Elderly Financial Fraud
Financial Scams Against Seniors
Financial fraud is the fastest growing form of elder abuse. Protect yourself or your loved ones from financial elder abuse by becoming familiar with the most common scams and learning what to do if you suspect foul play.
According to the National Council on Aging (NCOA), the top 10 scams targeting seniors include the following:
10 Most Common Scams Targeting Seniors
1. Medicare/health insurance scams
In scams involving Medicare, fraudsters pose as a Medicare representatives to get seniors to give them their personal information. The fraudster will then use this information to bill Medicare for fraudulent services and then pockets the money.
2. Counterfeit prescription drugs
As prices for prescription drugs increase, seniors look to the internet to find cheaper prices for their medications. Unfortunately, fraudsters are aware of this and set up websites that advertise cheap prescription drugs which are usually counterfeit. Seniors who unknowingly purchase these counterfeit drugs soon realize they have been duped when the drugs do not provide any relief for their medical condition or even cause additional health problems.
3. Funeral & cemetery scams
In one type of funeral scheme, fraudsters use obituaries to find out information about the deceased in an attempt to extort money from family members or grieving spouses. They claim the deceased has an outstanding debt that must be paid immediately. Those close to the deceased are usually in a vulnerable state and are more likely to pay the fraudulent debt. In another scheme, dishonest funeral directors might try to deceive the elderly by capitalizing on their unfamiliarity of funeral costs and sell them unnecessary services, such as a casket when the deceased is going to be cremated.
4. Fraudulent anti-aging products
With society putting so much emphasis on physical appearance, many individuals feel the need to find treatments or products that claim to help them conceal their age. Scammers advertise anti-aging products that are either worthless or harmful. Some products might contain materials that can be harmful, yet touted by scammers as being as effective as a brand name product, such as Botox. Scammers might also advertise products as being effective and natural, but in reality the product has no anti-aging effects.
5. Telemarketing/phone scams
Phone scams are the most common scams used against the elderly. Scammers try to get seniors to wire or send them money by claiming to be a family member who is in trouble and needs money. They might also solicit money from the elderly by posing as a fake charity, especially after a natural disaster.
6. Internet fraud
Since the elderly are usually not as savvy with handling emails and surfing the internet, they are easy targets for scammers. Victims have been tricked into downloading fake anti-virus software that allows scammers to access personal information on their computers. Seniors might also respond to phishing emails sent by scammers asking them to update their bank or credit card information on a phony website.
7. Investment schemes
Many seniors plan for retirement or manage their savings after they finish working, which makes them more vulnerable to become victims of investment schemes. Fraudsters can take advantage of victims by posing as financial advisors to get access to their retirement funds and savings. Once they have access to the funds, they take their money and run.
8. Homeowner/reverse mortgage scams
Elderly victims who own their homes can be valuable assets to a scammer. Scammers might send out fraudulent, yet official-looking, letters to victims that list the supposed assessed value of their home. For a fee, the scammers inform them that the value of their home can be reassessed. Scammers might also approach victims about providing home repairs and pressure them to take out equity to use as payment for the repairs.
9. Sweepstakes and lottery scams
This scheme usually involves contacting elderly victims either by mail or telephone, and informing them that they have won a prize of some sort, but must pay a fee to obtain the prize. Scammers send a fake check to the senior to deposit in their bank account knowing it will take some time for the bank to reject the check. Meanwhile, the victim has sent the scammer money through wire transfer for fees or taxes on the prize. The victim soon realizes that he was scammed when the check doesn’t clear.
10. The grandparent scam
This scam is extremely deceptive because it plays on the elderly’s emotions. In a grandparent scam, a scammer calls an older person and pretends to be their grandchild. They ask them if they know who is calling, and when the grandparent guesses the name of one of their grandchildren, they pretend to be that grandchild. The scammer tells the grandparent that they are in some sort of financial bind and asks if they can send money using Western Union or a MoneyGram to help them out. The scammer asks the grandparent not to tell anyone about their situation. Once the scammer receives the money, he continues to contact the grandparent and asks them to send more money.
If you suspect elder financial abuse, don’t be afraid or embarrassed to talk about it with someone you trust. You are not alone, and there are people who can help. Doing nothing could only make it worse.
Theft should be reported to law enforcement officials, and there are local and state social services agencies in every state to help elderly victims of financial abuse. The National Center on Elder Abuse (NCEA) can point residents in every state to an elder abuse hotline.
Additionally, to help with investment issues, the Financial Industry Regulatory Authority (FINRA) has a toll-free help line (844-57-HELPS, or 844-574-3577) that senior investors can call if they have questions about their brokerage accounts, including statements and individual investments. The hotline is open Monday - Friday 9 a.m. to 5 p.m. ET.
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