Older adults lose more than $36 billion every year to financial scams, according to a 2015 study. Unfortunately, con artists see the elderly population as an easy and vulnerable target.
Mike Rothman, president of the American Securities Administrators Association, told CNBC that scammers take this approach because the current elderly population is one of the wealthiest we’ve seen with such hefty retirement savings. Where the money goes, the con artists follow.
With so many scams targeting older adults, it’s essential to make yourself and your loved ones aware of the different types of cons. Here is a list of common financial scams that specifically target the elderly and how you can prevent them:
The grandparent scam
The grandparent scam is common because it appeals to older adults’ emotions. Scammers get the phone number of a senior and they call pretending to be a grandchild. Making their lie seem more believable, the con artist will playfully ask the older adult to guess what grandchild is calling. Of course, the first reaction will most likely be for the senior to name a grandchild and then the scammer can easily play along, acting like they guessed right. Now the grandparent thinks they are talking to their grandchild.
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The scam artist will then begin to confide in the grandparent, saying they are in a tough financial position and they need the grandparent’s help. Asking them to send money to a Western Union or MoneyGram, they plead for the grandparent not to tell anyone. If the grandparent complies and sends the money, the scammer will likely contact the senior again and ask for more money.
Avoid this scam:
Never send money to anyone unless you have 100% proof that it is who you think it is. Scammers can find out quite a bit of information from social media and other methods, so don’t think that just because they know a couple pieces of information about you and your family that it is legit. Verify that it is actually your grandchild on the phone by texting or calling the grandchild’s real phone number and verifying if it is him or her. Call the parent of the supposed grandchild and find out if the grandchild really is in trouble. Talk to your family members now and compile a list of questions only you and your family know the answers to. If a family emergency really does happen, you can ask the questions and know if it is your family member based on the answers.“Claim Your Prize Now!” sweepstakes scam
The sweepstakes scam is when con artists contact the elderly either by phone or email and tell them they have won something, whether that be a sum of money or another type of prize. To claim the prize, scammers tell them they have to pay a fee. Once the senior agrees, scammers send a fake check in the mail. Before the check doesn’t clear and seniors can realize it is a scam, they have already paid the “fee.”
Avoid this scam:
Do not give out any financial information over the phone or email. Practice internet safety by protecting your passwords, shopping on encrypted websites, and avoiding phony emails. Be skeptical of any message that says you have randomly won a prize and you must do something before you can claim it. Unless you specifically enter a contest, you most likely aren’t going to randomly win a monetary prize.Medicare scam
Because of the Affordable Care Act that allows seniors over the age of 65 to qualify for Medicare, scam artists don’t have to do much research about seniors’ health-care providers. This makes it simple for scammers to call, email, or even visit seniors’ homes personally and claim to be a Medicare representative.
There are a variety of ways these con artists use this Medicare scam to target the elderly. One way is telling seniors they need a new Medicare card and to do so, they need to tell the “Medicare representative” what their Social Security number is. An additional way is they can tell seniors there is a fee they need to pay to continue their benefits.
Avoid this scam:
Do not give out any information to someone you have not verified is from Medicare. Real Medicare employees should have your information on file so if you are skeptical, ask the person some questions to verify it is legitimate.The “Woodchuck” scam
A common scam to target seniors who live alone is the “woodchuck” scam. Scam artists will claim to be contractors and will complete house projects if seniors agree to let them.
The scammers will gain seniors’ trust and eventually come up with a variety of fake repairs that need to be done, such as a roof repair. This often results in seniors giving the fake contractors thousands of dollars.
Avoid this scam:
Make sure the person doing your home repairs is a professional. Find out what company they work for and call and verify they are indeed a legitimate contractor.Mortgage scam
Con artists are using senior homeownership to their benefit. The mortgage scam is when scammers offer a property assessment to seniors, telling them they can determine the value of their home. This scam has become increasing popular as housing confidence is hitting record highs and people are putting a large chunk of their income toward saving for new homes.
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The scam artists make the process look legitimate by finding the home’s information on the internet and sending seniors an official letter detailing all of the found information. The scammers do this because it is an easy way to con seniors into paying a fee for the requested information.
Avoid this scam:
Ensure the property assessment is legitimate by asking what company they work for and following up with the real company to verify.Talk to your loved ones
Older adults are often too embarrassed to tell authorities or a family member they have been scammed. Talk to the seniors in your life and let them know they can confide in you and let you know if they have been scammed. You can also have them read through this article and make themselves aware of the scams that could potentially target them in the future.
Check your credit regularly so you are aware of any suspicious activity on your accounts.
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