Seniors are particularly vulnerable to financial fraud, and they are common targets for scam artists. Experts recommend that seniors always maintain control of their money and assets and never invest in anything they don’t understand. They should also involve a financial adviser or family member in any unfamiliar transaction. Finally, they should remember that many scam artists are polite and well-mannered “salespeople” who prey on their fears and offer solutions. We will discuss some of the common frauds Seniors should be on the watch for:
- Selling Anxiety – Scams often start with unsolicited phone calls offering products aimed at easing a person’s fears. The company shipped products without getting an order and threatened legal action or verbally abused seniors who didn’t pay. Victims lose the cost of the product and could be exposed to identity theft.
- Youâve Won! – Another scam that often starts with an email or phone call, this one relies on a sense of hope rather than fear. Victims are told they’ve won a lottery or other large prize, but first they must transfer money to cover the accompanying taxes and fees. Victims face the loss of those funds, and identity theft is also a risk.
- Health Insurance Fraud – Mobile “health-care labs” sometimes park at retirement homes, malls, or health clubs, and fake or unnecessary tests are administered on “patients” whose identifying information is used to bill insurance companies and Medicare. Directed at the elderly by perpetrators who leverage the term “Medicare,” this scam seeks personal information and could expose seniors to identity theft.
- Fake Government Agents – A caller informs the victim they’ve missed jury duty, and unless they pay to satisfy a warrant, they’ll be arrested. Another scam, especially popular around tax time, involves telling victims they owe taxes and need to settle up right away. The scammers can be especially persistent and tricky, making the caller ID read “IRS” and arranging for follow-up calls by the “police.” Once submitted, payments are unlikely to be recovered.
- Fake Products – Some scammers sell fake products that promise youthful vibrancy and breakthrough treatments that have no side effects. These items may be harmless sugar pills that hurt only the victim’s wallet, but others can cause temporary paralysis or other physical harm. People lose money on fake products, but this kind of scam, as well as those selling cheap counterfeit prescriptions could also lead to serious illness or injury.
- Too Good To Be True Investments – Pyramid, Ponzi, or advance-fee schemes. Advance-fee schemes typically involve the sale of a product or service or arranging a so-called profitable venture in exchange for a finder’s fee. Once the fee is paid, the scammer disappears. Identity theft is also a risk.
- Stealing From the Grieving – Widows and widowers are told that their spouse had outstanding debts that must be settled. The con artists find widowed spouses by browsing public obituary listings. Sometimes the funeral home is the perpetrator and tacks on additional fees or pushes items you donât need, such as an expensive casket for a cremation. The bereaved can be scammed out of money or upsold on funeral expenses.
- Reverse Mortgage Scams – Many people’s life savings are tied to the equity in their homes, a prime target for thieves. Reverse mortgages are a popular way for seniors to take cash out of their homes without having to move. Scams related to this sometimes-useful tool come in many forms, from fees hidden in the fine print to failure to disclose the consequences of unexpected default. Victims can lose their homes, or be subject to excessive fees.
- Fraud Prevention Fraud – Scammers sometimes claim to be calling from a bank’s fraud-prevention department and request information such as a credit card security code or expiration date. Even if the caller ID looks like it’s from a bank, don’t be fooled. Never share personal or financial data. Victims face the immediate loss of money from their accounts, with the potential for even costlier identity theft.
These are only a few of the many ways in which scammers will try and get people to part with their hard earned money. Donât fall victim to any of these, always involve a qualified financial advisor or better yet a true fiduciary, that has your best interests in mind, when it comes to your money. Coach Pete DâArruda and his team at Capital Financial will make sure you donât take any unnecessary risks with your money and get scammed. Have peace of mind knowing that you have a team of qualified professionals on your side!