At Odyssey, we serve not only our clients, but also their children, aging parents, and relatives. We help manage their finances and safeguard their assets, too. As June 15th is World Elder Abuse Awareness Day, we asked one of our trusted partners, Amy Hentschel, Founder and Owner of Senior Provisions, LLC, to write the following guest blog, highlighting the dangers of financial scams targeting seniors.
Financial scams targeting seniors have become so prevalent that they’re now considered “the crime of the 21st century.” Why? Because seniors are thought to have a significant amount of money sitting in their accounts. Financial scams also often go unreported or can be difficult to prosecute, so they’re considered a “low-risk” crime. However, they're devastating to many older adults and can leave them in a very vulnerable position with little time to recoup their losses. It’s not just wealthy seniors who are targeted. Low-income older adults are also at risk of financial abuse. And it's not always strangers who perpetrate these crimes. Over 90% of all reported elder abuse is committed by an older person’s own family members, most often their adult children, followed by grandchildren, nieces and nephews, and others (Source: National Council on Aging).
Here are the Top 5 Scams most frequently perpetrated:
1. Health Care/Medicare/Health Insurance Fraud
Every U.S. citizen or permanent resident over age 65 qualifies for Medicare, so there is rarely any need for a scam artist to research what private health insurance company older people have in order to scam them out of some money.
In these types of scams, perpetrators may pose as a Medicare representative to get older people to give them their personal information, or they will provide bogus services for elderly people at makeshift mobile clinics, then use the personal information they provide to bill Medicare and pocket the money.
2. Funeral & Cemetery Scams
The FBI warns about two types of funeral and cemetery fraud perpetrated on seniors.
In one approach, scammers read obituaries and call or attend the funeral service of a complete stranger to take advantage of the grieving widow or widower. Claiming the deceased had an outstanding debt with them, scammers will try to extort money from relatives to settle the fake debts.
Another tactic of disreputable funeral homes is to capitalize on family members’ unfamiliarity with the considerable cost of funeral services to add unnecessary charges to the bill.
In one common scam of this type, funeral directors will insist that a casket, usually one of the most expensive parts of funeral services, is necessary even when performing a direct cremation, which can be accomplished with a cardboard casket rather than an expensive display or burial casket.
Perhaps the most common scheme is when scammers use fake telemarketing calls to prey on older people, who as a group make twice as many purchases over the phone than the national average.
While the image of the lonely senior citizen with nobody to talk to may have something to do with this, it is far more likely that older people are more familiar with shopping over the phone, and therefore might not be fully aware of the risk.
With no face-to-face interaction, and no paper trail, these scams are incredibly hard to trace. Also, once a successful deal has been made, the buyer’s name is then shared with similar schemers looking for easy targets, sometimes defrauding the same person repeatedly.
Examples of telemarketing fraud include:
“The Pigeon Drop”
The con artist tells the individual that he/she has found a large sum of money and is willing to split it if the person will make a “good faith” payment by withdrawing funds from his/her bank account. Often, a second con artist is involved, posing as a lawyer, banker, or some other trustworthy stranger.
“The Fake Accident Ploy”
The con artist gets the victim to wire or send money on the pretext that the person’s child or another relative is in the hospital and needs the money.
Money is solicited for fake charities. This often occurs after natural disasters.
4. Internet Fraud
While using the Internet is a great skill at any age, the slower speed of adoption among some older people makes them easier targets for automated Internet scams that are ubiquitous on the web and email programs.
Pop-up browser windows simulating virus-scanning software will fool victims into either downloading a fake anti-virus program (at a substantial cost) or an actual virus that will open up whatever information is on the user’s computer to scammers.
Their unfamiliarity with the less visible aspects of browsing the web (firewalls and built-in virus protection, for example) make seniors especially susceptible to such traps.
One example includes:
A senior receives email messages that appear to be from a legitimate company or institution, asking them to “update” or “verify” their personal information. A senior receives emails that appear to be from the IRS about a tax refund.
5. The Grandparent Scam
The Grandparent Scam is so simple and so devious because it uses one of older adults’ most reliable assets, their hearts.
Scammers will place a call to an older person and when the mark picks up, they will say something along the lines of: “Hi Grandma, do you know who this is?” When the unsuspecting grandparent guesses the name of the grandchild the scammer most sounds like, the scammer has established a fake identity without having done a lick of background research.
Once “in,” the fake grandchild will usually ask for money to solve some unexpected financial problem (overdue rent, payment for car repairs, etc.), to be paid via Western Union or MoneyGram, which don’t always require identification to collect.
At the same time, the scam artist will beg the grandparent “please don’t tell my parents, they would kill me.”
While the sums from such a scam are likely to be in the hundreds, the very fact that no research is needed makes this a scam that can be perpetrated over and over at very little cost to the scammer.
If you suspect that you’ve been the victim of a scam…
Don’t be afraid or embarrassed to talk about it with someone you trust. You are not alone, and there are people who can help. Doing nothing could only make it worse. Keep handy the phone numbers and resources you can turn to, including the local police, your bank (if money has been taken from your accounts), and Adult Protective Services. To obtain the contact information for Adult Protective Services in your area, call the Eldercare Locator, a government sponsored national resource line, at: 1-800-677-1116, or visit their website at: www.eldercare.gov.
Amy Hentschel founded Senior Provisions, LLC in 2011 with the passion to serve the Atlanta senior community and help families find true care solutions. With over 25 years of experience in senior care, she brings an extensive knowledge of skilled rehab facilities, assisted living communities, and home care options to share with families. Senior Provisions can help families navigate through care options helping you to find resources at home or placement at a community. To learn more go to www.SeniorProvisions.com or call 1-888-979-8783 for NO COST senior care consulting.
Amy Hentschel is not registered or affiliated with Cetera Financial Specialists LLC or its affiliates.