You can take all the necessary steps to prepare your estate plan and finance your retirement, but one bad scam can ruin your financial plan. You’ve probably been cautioned about it before, but there are a lot of creative scammers out there who target older people. They come up with creative stories and pretend to be a family member, or they pretend to be affiliated with the government, among many other tactics. While it can be hard to know you’re being scammed, you can start with knowing the top 10 tactics, as discussed by the National Council on Aging in their article, “Top 10 Financial Scams Targeting Seniors”.
1) Medicare/health insurance – Since every U.S. citizen over 65 qualifies for Medicare, this is an easy scam for perpetrators to attempt as it requires little research. Typically, a scammer will pretend to be a Medicare representative and fish for personal information. They are also known to provide fake services at makeshift mobile clinics and then bill Medicare using your personal information to collect money.
2) Counterfeit Prescription Drugs – These kind of scams are usually conducted on the internet and are geared towards seniors who are trying to find better prices on specialized medications. This can not only result in someone purchasing a “prescription” that is not effective, but also in a substance that could be even more harmful.
3) Funeral and Cemetery Scams – There are two types of attacks that are common within this. The first is a scammer will read obituaries and then show up to a funeral service and claim the deceased had an outstanding debt, and they will try to take advantage of the grieving spouse or other family members to settle these fake debts. The other type is committed by disreputable funeral homes that take advantage of family members’ inexperience with funerals and their costs and they add unnecessary charges.
4) Anti-Aging Products – Many older people want to take care of their skin and/or work to maintain a youthful appearance, but this can put you at risk for scammers as well. There is fake Botox and homeopathic remedies that don’t do anything. A bad batch of Botox can have negative health consequences. Be on guard about where you go for skin care.
5) Telemarketing/Phone Scams – The is a very common scheme, since older people do a lot of shopping over the phone, they can become an easy target. There is no face-to-face interaction nor a paper trail, making it hard to catch these scammers. Once they are successful with a buyer, they then share the name with others so they can try to continue to defraud them. A few examples are “the pigeon drop”, where the con artist will say they found a large sum of money and will split it if the person makes a “good faith” payment. There can be a second scammer involved posing as a trustworthy professional. There is the “fake accident ploy”, where they use the pretense of a relative or child being in the hospital and they need money wired, this can also be coupled with a story of being in jail and injured, so they only have so much time on the phone and they want to keep the incident quiet. Another is “charity scams” where a con artist asks for donations to fake charities, these frequently occur after natural disasters.
6) Internet Fraud – There are a lot of automated internet scams, from pop-up browser windows simulating virus-scanning software that when downloaded either is a fake program that will give access to information opened on the computer or is a virus itself, to email phishing scams asking for updated or verification of personal information. There are even scams that seem to be from the IRS about tax refunds.
7) Investment Scheme – Since planning for retirement and managing savings is important for seniors once they finish working, this has become a popular area to target for scams. These schemes want to “safeguard cash”, there are pyramid schemes, and fables like the Nigerian prince looking for a partner to claim inheritance money.
8) Homeowner/Reverse Mortgage Scams – These can come in property tax scams and reverse mortgage, they all tend to be complex, so double checking with people by phone or in person can be helpful to detect these scams. Make sure you talk to more than one professional or personnel person as well.
9) Sweepstakes & Lottery Scams – This is probably intuitive, but a scammer will tell you that you have won the lottery or some sweepstakes, but in order to access the winnings you have to make a payment. Usually, the con artist will send you a bad check that you can deposit, it will show immediately in your account because it can take time for the fake check to be rejected, during this brief period the criminal will cash the money you sent to collect the prize.
10) Grandparent Scam – A scammer will call you on the phone and say “Hey Grampa, guess who!” When the grandparent answers with the name of who the person most sounds like then the scammer has a fake identity without having to do any research. Then they will usually ask for money to solve a big problem that their parents can’t know about and have the money be sent via Western Union or MoneyGram since they don’t always require identification. They may also say that it has to be cash only and overnighted.
Scams are a low cost way for people to try and get quick money in a way that isn’t always traceable. So, remember, being informed is part of guarding against being scammed, but there are a couple other tips. When someone calls pretending to be a family member and is asking something financial of you and it doesn’t seem right or is in the context of a sensitive story, after you get off the phone make sure you then call that family member you were supposedly talking to right back, then maybe call another close family member to ask questions, like when was the last time they saw the person or what the person has been up to. If you receive an email you’re unsure about, always call the company or person to double check.
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Reference: National Council on Aging, “Top 10 Financial Scams Targeting Seniors”