That special offer that sounds too good to be true? It probably isn’t.
Criminals who are intent at getting want, through no real work of their own, stop at nothing to do so. Sadly, many of those who fall most vulnerably for their scams are older citizens.
The Department of Justice says elderly people lose almost $3 billion each year to financial scams. They’re targeted over the phone, on the internet, through the mail, and even through complicated ruses like seminars and the obituary column. Even investigative agencies and authorities have had trouble targeting some of these scammers—much less the people who they take advantage of.
Taking precautions against smooth salespeople, brazen telemarketers, and fake internet profiles is necessary. But in most cases, the basic rule of “don’t believe everything you see” could be a strong foundation in protecting you from petty criminals. Here are some of the more common scams that aim straight for the older population:
Medicare and health scams
Fraudsters know what kind of buttons to push to raise our anxieties—and for older people, that means health concerns. There’s no avenue a dishonest person won’t take to grift elders when it comes to Medicare or other medical matters.
Phone calls from those claiming your coverage is about to expire or selling you new or updated policies are the most direct ways for would-be criminals to go after your livelihood. Other scammers send bills for services you never received or try to sell invalid supplemental insurance or counterfeit prescription medication. In almost all cases, these efforts are all geared to force you to provide private information about your financial accounts.
It’s a vicious business, run by people who exploit others’ vulnerabilities for their own gain. That’s the most important thing to keep in mind. Another is that, especially in the case of Medicare, legitimate medical insurers will never, ever ask you to divulge private information over the phone, by letter, or to a salesman.
If you have any qualms whatsoever about who you’re speaking to about medical insurance or any other scams, report them to Medicare (call 1-800-MEDICARE) or the Federal Trade Commission. For one thing, legitimate medical businesses will appreciate your help.
Telemarketing and phone scams
Scammers know that the telephone is the most effective way to target seniors—or, honestly, anybody. It doesn’t take too much acting skill to sound like an authority, especially when it’s delivered on the phone where there’s a voice with no face. With no hard evidence, physical interaction or paper trail to document the phone call, it can be extremely difficult to trace the culprits responsible.
Unfortunately, telemarketing scams are frequently directed to the elderly. They appeal to seniors’ generosity by pitching charities that don’t exist, or pretending to be long-lost grandchildren needing a handout, or ask for a financial donation promising a bigger return to you in the future (a scam known as the “pigeon drop”). Some of the more complex scams involve more than one person: a pitch person who places you on hold so you can talk to someone playing a “lawyer” or “accountant.”
Never talk a cold call at face value. In most cases, it’s fair to simply hang up. Don’t let sincere-sounding appeals to your good nature soften your stance. And make sure you know exactly how many grandchildren you really have.
There is no shortage of fraudulent investment plots. Unfortunately, that’s because they work. The “pyramid” scheme—also known as the Ponzi scheme—is one of the more common and insidious phony investment set-ups. As the Bernie Madoff scandal proved in 2008, even relatively savvy investors can fall victim to a well-orchestrated pyramid scam.
The premise involves a fraudster promising high yield of financial gain in return for a “modest” investment on your part. Even though they claim your investment pays for the development of a product that will be successful and earn a lot of money, in reality, it’s the constant accumulation of those investments, and the construction of a continuous payout scheme drawing only from those investments, that serve as the payout. This isn’t remotely legal, but there isn’t always a lot of legal recourse for those who are defrauded.
Remember: Sales pitches are written with a purpose in mind. If you hear someone promising big returns with “little or no risk,” or returns that will never change over time, they’re not contacting you because they’re concerned for your health. In general, anything that sounds too amazing to be real almost always isn’t. If you stay on the line long enough to get a name, use a tool like investor.gov to check if they’re licensed. If they’re not, they’re almost certainly illegitimate.
Cyberfraud against the elderly is big business. With more older users knowing their way around technology, internet fraud is like telemarketing fraud on steroids. It’s extremely easy for scammers to impersonate entirely different personalities that exist solely to grift seniors: older singles who ask for modest financial support, financial experts who need access to your savings account, and many other grifters in between.
Elderly people are not alone in succumbing to internet fraud. The web’s newness, popularity, and reputation as the source of all current knowledge make all users susceptible to web scams, young and old. But like telemarketers, internet fraudsters play on the vulnerabilities of older generations especially well: insecurity, loneliness, over-trusting, and most cruelly the fading mental comprehension of older people.
This is worth hammering home: Anyone who was a stranger to you a few months ago and is now suddenly asking for your password or account numbers, is almost certainly scamming you. Sadly, even those familiar to you who are requesting that information may be as well. Guard your personal information like your own life in all situations—especially over the internet.
Other common financial scams that target the elderly
- Funeral and cemetery scams: A con artist skims the obituary column to find upcoming funerals to attend, to start a relationship with grieving widowers or family. They may try to get money from the bereaved by claiming the deceased owed them money. Even disreputable funeral homes get in on the act, by tacking on additional service charges or—this is real—charging for permanent caskets for those who are cremated.
- Reverse mortgage schemes: Targeting older homeowners who have recently enabled access to their home equity, some scammers try to tap into those funds to funnel equity from flipped homes. These schemes can be run in a variety of legit-looking scenarios: TV and radio, investment seminars, mailers, even local churches.
- Sweepstakes scams: Yes, they still exist after all these years. Scammers contact you to offer you a gigantic cash prize, all-expense-paid vacations, or thousands of dollars in deluxe merchandise—if you just pay a transaction fee or the tax bills before you get the prize. Once again: If it sounds too good to be true… you know the rest.
It may be true that most people have good intentions at heart. But that truth ironically makes it easier for dishonest people to find those good intentions and take advantage of them. It’s especially enraging that older folks are the targets of those lawbreakers—and common sense must be your first weapon in standing up to them.