemes, however, unsecured reverse mortgages can lead property owners to lose their homes when the perpetrators offer money or a free house somewhere else in exchange for the title to the property. Seniors are frequently targeted through local churches and investment seminars, as well as television, radio, billboard and mailer ads. A legitimate HRCM loan product is insured by the Federal Housing Authority. It enables eligible homeowners to access the equity in their homes by providing funds without incurring a monthly payment. Eligible borrowers must be 62 years or older who occupy their property as their primary residence and who own their property or have a small mortgage balance.
Tips for Avoiding Reverse Scams:
Do not respond to unsolicited ads.
Be suspicious of anyone claiming that you can own a home with no down payment
Do not sign anything that you do not fully understand
Do no accept payment from individuals for a home you did not purchase
Seek out your own reverse mortgage counselor
Funeral & Cemetery Scams
The FBI warns about two types of funeral and cemetery fraud perpetrated on seniors. In one approach, scammers read obituaries and call or attend the funeral service of a complete stranger to take advantage of the grieving spouse. Claiming the deceased had an outstanding debt with them, scammers will try to extort money from relatives to settle the fake debts. Another tactic of disreputable funeral homes is to capitalize on family members’ unfamiliarity with the considerable cost of funeral services to add unnecessary charges to the bill. In one common scam of this type, funeral directors will insist that a casket, usually one of the most expensive parts of funeral services, is necessary even when performing a direct cremation, which can be accomplished with a cardboard casket rather than an expensive display or burial casket.
Fraudulent Anti-Aging Products
In a society bombarded with images of the young and beautiful, it’s not surprising that some older people feel the need to conceal their age in order to participate more fully in social circles and the workplace. After all, 60 is the new 40, right? It is in this spirit that many older Americans seek out new treatments and medications to maintain a youthful appearance, putting them at risk of scammers. Whether it’s fake Botox like the one in Arizona that netted its distributors (who were convicted and jailed in 2006) $1.5 million in barely a year, or completely bogus homeopathic remedies that do absolutely nothing, there is money in the anti-aging business. Botox scams are particularly unsettling, as renegade labs creating versions of the real thing may still working with the root ingredient, botulism neurotoxin, which is on of the most toxic substances known to science. A bad batch can have health consequences far beyond wrinkles or drooping neck muscles.
Counterfeit Prescription Drugs
Most commonly, counterfeit drug scams operate on the internet, where seniors increasingly go to find better prices on specialized medications. The scam is growing in popularity. The FDA has investigated an average of 20 such cases per year. The danger is that besides paying money for something that will not help a person’s medical condition, victims may purchase unsafe substances that can inflict even more harm. This scam can be as hard on the body as it is on the wallet.