Top Ten Financial Scams Targeting Seniors
Marjorie Jones trusted the man who called to tell her she’d won a sweepstakes prize, saying she could collect the winnings once she paid the taxes and fees. After she wired the first payment, the caller kept adding conditions to convince her to send more money. As the scheme progressed, Jones, who was legally blind and lived alone, depleted her savings, took out a reverse mortgage, and cashed in her life insurance policy. She eventually took her own life, leaving only $69 in the bank and three bags of wire transfer receipts.
It is estimated that 5 million older Americans are exploited every year by scams like this, losing as much as $36.5 billion a year. Unfortunately, because the 65 and over population will nearly double in the next four decades, this problem is only going to get worse. This article is intended to educate our readers on what to look out for so that they and their loved ones do not fall victim to financial scams.
- Government Imposter Scam – with this scam, fraudsters call unsuspecting victims and pretend to be from a government agency such as the IRS, Social Security Administration, or Medicare. They will threaten arrest or deportation on account of unpaid taxes, or they may threaten to cut off your benefits unless you provide personal identifying information. This scam can be very hard to detect, because the scammers will often “spoof” the actual phone numbers of the government agency or call from the same area code.
- Grandparent Scam – these scams start with an unexpected call from a “grandchild” where they will ask, “Hi Grandma, do you know who this is?” When the unsuspecting grandparent guesses the name of one of their grandchildren, the scammer then has a fake identity without having to do any background research. The fake grandchild will then ask for money for some financial problem like overdue rent, car repairs, etc., and ask that they be paid in gift cards or money transfers, which are almost impossible to get back.
- Medicare/Health Insurance Scams – in these types of scams, perpetrators will pose as a Medicare representative to get the victim to reveal their personal information, or they will provide fake services for elderly people at makeshift mobile clinics, then bill Medicare and pocket the money.
- Computer Tech Support Scams – With this scam, a pop-up message or blank screen will appear on a computer or smartphone, telling the victim that their device is compromised and needs fixing. When the support number is called, the scammer may either request remote access to the victim’s computer or request a fee to have it repaired.
- Sweepstakes Scams – Here, as in the case involving Marjorie Jones, the scammers inform their victim that they have won a lottery or sweepstakes and need to make some sort of payment to receive the prize.
- Robocalls – “Robocallers” use a variety of tactics, including claiming that your car warranty is expiring and asking for payment to renew it; and the “Can you hear me?” call that records the victim’s voice when they answer the question so it can be used as a voice signature for charges on stolen credit cards.
- Romance Scams – here, scammers create fake profiles, often on social media, and exploit seniors by pretending to be overseas and requesting money to pay for visas, medical emergencies, or travel expenses to visit the U.S.
- Internet and Email Scams – Pop-up browser windows that simulate virus-scanning software will trick victims into either downloading fake anti-virus programs or an actual virus that will be able to access all personal information stored on the victim’s computer. Phishing emails and text messages look like they come from somewhere familiar, and they request that you enter your personal information.
- Elder Financial Abuse – this type of financial exploitation is done by someone the senior knows, such as a family member, friend, power of attorney, or caregiver. Seniors who have a disability or cognitive impairment are more particularly at risk because these trusted individuals may threaten to withhold needed care in order to retain control over the person and their assets.
- Charity Scams – These scammers will use a name that is very similar to a legitimate charity and/or capitalize on current events like natural disasters and they will ask for donations in suspicious payment methods like gift cards and money transfers.
We can all easily fall victim to some of these clever scams if we do not have our guards up. Hopefully by being made aware of some the techniques that fraudsters use to steal money from seniors, you and your loved ones will be armed with enough information to detect a scam before it happens.
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Jennifer S. Rossettini
Jennifer Rossettini is a Shareholder of Hook Law where she focuses her practice in the areas of elder law, estate planning, estate and trust administration, and financial planning. Her practice includes complex estate planning for clients with a net worth over $5 million as well as simple plans for individuals with very limited assets. Ms. Rossettini rejoined the firm in 2018 after spending ten years as a CERTIFIED FINANCIAL PLANNER™ professional with the wealth management divisions of two regional financial institutions. She is a member of the Financial Planning Association, serving as Secretary for the Hampton Roads chapter and serves on the Board of Directors of the non-profit organization, PrimePlus Senior Centers. Jennifer lives in Virginia Beach with her husband and two daughters. She is active in the Girl Scout organization, serving as both a troop leader and as the treasurer for the local Service Unit.
Practice Areas
- Elder Law
- Estate & Trust Administration
- Estate Planning
- Financial Planning
