Financial scams targeting seniors have become so prevalent that they’re now considered “the crime of the 21st century,” according to the National Council on Aging.
On Oct. 26, from 2-4 p.m. Roberta Bottoms, a US Postal Inspector will present a free program on Protecting Seniors from Financial Predators at The Women’s Club of Central Kentucky, 210-214 N. Broadway.
When seniors fall victim to financial crimes they lose much more than money. Roberta Bottoms will discuss the emotional and financial harm caused by financial predators and tells us the warning signs of financial fraud and what you can do to help protect yourself and those you care about.
The program is presented by ITNBLuegrass and sponsored by the Retirement Research Foundation.
Here’s a list of the top 10 areas where scamming occurs. The National Council on Aging suggests you review the list so you can identify a potential scam.
- Health Care/Medicare/Health Insurance Fraud
In these types of scams, perpetrators may pose as a Medicare representative to get older people to give them their personal information, or they will provide bogus services for elderly people at makeshift mobile clinics, then use the personal information they provide to bill Medicare and pocket the money.
- Counterfeit Prescription Drugs
Most commonly, counterfeit drug scams operate on the Internet, where seniors increasingly go to find better prices on specialized medications. 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 is growing in popularity—since 2000, the FDA has investigated an average of 20 such cases per year, up from five a year in the 1990s.
- Funeral and 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 widow or widower.
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.
- Fraudulent Anti-Aging Products
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.
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.
Examples of telemarketing fraud include: “The Pigeon Drop.” The con artist tells the individual that he/she 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/her 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 the person’s child or another relative is in the hospital and needs the money.
“Charity Scams.” Money is solicited for fake charities. This often occurs after natural disasters.
- Internet Fraud
While using the Internet is a great skill at any age, the slower speed of adoption among some older people makes them easier targets for automated Internet scams that are ubiquitous 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) makes seniors especially susceptible to such traps.
- Investment Schemes
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.
Closely related, the reverse mortgage scam has mushroomed in recent years. With legitimate reverse mortgages increasing in frequency more than 1,300 percent between 1999 and 2008, scammers are taking advantage of this new popularity.
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.
- Sweepstakes and Lottery Scams
This simple scam is one that many are familiar with, and it capitalizes on the notion that “there’s no such thing as a free lunch.”
Here, scammers inform their mark that they have won a lottery or sweepstakes of some kind and need to make some sort of payment to unlock the supposed prize. Often, seniors will be sent a check.
- The Grandparent Scam
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 will say something along the lines of: “Hi Grandma, do you know who this is?” When the unsuspecting grandparent guesses the name of the 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 don’t always require identification to collect.