As senior scam crooks rake in a fortune, we expose their favorite tricks and explain how to avoid them: Internet Scambusters #401
Senior scam crime is on the rise, netting $2.6 billion a year and hitting one in five people in this age group.
Seniors are an attractive target because some scams apply mainly to them, or because they're more trusting or more prosperous.
In this issue, we identify 10 of the most common senior citizen scams, together with the actions you can take to avoid them.
Before we get started, we suggest you visit last week's most popular articles from our other websites:
How To Maintain a Below Average Credit Card Debt: Find out the average credit card debt and how to make it your goal to stay beneath this benchmark.
5 Tips for Avoiding Identity Theft While On Vacation: Remember to follow these identity theft tips to avoid an unpleasant surprise when you get back home.
Helpful Tips for Acne Sufferers with Dry Skin: To avoid drying and cracking when treating your acne, try these helpful tips.
Give Your Favorite Environmentalist a Solar Cooker: Learn the pros of giving a solar cooker as a gift, along with the very few drawbacks.
Time to get going...
Beware Of These 10 Common Senior Scam Tricks
Senior scam victims in the United States hand over at least $2.6 billion to crooks every year, according to recent newspaper reports, with as many as one in every five seniors losing money.
Although today's senior citizens may be mentally sharper than ever, they still make a prime target for con artists because they generally have more disposable income -- cash nest eggs they don't need for any specific purpose -- and because they're usually more trusting.
However, it's also true that longer life expectancy means a growing generation of vulnerable elders in their 80s and 90s who live alone, suffer from memory loss or simply become confused or frightened by smooth-talking scammers.
Senior citizen scams have been featured several times in earlier issues of Scambusters, including those dealing specifically with investment fraud and lotteries.
Some senior scams actually affect all sections of the population but others are directly targeted at the older age group, and we start with this category in our rundown of 10 of the most common senior scam tricks.
Age-related Senior Citizen Scams
1. The grandparent scam is possibly the most widespread senior scam, where the victim receives a call supposedly from a grandchild in trouble abroad and needing money urgently.
We reported in full on this type of senior scam in a previous issue, Scammers Pose as Grandchildren to Swindle Grandparents.
Usually the excuse is that the cash is needed to post bail and has to be a money wire payment is a dead giveaway for a scam.
However, in a new and particularly nasty variation, victims were told their grandchild had been kidnapped and that they had to pay a ransom.
In some cases, the crooks knew something about the grandchild and used an accomplice to impersonate their voice.
Even more cunningly, they earlier phoned the genuine grandchild, pretending to be from a cell phone company, telling them to switch off their phone for a maintenance project, thus preventing the grandparent from checking the story.
Action: Read our earlier report and never send money before confirming the whereabouts of the grandchild.
2. Medicare fraud is another senior scam we previously covered in depth.
As our article The Huge Medicare Scam Costs That Hit Every Pocket explained, most of these cons actually target Medicare rather than individuals, though they do rely on duping seniors into becoming unwitting accomplices.
But sometimes they aim directly at seniors, the most recent example being the bogus Medicare refund scam, in which the crook asks for personal information, including Medicare card details, supposedly so a $250 check can be issued to cover the gap in covered prescription charges.
In fact, they want the details for identity theft.
Action: Read our earlier issue and never provide confidential information over the phone unless you're 100% sure the caller is genuine. The $250 check, by the way, is mailed out automatically to those who are entitled. No phone calls or information are needed.
3. Other health-related scams not directly linked to Medicare include offers of "free" equipment or supplies, with charges hidden in the fine print of a document you must sign, and tests, including ones for diabetes, that are either unnecessary or unreliable.
Senior scam artists also exploit health concerns of older folks by bombarding them with spam offering virility, anti-aging and memory improvement products or services whose effectiveness has no scientific basis of proof.
Action: Always work with your doctor or other reputable health professional for any medications or equipment you think you might need.
4. Two mortgage scams specifically try to trick seniors.
First, reverse mortgage scams target those aged 62 and up, with schemes that offer a poor financial return or trick victims into signing over the deeds to their homes. See Scammers Pose as Grandchildren to Swindle Grandparents for more information.
Second, a new senior scam has shown up -- the Deed of Reconveyance scam. The deed is a publicly-available document, drawn up when a mortgage is paid off.
Scammers access these online and write victims, offering to supply the document, usually with an implied threat of legal problems if they don't get a copy and pay a fee of around $175.
Action: Read our earlier report and don't take out a reverse mortgage without first getting advice from a trusted financial professional. As for the Deed of Reconveyance, you should have received it when you paid off the mortgage. If not, get a copy yourself, for free or for a small processing charge, from your county public records office.
5. Funeral and cremation scams usually involve overcharging, "upselling" -- persuading you to buy the most expensive items, and bogus claims of costly services supposedly needed to meet legal requirements.
Action: Check out our earlier coverage of this type of senior citizen scam.
Senior Scams that Also Target Other Age Groups
A number of scams affect all age groups but more frequently snag seniors because of their relative wealth, their trusting nature or their unfamiliarity with the technology or techniques involved.
6. Investment scams include Ponzi schemes, bogus financial advisers, and complex or fraudulent schemes that promise (but don't deliver) big returns.
Sometimes, seminars or free lunches provide a front for this crime (though, of course, many legitimate investment marketing promotions use this approach).
You might even be conned by a new "friend" you meet at church or in other community groups who offers you a tip or opportunity to invest in a scheme. This is affinity fraud, which we covered in an earlier issue, 7 Deadly Sins: Investment Scams Promise Shortcut to Economic Recovery.
Action: Check out the issues mentioned above. Always seek professional advice from a trusted source before committing money to any scheme. A useful source of information for senior citizen scams in this category is the non-profit Investor Protection Trust which recently helped launch The Elder Investment Fraud and Financial Exploitation Project.
We've grouped together a few other tricks based on what you might call the silver tongue of the con artist -- plausible stories aimed at persuading you to part with your money.
Again, these might affect any age group but particularly seniors:
7. Bogus contractors who claim you need major structural repairs on your home -- usually the roof -- or offer to do a cut-price driveway repaving.
Action: Never agree to on-the-spot "repairs" on the say-so from someone you don't know. Always check the claim with a licensed contractor recommended by a friend or relative.
8. Telemarketers using high-pressure techniques to sell you things you don't want. Action: Get your name on the official Do-Not-Call Registry and if you feel under pressure on a call just hang up. If the caller persists, tell them you're calling the police -- and then do that.
9. Bogus lottery winnings. Sadly news reports are littered with stories about seniors who believed they'd won a fortune on a lottery then paid a real fortune on supposed fees to try to collect their winnings. Action: Never pay a cent to collect "winnings."
10. Scareware -- those pop-ups on your computer screen that tell you your computer is infected with a virus, then invite you to download a program to put it right (which you either pay for or which really is a virus). Action: Install Internet security software from one of the big name providers and keep it up to date, then ignore all those phony warnings.
For more general advice on senior scams, you might check out this useful advice page from the FBI.
And don't forget, just because you're too smart to be caught out by these tricks, you'll still be a target, and, whether you're a senior or not, so will other people you know.
So please pass this information to anyone you know who might become a victim of a senior scam. Thanks!
That's a wrap for this issue. Wishing you a great week!