Scammers are the bane of the senior citizen community. These ruthless and dishonest individuals often target older adults. In some cases, physical or mental impairments make seniors more vulnerable to scams. In other cases, they fall victim because of a too-trusting nature, the lure of a good bargain or the promise of human companionship. Being mindful of scams and safeguarding financial assets are keys to helping our aging parents from being victimized.
True Link Financial, a San Francisco-based financial services firm that helps seniors and their families avoid fraud and financial abuse, estimates that American seniors lose nearly $10 billion to scam artists and another $3 billion to identity theft. Another $17 billion is lost to technically legal but deceptive practices that are perpetuated against older Americans.
Scams, Both New and Old
As described in the True Link research report, one of the classic scams that targets seniors is the “grandparent scam,” in which an elderly person receives a phone call from his or her “favorite grandson.” The grandparent usually volunteers the name of the grandson, and the caller assumes the identity of that person with a story of being arrested in a foreign country and needing money wired overseas in order to post bail.
In other scams, scammers claim that the senior has won a lottery or a valuable prize but has to send money in order to claim it. Additional scams involve fake home improvement contractors or product vendors (hearing aids are an often-cited item) that trick seniors into providing them with money or credit card information.
Scammers never run out of new ideas in their attempts to defraud seniors. “The senior scams we’re seeing on the rise these days are the ‘gift basket scam’ and the ‘work-from-home scams,’ ” says Kai Stinchcombe, CEO for True Link Financial. The gift basket scam involves delivery of a gift basket with a bottle of wine. The senior has to show a photo ID in order to receive an alcoholic product and is asked to pay a small fee to confirm receipt of the package. With the individual’s credit or debit card information in hand, the scammers run up thousands of dollars in online charges in a matter of hours.
Work-from-home scams, meanwhile, feature expensive set-up fees, hefty upfront product investments, and payment terms that are based upon the senior’s ability to recruit friends and family—all classic signs of a pyramid scheme.
Many newer scams are perpetuated online and often involve people purporting to be someone whom they are not. “Watch out for new friends or romantic interests that Mom or Dad has met online,” Stinchcombe cautions. It’s important for seniors to get out and about and to stay connected with others. “But you’ve got to make sure you do it safely. We recommend Stitch or other sites that are mindful of these needs and verify the identities of the people you’re meeting.”
Other scams relate to some of the hot topics in the news. For instance, immigration scams involve bogus warnings that the targeted individual must pay a fee in order to comply with new rules pertaining to their immigration status. Healthcare scams involve scammers calling seniors with the news that they need to renew their Medicare by reading the number off the front of the Medicare card, but in reality this is just an underhanded way to get the individual’s Social Security number. The latest scams involve fake religious organizations trying to tap into what is going on with the new gay marriage ruling, fake PACs being set up in conjunction with the upcoming election, and fake investment scams meant to tap into the unease that people are feeling about the turbulence in the stock market.
“None of this is real, but it sounds real because it’s related to something the person saw on TV and they expect there to be unusual steps they have to take,” Stinchcombe says.
How Adult Children Can Help Protect Seniors From Scams
Because of the relentlessness of scammers, adult children should try to help in useful but not intrusive ways. “You need two sets of eyes on the road,” Stinchcombe advises. “Most important is keeping a cooperative relationship. You’re there to preserve and protect their independence, not restrict it. Mom or Dad needs to know that, but you need to remember it also. If they want an all-in-one vacuum cleaner and mop, it’s their money.”
There are resources to help adult children keep tabs on the financial resources of their elderly parents to ensure that a scam doesn’t occur. “The best thing is to set up real-time monitoring of people’s investment accounts and primary form of payment,” Stinchcombe says. This service is offered by True Financial as well as other companies such as EverSafe. Mint.com also is available as a resource for monitoring financial information.
One way to determine whether your parent is vulnerable to scammers is to pay attention to the number of telemarketing calls they are receiving. True Link’s research indicates that a person who receives just one telemarketing call per day is likely to experience triple the financial loss of those who receive no telemarketing calls. “The reason they call is because predatory merchants have found a sales pitch they think will work consistently,” Stinchcombe says.
Victim of a Scam? What to Do…
If you find that your parent was the victim of a scam, Stinchcombe advises: “Don’t make Mom or Dad feel stupid! This happens to everyone, and actually more so to people who are well-educated, financially sophisticated and friendly.”
While it is useful to let your bank and the police know what has occurred, depending upon the type of scam, Stinchcombe reports that there often is little that can be done. “The thing to focus on is making sure it doesn’t happen again,” he says. “Depending on Mom or Dad’s condition, a conversation may be enough, but bringing a trusted family member in the loop to partner with them as they age is the only solution that will last, and it’s easier to have that conversation early rather than late.”
CHIME IN: Have you or someone you loved ever fallen victim (or almost fallen victim) to a scam? Share your experience in the comments…