Con games are nothing new. When the target is a senior, the stakes have never been higher. Senior scams are costing older adults their life savings, their homes and even their lives. There has been a significant increase in the number of cases in which elderly scam artists have taken advantage of older investors, according to a Wall Street Journal report.
“That’s a definite new trend,” said Denise Voigt Crawford, the Texas securities commissioner. “We’re seeing more cases of older people ripping off other older people.” The Wall Street Journal recaps several cases in which older financial planners allegedly took advantage of fellow senior citizens. Reporters Jason Zweig and Mary Pilon quoted psychologist Mara Mather of the University of California, Santa Cruz, as saying older adults seek less data than younger persons when making complex decisions, and they go out of their way to avoid negative information.
What makes seniors so vulnerable? According to research by the Consumer Fraud Research Group and the National Association of Securities Dealers, physical and psychological needs are at the heart of this issue. Seniors may worry that they will outlive their money and are looking for ways to improve their financial position.
The top five senior scams are:
Prizes and Sweepstakes scams: Being told they have won a sweepstakes and asked to send a check to cover the taxes.
Home Improvement Frauds: Criminals knock on their door, offer to do repairs, ask for payment to buy materials, then disappear.
Phishing Schemes: A scammer calls claiming to represent a bank stating their account has been compromised and asking to verify their account number.
Internet Fraud: Seniors may unwittingly give their credit card number to a scammer.
Identity Theft: Giving out their birth date and Social Security number can open their entire identity and history to a thief.
What can you do to protect seniors?
Watch for unusual activity, i.e. changes in lifestyle or unusual financial activity
Be on guard for individuals who have befriended your loved one. Ask to talk to their new friend.
Investigate organizations looking for money. Request written information on the organization.
Assist loved ones with their finances. This may involve becoming financial power of attorney.
Destroy/shred information that could be compromised, i.e. financial information, applications, credit cards.
Seek a second set of eyes. Help them build a support network which could be neighbors, friends or professional caregivers who can help spot scams. The website CaregiverStress.com offers a “Helping Seniors with Finances” video providing ideas on how to begin and offering resources.
