Fraud targeting senior citizens is a growing concern. According to a June 2010 survey by Investor Protection Trust, more than 7.3 million senior citizens—roughly 20 percent of Americans aged 65 or older– have “been taken advantage of financially in terms of an inappropriate investment, unreasonably high fees for financial services, or outright fraud.” The Better Business Bureau of Minnesota and North Dakota (BBB) encourages families to keep the lines of communication open with their elders regarding finances and to recognize some common cons targeting senior citizens.
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“Having a serious conversation with your elderly parents about how they are managing their money is not easy, but it is extremely important in order to help protect them from unscrupulous crooks,” said Dana Badgerow, president and CEO of the BBB. “It’s important to keep in contact so that you can identify suspicious spending habits, as well as educate your elder family members on recognizing the red flags of common cons.”
The BBB warns against the following five scams that commonly target senior citizens:
Sweepstakes and Lottery Scams –Typically, the victim receives a letter in the mail stating they have won a lottery or sweepstakes; it might even claim to be from Publisher’s Clearing House or Reader’s Digest. The letter instructs the victim to deposit an enclosed check and then wire a portion back to the company to cover taxes or administration fees. While the funds will initially show up in the bank account, the money will be removed when the bank determines the check is a fake. The victim is out whatever funds they wired back to the scammers — often amounting to thousands of dollars.
• BBB Advice: Never wire money to someone you don’t know. You should never have to send money to receive any winnings from a lottery or sweepstakes.
Medicare Scams – Navigating the Medicare system isn’t easy and some scammers will look for any opportunity to take advantage of the confusion. Commonly, a scammer will claim to be with Medicare and ask for personal information such as Medicare, Medicaid, Social Security, credit card or bank account numbers. The victim might be given any number of excuses to provide this information including an error needs to be fixed, that he or she is part of a survey or eligible to receive free products or can sign up for a new prescription drug plan.
• BBB Advice: Remind your elderly family members that Medicare will never call to ask for sensitive personal financial information. If you suspect fraud contact your local police or the Health and Human Services Office of Inspector General at 800-HHS-TIPS.
Bereavement Scams – Scammers will often try to take advantage of the increased vulnerability of senior citizens who have recently lost a loved one, such as a spouse. In one recent example, a mother and daughter team in Ohio would find targets by scouring the obituaries. They would then call the widow or widower and claim that their spouse had outstanding debts that needed to be paid immediately. Victims would then provide a blank check or credit card.
• BBB Advice: Offer to assist elderly family members if they have recently lost a loved one and are inexperienced in managing finances. If you are uncertain about owing a debt when collectors call, ask for written confirmation.
Deceptive Professionals – While many scammers operate anonymously, some will be invited in the front door including technicians, contractors, chimney sweeps, air duct cleaners and other services. While most professionals in these industries are reputable, some will lie about the extent of the problem or claim dangerous defects exist and then inflate prices for unsuspecting senior customers.
• BBB Advice – Find professionals you can trust by visiting www.bbb.org/us/bbb-accredited-businesses. Always research a company with the BBB before you hand over any money and report any deceptive services to your BBB, local law enforcement and the state Attorney General.
Investment and Work-at-Home Opportunities – Promises of easy money often target older adults because they may be looking to supplement their income. The pitch might come in the form of an investment opportunity that promises big returns, or as a way to make money at home for an upfront cost. Regardless of the specifics, the victim is offered what sounds like a great opportunity but the extra income never materializes.
• BBB Advice: Always research any work-at-home opportunity with the BBB. Beware of investment or money-making offers that seem too good to be true or use high pressure sales tactics to get you to sign up immediately.
For more advice on avoiding scams and fraud visit: www.bbb.org/us/consumer-tips-scams/
The mission of the Better Business Bureau is to promote, through self-regulation, the highest standards of business ethics and conduct; and to instill public confidence in responsible businesses through programs of education and action that inform, protect and assist the general public. Our hours of operation are 8 a.m. to 5 p.m. Monday through Friday. Contact the BBB at www.bbb.org or 651-699-1111, toll-free at 1-800-646-6222.