Each year, thousands of seniors fall victim to financial scams perpetrated by criminals who specifically target older demographics. Individuals 65 years of age and older are often seen as more vulnerable and trusting, which is music to a criminal’s ears.
The most effective way to protect yourself and your loved ones from being taken advantage of is to become familiar with the most prevalent senior scams, and learn the best strategies to avoid them. Armed with this knowledge, you can help prevent the emotional, psychological and financial burdens associated with these deceptions—especially if you’re aging in place.
And keep in mind: if you’ve fallen victim to one of these scams, do not be embarrassed or feel as though you’ll be judged as incapable of maintaining your independence. Criminals are getting craftier and better at appearing authentic, and people of all ages are falling into their traps. The important thing is that you stop the scam, report it and educate yourself on how to avoid becoming victimized again.
In this article we’ll discuss the five most common scams seniors encounter and how they can be avoided.
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The Grandparent/Grandchild Scam
In this frequently encountered con, a senior receives a phone call from an individual pretending to be a grandchild who has been arrested abroad and needs to have bail money wired to him.
WHAT TO DO:
Before transferring funds, call other family members to confirm the situation. The real grandchild may not have ever even visited the location where the caller claims he is.
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The Lottery/Sweepstakes Scam
Another popular trick starts with a phone call or email informing the senior they have won a sweepstakes or overseas lottery. However, the “contest official” then says there is an up-front payment required to cover taxes or fees before the winnings can be disbursed.
WHAT TO DO:
End the conversation immediately, and then contact the National Adult Protective Services Association (NAPSA) to report the incident. No authorized sweepstakes requires payment directly to the organization in order to receive the prize.
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Unsolicited Home Repairs
In this scenario, the scammer visits a senior’s house and offers home repair services. In reality, their goal is to secure payment for future work which is either done improperly or never completed at all.
WHAT TO DO:
Licensed contractors don’t usually solicit door-to-door, and you should never allow anyone to work on your home until you’ve thoroughly researched their company and checked their references. Ask them to leave their business card (in case they are being honest), but don’t agree to anything.
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Investment Fraud
Since they often have a large nest egg and are planning their retirement, seniors are prime targets for investment scams. The scammer tells the retiree about an exciting investment opportunity with little or no risk and substantial returns, but in fact, any funds they invest will go straight into the pockets of the crook.
WHAT TO DO:
Always discuss investments with someone you trust: a friend, family member or reliable professional who helps seniors safely age in place. You can also contact the Financial Industry Regulatory Authority’s (FINRA) Securities Helpline for Seniors for additional assistance. if it’s too good to be true, it probably is.
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Bogus Call from the IRS
This fear-based ripoff begins with a caller purporting to be from the IRS or another government agency. The con artist tells the senior they have unpaid taxes or outstanding bills and threatens that if they don’t pay immediately, they face suspension of their driver’s license, arrest or even deportation. Falling victim to this scam could consume your retirement finances.
WHAT TO DO:
Most government agencies (and definitely the IRS) send correspondence via postal mail; they never request information over the phone or by email. Additionally, these scammers tend to be aggressive and pushy—which a government official should not be—so feel free to hang up or delete the email.
Finally, here are a few quick tips for avoiding common senior scams:
- Don’t give your personal information to anyone via a phone call or email unless you initiated the call or conversation.
- Never pay in advance for services.
- Always take your time with decisions—anyone who tries to strong-arm you into an immediate commitment is likely trying to scam you.
- Add your number to the National Do Not Call Registry: 1-888-382-1222 (TTY: 1-866-290-4236).
It’s important to know that scammers are especially quick to take advantage of older individuals who are disconnected from others.
If your loved one is a senior, one of the best ways to protect them is to be as involved as possible in their lives. Speak with them often, especially about their finances. If you are a senior, don’t be embarrassed to ask for help if you’re uncertain about a situation. Open communication is a strong tool to fight con artists.
If you’re interested in learning more about how to maintain independence and quality of life by aging in place, sign up for a free, no-obligation Discovery Seminar.
