Financial Scams and Seniors

Financial Scams and Seniors

Financial scams targeting seniors is now considered the crime of the 21st century.
Scientists have found that, as we age, our brains are less able to detect fraud. It’s not just cognitive decline. We’re less likely to pay attention to the negative. We’re more trusting. We’re less likely to notice deceit. Why?
Because our brains shrink, we get less of those gut-feeling signals that something is wrong. Also, the connectivity of the brain fades with age, making it harder to pick up on and avoid sinister intentions.
Socio-emotional changes with age make us more vulnerable to online phishing attacks (where a scammer tries to trick a person into handing over personal information or downloading malicious software). For example, a nice invitation to join a group might make us ignore warning cues, such as obvious misspellings or suspicious email addresses.
The best law to live by as we age is “If it’s too good to be true, it is.” Don’t trust anyone or anything that looks too good to be true.

Information on brain changes and fraud is available in:

https://www.cnbc.com/2018/04/30/aging-brains-become-less-able-to-detect-fraud.html

Top 10 Financial Scams

https://www.ncoa.org/economic-security/money-management/scams-security/top-10-scams-targeting-seniors/ 

1. Medicare/Health Insurance Scams

A scammer tries to steal a senior’s personal information, bills Medicare for services or supplies the senior never received, or pressures the senior into buying a new supplemental policy that might not be right for that person’s situation.

For more information, see:

https://www.mymedicarematters.org/2015 /07/5-steps-for-avoiding-medicare-scams/

2. Counterfeit Prescription Drugs

This scam operates on the Internet, where seniors go to find better prices on medications. The danger is that, not only might you buy a medication that won’t help your condition, you might buy an unsafe substance that could harm you.

3. Funeral and Cemetery Scams

Scammers read obituaries and attend the funeral service of a complete stranger. Claiming the deceased had an outstanding debt with them, the scammers try to extort money from relatives to settle fake debts.

Disreputable funeral homes may take advantage of the grief of widows and widowers, as well as their unfamiliarity with funeral costs, and add charges. For example, the funeral director may insist that an expensive casket is necessary for a cremation, which can be performed with a cardboard casket.

4. Fraudulent Anti-Aging Products

The anti-aging business attracts scammers, who might supply fake Botox or bogus homeopathic remedies. Because the root ingredient, botulism neurotoxin, is one of the most toxic substances known to science, the Botox scam can have horrible consequences.

5. Telemarketing/Phone Scams

Scammers prey on seniors, who as a group make twice as many purchases over the phone than the national average. Examples of these scams include:

  • The pigeon drop: The scammer found a large sum of money and will split it with the senior, if the senior will make a good-faith payment. Often, a second scammer poses as a trusted friend or lawyer or banker.
  • The fake accident ploy: The scammer gets the senior to wire money on the pretext that the person’s child or another relative is in the hospital and needs money.
  • Charity scam: The scammer solicits money for a fake charity, often after a national disaster.

6. Internet Fraud

Pop-up browser windows simulating virus-scanning software can fool victims into either downloading a fake anti-virus program (at a substantial cost) or an actual virus opens up information 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.

7. Investment Schemes

A number of investment schemes target seniors wanting to safeguard their cash for their later years, including pyramid schemes like Bernie Madoff’s and Nigerian princes looking for a partner to claim inheritance money.

8. Homeowner/Reverse Mortgage Scams

Scammers like to take advantage of seniors who own their homes. Seniors should carefully consider people who are pressuring them to obtain a reverse mortgage, or those who would benefit from the borrower accessing equity, such as home repair companies who approach the senior directly.

9. Sweepstakes and Lottery Scams

Scammers inform seniors they won a lottery or sweepstakes and must make some a payment to unlock the supposed prize. Often, seniors are sent a (fake) check to deposit in their bank account, knowing that while it shows up in their account immediately, it will take a few days before the check is rejected. During that time, the scammers quickly collect money for supposed fees or taxes on the prize, which they pocket while the victim has the prize money removed from his or her account as soon as the check bounces.

10. Grandparent Scam

The scammer calls a senior and says something like “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 any background research.

The scammer then asks for money to solve some unexpected financial problem (such as overdue rent, or payment for car repairs) to be paid via Western Union or MoneyGram, which don’t always require identification to collect. At the same time, the scammer begs the grandparent “Please don’t tell my parents, they would kill me.”

Shaku Atre
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