Woman Talking On PhoneA 2009 study by MetLife's Mature Market Institute estimated that seniors lose approximately $2.6 billion per year because of fraudulent schemes. According to no less an authority than the FBI, members of the "Boomers and Beyond" cohort are especially likely to be the victims of scams because those "who grew up in the 1930s, 1940s, and 1950s were generally raised to be polite and trusting." Con artists are masters at exploiting these qualities because they know it's hard for the well-mannered among us to say 'no' or just hang up the telephone. We obviously need to toughen up, spot scams, and foil those who want to fleece us! Here are some of the most common types of fraud that target seniors, plus tips for avoiding getting swindled:
The Grandparent Con
You answer the phone and the caller says he's your grandson. You're not sure that's really his voice so your instinctive response is, "Michael?" Bingo! Your con artist now knows your grandchild's name and has a good shot at convincing you he truly is "Michael." Then he tells you he's been in an accident out of state and is using a pal's cell phone. He needs money and he wants you to wire it to help him out. Don't do it! Challenge your caller and he'll hang up. Then just for your peace of mind, call the real Michael or his parents to find out if he actually is away from home. Almost certainly, he's not, and he's just fine!
Unlicensed con men prey on unsuspecting homeowners by showing up at the front door and offering great deals. They say they just happened to be in the neighborhood and they've finished a job nearby so they have material left over. They can fix your roof or your siding for a song. You give them the money and they leave to get their tools and supplies - but never come back. Or if they do return, their work is shoddy. When you need something repaired, call a bonded and licensed contractor!
The Sweepstakes Mail Scam
You might get an envelope in the postal mail that asks you to buy some fairly inexpensive products in order to be entered in a sweepstakes. The tip-off here is that requiring purchases to ensure entry is illegal. Bona fide sweepstakes may offer you the chance to buy stuff, but purchases are not mandatory to enter.
The "You're a Winner" Scheme
This is another postal mail ploy. You get what looks like a genuine check with a cover letter saying you won the lottery in some foreign country, plus a request to wire a portion of your "winnings" to the scammer, allegedly to pay for "administrative costs and taxes." Even if the counterfeit check initially clears, the bank will quickly catch the error and you'll be out whatever sum you sent to your perpetrator.
Medical Equipment Fraud
Purported manufacturers offer you "free" products and then Medicare is charged for items you never needed or that weren't even delivered.
Older women living alone are the favored targets of scammers selling phony products and services over the phone. The FBI says these scams often involve offers of free prizes, low-cost vitamins and health care products, and inexpensive vacations. If you hear something along the lines of "Act now, or the offer won't be any good," hang up immediately. Also, if you're told you're getting something free but that you have to pay for "postage and handling," don't fall for it! But the worst scam of all is the one in which your caller says you have to give a credit card or bank account number. Do that, and you're falling right in the identify theft trap.
You've probably already gotten the Nigerian email about using your bank account to deposit the foreigner's funds. We hope you were savvy enough to delete it! Again, giving out your personal finance information is tantamount to handing over your identity to the would-be thief. There are other web scams as well, including a version of the one in which someone poses as your grandchild stranded away from home and in need of money. For a full list of these cyberscams, visit the FBI's Internet Fraud webpage. You'll find details plus tips for protecting yourself from them.
You may have wondered how all those people fell for Bernard Madoff's elaborate Ponzi scheme, but unfortunately people planning for retirement make unwise investments pretty frequently. Be sure you have a certified financial planner you can trust.
Reverse Mortgage Scams
The FBI says that reverse mortgage scams are "engineered by unscrupulous professionals in a multitude of real estate, financial services, and related companies to steal the equity from the property of unsuspecting senior citizens." Ouch! Don't let that happen to you. Remember, a legitimate loan product is insured by the Federal Housing Authority.