Fighting Financial Scams Against the Elderly

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Over the past few years there has been an alarming increase in financial fraud aimed specifically at the elderly. While some of the scams could have easily been spotted, the level of sophistication of some of them is truly disturbing.

Since many cases of financial scams go unreported or can be difficult to prosecute, they’re considered “low-risk” to criminals. However, some of the losses incurred by older victims can be devastating, leaving them in a very vulnerable position with little chance to recover their losses.

Seniors make easy targets for financial abuse according to a study by the American Association of Retired Persons (AARP), because older generations expect that people will be honest with them out in the marketplace. They also are they less likely to take action when swindled, and tend to be less knowledgeable about their rights in an increasingly complex world. And because the elderly are more likely to be home during the day, they are often within easy reach of unscrupulous door-to-door solicitors and deceitful telemarketers.

Scammers target seniors that they perceive to be vulnerable—those that are isolated, lonely, physically or mentally disabled, unfamiliar with handling their own finances, or have recently lost a spouse. Sadly, it’s not always strangers who are perpetuating these financial crimes. It’s often committed by family members, often by their adult children, grandchildren, nieces and nephews.

Below, we have listed a few of the more frequent scams that have been reported.

1) Funeral Fraud: Law enforcement officials warns about scammers who monitor obituaries and then call the grieving widow or widower and claim that the deceased had an outstanding debt that needs to be paid. Many times they will provide official looking statements with instructions that the balance needs to be paid immediately in full to avoid going to a collection agency.

2) Medicare Fraud: There are several types of Medicare scams. One involves someone posing as a Medicare representative, telling the victim that they need to update their information, tricking them into providing personal financial information as well as their physicians’ names. The information can then sold to other criminals or used to commit subsequent scam. One version is to contact the victim and tell them they are from their physician’s office and that an outstanding balance has to be paid immediately before another appointment can be scheduled.

3) Charity Scams: Scammers will contact seniors to solicit donations for fake charities. Many of these scams are done right after natural disasters or during the holidays. To add legitimacy, many times the names used may sound very similar to actual charities, such as “Red Crosses”. Other times they will use names to elicit an emotional response such as “Feed the Starving Children”.

4) IRS Scams: In this scam, perpetrators will call saying they are from the IRS collection department. They will ask the victim why they have ignored the several letters that the IRS has sent regarding an outstanding balance (no letters were actually sent). When the victim states that they don’t recall ever receiving any letters, the scammer will typically sound suspicious, and state that they need to immediately pay the full balance to avoid legal prosecution and additional penalties.

5) Sweepstakes Winner: This is an old one, but very effective. Here the scammer informs the victim that they have won a sweepstakes of some kind. Many times the amount is not too exorbitant so as to be more plausible. For example, the victim is told that they have won $100,000, but IRS requires that 10% has to be paid for taxes in advance before the prize can be released. If the victim refuses to pay the $10,000, the scammer will offer to “forward” the $10,000 in advance to pay the taxes – the balance of the $90,000 will then be sent after the taxes are paid. The scammer will then send a fake check for $10,000 that can deposited into the victims bank account, with instructions that they have to send a bank check for the full amount owed in taxes within 24 hours. After receiving the initial check the victim is more willing to follow the instructions.

Elder financial abuse scammers can be tough to catch. Many scammers have paperwork that appears to give them legal authority to act—including powers of attorney, authorizing signature cards, and vehicle pink slips. Some work at a bank or other financial institution and have intricate ways of hiding their tracks by manipulating electronic records and such.

Where to Report Suspected Abuse
There are a number of organizations devoted to investigating suspected financial abuse and helping to find and stop these scammers. Below are a few ways to take action.

Alert bank officials: Notifying the bank tellers and officers who commonly handle the senior’s accounts may be enough to stop the misconduct, depending on the scope of financial abuse involved. Bank employees are often keenly aware of suspicious activity, such as a sudden withdrawal of large sums of money or use of an ATM card by a senior who is housebound.

Federal law requires financial institutions to file a Suspicious Activity Report with the federal government when they suspect elder financial abuse, as well as most states have laws that encourage or require bank officials to report suspected abuse.

Get help from a senior services group: The Eldercare Locator (800-677-1116), directs callers to local programs and services that help prevent financial elder abuse. And INFO LINK (800-394-2255), helps arrange and coordinate assistance with those that have been victims of a crime.

Contact Adult Protective Services (APS): APS is the government-affiliated agency who investigates reports of elder financial abuse and offers assistance to victims. Visit the National Center on Elder Abuse’s website at www.ncea.aoa.gov (click on “Resources” on the top menu, then “State Resources” to the left), to find your local APS office.

Alert law enforcement: The police will often intervene when there is good evidence that a crime is being committed.

If you suspect you’ve been the victim of a scam don’t be afraid or embarrassed to talk about it with your family or someone you trust. You’re not the only one. Doing nothing could only make the situation worse. If you have elderly parents, make sure you are having conversation with them regarding the types of scams they should be aware of, and pay attention to any spending that seems unusual. If you ever have a question or concern, we are here to help.