Today, people over 50 are the biggest financial scam targets. And not only the wealthy ones. Low-income seniors are also at risk. Here's why.
Financial Scams Targeting Seniors
First, many older people have retirement money sitting in a bank account. Second, they are more likely than younger people to expect honesty in the marketplace. Third, they are less apt to take action when defrauded.
Who are the scammers?
Although scammers are often phony merchandisers who take advantage of older people's needs, desires, and vulnerabilities, they can also be friends, doctors, lawyers, accountants or even family members.
Some scams are simple and others are quite sophisticated. There are scammers with paperwork that appears to give them legal authority to act—including powers of attorney, authorizing signature cards, and vehicle pink slips. They may work at a bank or other financial institution and may have intricate ways of hiding their tracks by manipulating electronic records.
10 Common scams aimed at older people
1. Health Care/Medicare/health insurance fraud
Posing as Medicare representatives, the scammers get people over 65 to release personal information that can be used for identity theft. Or they offer phony services at make-shift mobile clinics, then use the personal information they've received to bill Medicare and pocket the money.
2. Counterfeit prescription drugs
As more mature women use the internet to find better prices on medications, they become vulnerable to the growing number of counterfeit drug scams that operate on the internet.
3. Fraudulent anti-aging products
Every woman wants to look younger and many are willing to take a chance on a product that promises youth in a jar or a treatment. It can be 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. See more at: noca.org
4. Telemarketing or mail fraud
The U.S. Department of Justice estimates that dishonest telemarketers steal about $40 billion every year from one in six consumers. The American Association of Retired Persons (AARP) claims that about 80% of these victims are 50 or older. This includes investment and credit card fraud, lottery scams, and identity theft. It also includes using the phone to sell goods that never arrive or are worthless junk.
This is an internet scam in which a person gets messages that seem to be from a legitimate company or government agency asking for an "update" or "verification" of personal information.
6. Investment scams
Older people are bombarded with investment scams, from pyramid schemes like Bernie Madoff's to stories of Nigerian princes looking for partners to claim inheritance money. An important safety tip to remember is that anything that seems to good to be true, is.
7. Charging excessive amounts of money
After convincing the victim that he or she needs special goods or services, the scammer then seriously overcharges them—often hiding the high cost in interest or installment payments.
8. Sweetheart scam
An alleged suitor convinces the victim that love and concern for her well being are his motives for being included on bank accounts or property deeds. He then disappears along with the property.
9. Offering false prizes
The victim is told she has won a huge cash prize, but needs to send in some money for "fees and taxes." (A recent "You have won the lottery" scam operating out of Canada bilked thousands of older people to the tune of $1 billion a year, according to estimates by the U.S. Attorney General and the Solicitor General of Canada.)
10. Doing unsolicited home repair work
Plan A: Operating in neighborhoods with high concentrations of older people, two scammers appear on victims' doorsteps claiming to spot something in need of fixing—a hole in the roof, clogged gutters and leaders, etc. They demand payment up front, and then find the job is more complicated and needs a more costly solution. These people are unlicensed, and the work they do is shoddy at best.
Plan B: One scammer distracts the victim while the other one sneaks into the house and steals money and valuables.
If your identity has been stolen
- File a police report. Keep a copy of the report to send to creditors or others that may require proof of the crime.
- Contact your bank. Ask them to monitor your account for unusual activity. Consider closing the account and opening a new one.
- Contact the fraud departments of one of the three major credit bureaus to place a fraud alert on your credit file: Equifax: 800-525-6285; Experian: 888-397-3742; Transunion: 800-680-7289.
- Contact your credit card issuers to close your old accounts and get replacement accounts.
- File your complaint with the FTC identity theft hotline: 877-438-4338.
- Complete the FTC identity theft affidavit which you can use in disputing new unauthorized accounts.
Protect yourself against fraud and scams
At usa.gov you will find a laundry list of frauds and scams and advice on how to protect yourself from falling prey to them. Topics covered include: banking and ATM frauds, credit card scams, insurance fraud, internet fraud, investment fraud, and phone scams. You will also receive guidance on what to do if you believe that you were sold fraudulent or unsafe goods, and warning signs to look for to avoid fraud when considering a purchase.