Financial scams targeting older adults have become so common and widespread that they’re called “the crime of the 21st century.” Why? Because Baby Boomers and the Silent Generation control 75% of the U.S. wealth. Scamming seniors is a multi-billion dollar business for people that drains older adults of their retirement funds, valuable assets, and government benefits. Not only does it rip seniors of their financial security, but it can have irreparable emotional damage as well leaving the person who was scammed feeling more isolated, ashamed, and alone than before.
Unfortunately, the reason why these scams are successful are because con artists know seniors are at a time in their life where they’re more emotionally and financially vulnerable than ever. Older adults often have a hard time keeping up with technology and con artists prey upon their trusting nature and naivety. By knowing the most common scams targeting seniors you can protect yourself or your loved ones.
Have you ever been affected by any of these scams? Let us know in the comments below.
Bogus Covid-19-related products, cures and services
Although Covid-19 hasn’t been around for very long, scammers wasted no time in using it as a new way to con seniors out of money. Because the elderly are more at risk of being infected by the disease it’s understandable they would be willing to buy new products or services that could help them stay safe and protected. More than 3,600 complaints of Covid-19 scams had come into the FBI’s Internet Crime Complaint Center through April 21, according to the U.S. Department of Justice.
Several text and phone scams have been falsely advertising products that claim to prevent or cure the disease, including fake drugs, vaccines, and devices. Some of these scams encourage seniors to “stock up” on these products while preying on their fear of a “shortage.” Fake gift-card emails are sent to older adults offering a “financial reward” for people for following public health guidelines. Other scams offer services like in-home HVAC cleaning that falsely claim to protect people from contracting Covid-19.
Keep in mind only health care providers are performing Covid-19 tests, and no vaccine or recommended treatments for the pathogen currently exists, per the federal Centers for Disease Control and Prevention (CDC).
The grandparent scam
The grandparent scam is one of the most common scams because of how simple it is to emotionally manipulative vulnerable adults who have a big heart and want to help out a younger relative. With this scam, you get a call or an email unexpectedly from someone who claims to be a friend or someone you’re related to—this often happens to grandparents with the caller claiming to be their grandson or granddaughter. Playing on the person’s emotions, they often say the grandparent is the only person trusted enough to call for help and not to tell anyone about this.
Once the caller is “in” and has established trust with the older adult, the fake grandchild will typically ask for a big sum of money to solve some unexpected financial problem (they just got arrested and need bail money, their rent is late, etc). They’ll say that out of urgency the money can be paid via Western Union or MoneyGram, a service that doesn’t always require identification to collect money or they often use phony IDs, so it’s impossible to trace them.According to the Federal Trade Commission (FTC) who’s tracked more than 15,000 complaints, the amount of cash stolen per episode is much higher than the average scam and ranges at about $9,000.
IRS impersonators frequently call older adults and accuse them of owing back taxes and penalties. They threaten them with everything from home foreclosure to arrest, deportation, or garnishment of their social security payments unless the “debt” is paid immediately. They rely on the fact that many people are unaware that the IRS never makes unsolicited calls and will never ask you for personal information such as social security or checking account numbers. They will never demand payment over the phone. In response to the upswing in fake IRS callers, the IRS released guidelines to assist taxpayers in identifying and avoiding fraudulent IRS scams.
Sweepstakes & lottery scams
This is one common scam targeting seniors that most of us have heard of before. In this scam, the con artist will tell the senior that they’ve just won a lottery or sweepstakes of some kind and need to make some sort of payment to unlock the supposed amazing prize that’s waiting for them.
Often, seniors will be sent a check that they can deposit in their bank account, knowing that while it shows up in their account immediately, it will take a few days before the (fake) check is rejected. During that time, the criminals will quickly collect money for supposed fees or taxes on the prize, which they pocket while the victim has the “prize money” removed from his or her account as soon as the check bounces.
Funeral and cemetery scams
Scammers scour the obituaries or funeral home websites and reach out to survivors right before, during or right after the funeral to inform the bereaved family that the deceased owes a debt that was overdue at his/her death and needs to be repaid post haste to prevent besmirching the deceased’s reputation. The scammer plays on the grief of the bereaved family while seemingly being sympathetic.
Another situation that can happen is that disreputable funeral homes will take advantage of grieving families who are unfamiliar with the details around funeral costs, adding on unnecessary or fraudulent extras to the bill. They play on the grief of the bereaved family by reassuring them that they want the absolute best for their loved one, including a very expensive casket for a cremation when only a cardboard box is required.
Homeowners/reverse mortgage scams
This encompasses two distinct scams. The first involves a con artist who poses as a tax official offering to reassess the senior’s property for tax purposes. The scam is predicated on the notion that the senior’s tax debt would be lowered. The con artist charges a fee for this “reassessment,” which is fraudulent.
The second revolves around pressuring seniors to obtain a reverse mortgage to access the equity in their home. Typically, scammers are lurking to perform “necessary home repairs” to take advantage of the windfall of cash the senior receives from the reverse mortgage. Since real estate generally encompasses a large portion of a senior’s wealth, obtaining a reverse mortgage may effectively deplete their largest asset.
If you or a loved one has been the victim of a scam targeting seniors, it’s important to file a police report with your local police department. Make sure to look over credit card and bank statements to check for any suspicious activity. Remember, staying educated and informed is the best way to protect against elder fraud and financial abuse.