Category: Retirement Planning
Posted: July 2017
Elder financial abuse is a growing concern as our population ages. It is estimated that 25% of the people living in North America in 2031 will be over 65 years of age, and that this group will control 70% of the wealth. Elders are particularly susceptible to exploitation of their financial resources by family members, care providers, telephone scammers and other schemes
Here are the top 10 financial scams, identified by the National Council on Aging, that target seniors.
Medicare and health insurance scams. Scam artists may approach elders posing as Medicare representatives in order to obtain personal information. They may also provide bogus services at makeshift mobile clinics. This allows scammers to collect personal information, bill Medicare and pocket the money.
Counterfeit prescription drugs. Counterfeit drug scams usually operate on the Internet, where seniors increasingly search for better prices on specialized medications. The danger is that, besides paying money for something that won’t help a medical condition, victims may purchase unsafe substances that inflict even more harm.
Funeral and cemetery scams.
Scammers read obituaries and call or attend the funeral service of a complete stranger to take advantage of the grieving widow or widower. These scammers may try to extort money from relatives to settle supposed debts the deceased had with them.
Disreputable funeral homes may also take the opportunity to add unnecessary charges to the bill. In one common scam, funeral directors will insist that a casket, usually one of the most expensive parts of funeral services, is necessary even when performing a direct cremation. This, however, can actually be accomplished with a cardboard casket rather than an expensive display or burial casket.
Fraudulent anti-aging products. There is money in the anti-aging business. Many seniors wish to look younger and feel better, and Botox may seem like the best idea! Unfortunately, many of these bogus treatments, along with other “remedies,” not only do nothing, but may end up causing more health problems in the long run.
Telemarketing scams. These schemes are the most common that elders face. They are impersonal and leave no paper trail. The caller will pretend to represent a charity or offer to split a large amount of “found” money with the elder. They may claim to work for a bank or the IRS. All are looking for personal information that can be used to perpetrate other frauds.
Internet fraud. Internet users of every age are targets for automated internet scams. Common schemes include fake anti-virus programs and emails that appear to be from legitimate companies or institutions, asking the recipient to “update” or “verify” their personal information. Elders are more likely to be naïve about these attempts to obtain personal information or insert viruses into computers.
Investment schemes. Because many 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. The promise of better returns is the most common technique used to defraud seniors.
Homeowner/reverse mortgage scams. Scammers like to take advantage of the fact that many people above a certain age own their homes. These valuable assets increase the potential dollar value of certain scams. Scams may include offers to help seniors reduce property taxes for a fee, or pressure to relinquish titles for cash or other property that doesn’t materialize.
Sweepstakes and lottery scams. This simple scam is one that many are familiar with, and it capitalizes on the notion that “there’s no such thing as a free lunch.” Here, scammers inform their mark that they have won a lottery or sweepstakes of some kind and need to make a payment to unlock the prize.
The grandparent scam. The grandparent scam is so simple and devious because it targets one of older adults’ most reliable assets, their hearts. Scammers will ask the elder to guess which grandchild is on the phone, tricking the elder into revealing the true names of their grandchildren. The scammer will pretend to have financial needs or an emergency, asking for funds to be paid via Western Union or MoneyGram, which don’t always require identification to collect. The scam artist may also beg the grandparent, “Please don’t tell my parents! They would kill me.”
Indications of financial abuse can include unpaid bills, lifestyle changes, accrual of debts, sale or change of title of a home or other assets, unexplained transfers of funds, and changes in withdrawal amounts. Many of these may also be associated with other factors, including dementia. However, it is important to follow up on these changes to protect the elder or any vulnerable individual. It is the task of those with financial expertise to educate and inform elders and their family members about these frauds and the red flags that help to identify elder abuse. Please contact us at Mierendorf & Co., P.C. for assistance.
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