 (Copy from
http://www.ncoa.org/)Financial
scams targeting seniors have become so prevalent that they're 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 also often go unreported or can be difficult to
prosecute, so they're considered a "low-risk" crime. However,
they're devastating to many older adults and can leave them in a
very vulnerable position with little time to recoup their losses.
It's not just wealthy seniors who are targeted. Low-income older
adults are also at risk of financial abuse.
And it's 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.
Review our list below, so you can identify a potential scam.
1. Health Care/Medicare/Health Insurance Fraud
Every U.S. citizen or permanent resident over age 65 qualifies
for Medicare, so there is rarely any need for a scam artist to
research what private health insurance company older people have in
order to scam them out of some money.
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.
2. Counterfeit Prescription Drugs
Most commonly, counterfeit drug scams operate on the Internet,
where seniors increasingly go to find better prices on specialized
medications.
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.
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.
3. 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 widow or widower. 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.
4. 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 be working with the
root ingredient, botulism neurotoxin, which is one of the most toxic
substances known to science. A bad batch can have health
consequences far beyond wrinkles or drooping neck muscles.
5. Telemarketing
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/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.
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"Charity Scams"
Money is solicited for fake charities. This often occurs after
natural disasters.
6. 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) make
seniors especially susceptible to such traps.
One example includes:
Email/Phishing Scams
A senior receives email messages that appear to be from a
legitimate company or institution, asking them to "update" or
"verify" their personal information. A senior receives emails that
appear to be from the IRS about a tax refund.
7. 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.
8. 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% between 1999 and 2008, 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.
9. Sweepstakes & 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 that
they can deposit in their bank account, knowing that while it shows
up in their account immediately, it will take a few days before the
(fake) check is rejected.
During that time, the criminals will quickly collect money for
supposed fees or taxes on the prize, which they pocket while the
victim has the "prize money" removed from his or her account as soon
as the check bounces.
10. 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 when the mark
picks up, they 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.
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 a 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.
[Copied from
list by the
National Council on Aging] |
