Scammers are evil but not stupid. They prey on targets of opportunity. Seniors are often vulnerable to cons because of cognitive problems that can impair judgment. Isolation and sometimes loneliness can also make seniors dangerously trusting.
You’re unlikely to fall for a scam that you’ve been forewarned about, so we’ve compiled a list of 10 common scams that are draining the savings of seniors across the U.S. Stay vigilant and warn your older loved ones about these cons.
Here are 10 common tactics fraudsters use to separate seniors from their money:
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1. The Grandparents Scam
We were first alerted about this scam when the mother of one our own staff was targeted. Judy Somers, mother of our senior director of content and SEO, received a call from someone claiming to be her grandson, and asking for financial help.
Fortunately, Somers was fully aware the gruff-voiced caller was not one of her young grandchildren and that it was an obvious impostor. But not all seniors are so lucky, and many fall victim to this trick. The National Council on Aging explains:
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.
The impostor will then claim to be in trouble and that he or she needs money for rent, bail or something of the like. Scammers will often ask for money to be sent to Western Union.
How to Avoid: If you receive a suspicious phone call from someone claiming to be a relative or loved one, say you’ll call back, and check the story with other relatives. Note that these scammers can get information about you and your relatives off of social media sites like Facebook. Most scammers aren’t this sophisticated, but the tactic is not unheard of, so don’t be fooled if a suspicious caller references details from your life or a relative’s.
2. Investment Schemes
Whether it’s pyramid schemes, your friendly neighbor selling cheap plots of land as a “sure-fire” investment opportunity, or a gentleman at your church who gets a little too persuasive when he tries to get folks to take advantage of their “once-in-a-lifetime opportunity” to spend their savings on penny-stock in a company that has supposedly just discovered the “largest untapped yttrium deposit east of the Black Sea” – beware!
Seniors are ripe targets for scams like these. For instance, many of the victims of Bernie Madoff’s investment scheme were seniors. The National Council on Aging notes: “Because many seniors find themselves planning for retirement and managing their savings once they finish working, a number of investment schemes have been targeted at seniors looking to safeguard their cash for their later years.”
How to Avoid: Remember that if it sounds too good to true it probably is. Be suspicious of anyone who promises massive returns on an investment and be sure to only deal with reputable and credible institutions.
3. Email Scams
All kinds of nasty scams spread via email. Email scams are often variations on the investment scam or the lottery scam. Many emails purport to be from a rich or well-connected individual and claim that they can give you a cut in their fortune if you will just offer a little assistance to them.
These are known as 419 scams or “Nigerian email scams” (although the email’s country of origin is not always Nigeria). The stories vary widely, but targets are led to believe they’ll be given a fortune, but end up spending a fortune.
Some victims will get more and more engrossed in the trap, go into denial, and send multiple payments in hope of getting the big payout they were initially promised. Many times, family members can’t convince their victimized loved one that they are being scammed, even after they have lost everything. It’s as if the victim has become enchanted.
Other email scams include “phishing” scams, whereby an email will look like an official email from a legitimate institution. The email may lead to a web page that is also fake, but that carefully imitates the branding of the site it is copying. It might copy the look of a banking website, for example. The aim is to extract passwords, bank account information, and other personal data.
These are only some of the many scams where email is the medium. Email is an effective medium for scammers because they can send millions of emails simultaneously and if only one or two people fall for the bait, the scammers will recover their costs and more. The fact that the scammers use online tools to cover their tracks and typically operate from outside the United States makes tracking and prosecuting them difficult to impossible.
How to Avoid: Be inherently distrustful of unsolicited emails and don’t disclose private information online except to a trusted organization. If you have questions about whether a communication you received is legitimate, call that organization directly.
4. Sweepstakes and Lottery Scams
This trick is old but still lives. Essentially a victim is told they have won a sweepstakes or lottery, but that they must make a payment to “unlock” their winnings. (As noted above, some emails use this tactic). Often, seniors who fall for the ruse are sent a check that initially appears to have great value, and only a few days later, bounces. During that lag time, “the criminals will quickly collect money for supposed fees or taxes on the prize, which they pocket.”
How to Avoid: Be wary, again, of what seems to be too good to be true. Remember that if you have won a sweepstakes, you shouldn’t be asked to pay mysterious and suspicious fees within a day or two of the award.
5. Medicare Card and Medicaid Card ID Theft Scam
Callers claiming to represent various government agencies or organizations tell seniors that their Medicare or Medicaid cards must be replaced. This is merely a ruse to get a senior’s personal information for the purpose of identity theft.
How to Avoid: Never give personal information like your social security number or banking information over the phone, and be suspicious of calls from people who claim to represent official agencies and then request personal information.
6. Charity Scams
This scam of particular moral repugnance occurs in the wake of major disasters. Callers claim to represent a charity seeking money to help pay for disaster recovery or aid for the victims. The money goes nowhere but the criminal’s bank accounts. Some charity scammers will send emails soliciting donations.
How to Avoid: If you wish to donate to charity following a disaster seek out the charity yourself. Do not make donations to organizations that cold-call you.
7. Repair Fraud
Repair fraud is all too common. As I note in a personal reflection below the list, my grandmother fell victim to this type of fraud more than any other. Her tires were replaced several times a year. Unnecessary car repairs were ordered and duly paid for (sometimes twice). A “friendly” neighbor would charge hugely exorbitant amounts of money for the simplest yard work. This happens all too often, and may be a sign your loved one has developed dementia.
How to Avoid: If you find yourself making poor purchasing decisions, talk to a younger family member about getting help, and possibly a financial power of attorney. If a younger relative has financial power of attorney, sometimes the costs of these fraudulent charges can be reversed.
8. Fraudulent Anti-Aging Products
As America ages, a whole host of “anti-aging” products are being thrust upon them. The fact is, there is no product you can buy that will reverse aging. Many of the products that use “anti-aging” as a marketing refrain are completely bunk. The National Council on Aging says, “Whether it’s fake Botox like the one in Arizona that netted its distributors (who were convicted and jailed in 2006) $1.5 million in barely a year, or completely bogus homeopathic remedies that do absolutely nothing, there is money in the anti-aging business.”
How to Avoid: Practice a healthy dose of skepticism as a consumer. Be aware that advertising plays to our aspirations and our fears, so don’t be manipulated by products that claim to be “anti-aging.”
9. Cemetery, Funeral and Cremation Scams
Most funeral homes do a great job, but some bad apples are taking advantage of families during their time of grief. One common ruse is for the funeral home to cremate a deceased person inside of a fancy casket to add to the expense, when a cardboard casket is more than sufficient for cremation purposes. Often families complain that other completely unnecessary charges are added to the bill without permission.
How to Avoid: It’s hard to make rational business decisions in grief. If there is a calmer, more stoic family member who has good business sense, it may be best for this person to make the funeral arrangements.
10. Counterfeit Prescription Medicines
With prescription drug costs so high in the U.S., many seniors turn to online pharmacies, often based outside America, to pay for their medications. Unfortunately, a large portion of medications coming from outside the United States are counterfeit.
Even prescription drugs from your local pharmacy could be counterfeit. About 40% of U.S. pharmaceuticals originate in India and a New York Times article indicated that up to 12% medications imported from India are bogus.
How to Avoid: The FDA is dramatically increasing regulation on foreign pharmacies which supply drugs to the U.S., and is now holding them to the same standards as American pharmaceutical plants. But if you order your prescriptions from dubious online sources, you are playing with fire. These drugs will not have received the safety validations of drugs dispensed at certified mainstream pharmacies in the U.S. They could be inactive or possibly even poisonous.
When my mother and her sister, my aunt, examined my 88-year-old grandmother’s receipts and banking records as they prepared to move her from her longtime home to an assisted living community they were shocked. “How could anyone take advantage of Mom?” my aunt exclaimed. It was obvious that my grandmother had been the victim of a long series of scams.
My grandmother was vulnerable for many reasons. Early dementia had impaired her memory and decision making skills. When the tire shop in town told her that her tires were worn out and that she had to replace them, she didn’t recall that she bought a new set of tires from the same shop only a few weeks ago and wasn’t able to tell her tires were perfectly fine.
Yes, the friendly, family-owned tire-shop in town was in on it. These scams were perpetrated by regular folk – not seedy looking, comic book bad-guys with shifty eyes, trench-coats and five o’clock shadows.
As a recent widow, my grandmother was vulnerable in other ways. She found herself having to pay for services that her husband traditionally acquired, so didn’t realize it was unusual to pay a “helpful” neighbor $1,000 to clean the roof. My grandmother’s good heart, which dementia could never touch, was possibly her biggest liability. We realized the costliest single incident for my grandmother was a very large “donation” to charity-scammers who called days after the Haiti earthquake in 2010 pretending to be collecting aid for the victims. My grandmother was always a sharp and strong-willed woman, so it was unnerving to recognize how vulnerable she really had become.
To stay on top of the very latest scams hitting seniors, sign up for Scam Alerts from the National Consumer Protection Bureau.
Have you or a loved one been affected by a senior scam? Share your story or your tips about how to avoid these scams in the comments below.