A Perfect Mark
With the rapid pace of technological innovation and a changing business environment, it is the older generations who have a harder time keeping up with the times. But grandma’s quaint ignorance of what Facebook actually is could mean more than just a chuckle or two during Thanksgiving dinner.
In fact, with more and more ways to get a person’s personal information in today’s digitally-connected world, it is easier and easier for scammers to take advantage of vulnerable seniors who may be used to a more old-fashioned way of doing business.
Older Americans are a target for many reasons: they often have a nest egg of money in the bank, they are often homeowners with good credit, they may be under more regular medical supervision and pay significant amounts for prescription medication; all of these characteristics are irresistible to fraudsters, who will never pass up an easy mark.
Photo Credit: Ruth Ellison
Victimizing the vulnerable
In the interest of protecting senior citizens, the FBI has issued alerts on a number of scams perpetrated against older people, and the AARP has done the same to help educate seniors about the scams that might target them as victims.
Of course, the fact that most scams take place outside of any formal monitored environment, it can be very hard to trace exactly how many people have been affected by certain schemes, but a number of court cases have helped elucidate the criminals’ methods, at least.
Here we look at 10 of the most common scams targeted at older people these days, and what can be done about them.
Photo Credit: Ethan Prater
Senior Scam #1: Health Insurance Fraud
Every U.S. citizen or permanent resident over 65 qualifies for Medicare, so there is rarely any need for a scam artist to research what private health insurance company older people have in order to scam them out of some money. In these types of scams, of which there seem to be endless permutations, perpetrators may pose as a Medicare representative to get older people to give them their personal information, or they will provide bogus services for elderly people at makeshift mobile clinics, then use the personal information they provide to bill Medicare and pocket the money.
When health care reform was dominating the headlines last year, fraud watchdogs in Missouri caught wind of a scam whereby perpetrators visited seniors in retirement homes pretending to be representatives of “ObamaCare” and tricking seniors into paying a fee to be a part of the new “ObamaCare” plan.
Photo Credit: Aaron Fulkerson
Senior Scam #2: Counterfeit Prescription Drugs
Sure, most people get their prescription medication at a licensed pharmacy, but the amount of opportunities scammers have to introduce counterfeit drugs into the supply chain mean that even some real pharmacies may end up unknowingly selling fake drugs. Most commonly, of course, counterfeit drug scams operate on the internet, where seniors increasingly go to find better prices on specialized medications. This scam is growing in popularity, as the FDA has since 2000 investigated an average of 20 such cases per year, up from five a year in the 1990s. The danger, of course, is that besides paying money for something that will not help the medical condition, victims may purchase unsafe substances that can inflict even more harm on an ailing person. This scam can be as hard on the body as it is on the wallet.
Photo Credit: Hobvias Sudoneighm
Senior Scam #3: Funeral and Cemetery Fraud
There are two types of funeral and cemetery fraud perpetrated on seniors that the FBI warns about. In one approach, scammers read obituaries and call or attend the funeral service of a complete stranger to take advantage of the grieving widow or widower. Claiming the deceased had an outstanding debt with them, scammers will try to extort money from relatives to settle the fake debts.
On the other side of the coin are disreputable funeral homes that capitalize on family members’ unfamiliarity with the considerable cost of funeral services to add unnecessary charges to the bill. In one common scam of this type, funeral directors will insist that a casket, usually one of the most expensive parts of funeral services, is necessary even when performing a direct cremation, which can be accomplished with a cardboard casket rather than an expensive display or burial casket.
Photo Credit: Howie Luvzus
Senior Scam #4: Fraudulent “Anti-Aging” Products
In a society bombarded with images of the young and beautiful, it is not surprising that some older people feel the need to conceal their age in order to participate more fully in social circles and in the workplace. After all, 60 is the new 40, right?. It is in this spirit that many older Americans seek out new treatments and medications to maintain a youthful appearance, putting them at risk of scammers.
Whether it be fake Botox like the one in Arizona that netted its distributors (who were convicted and jailed in 2006) $1.5 million in barely a year or completely bogus homeopathic remedies that do absolutely nothing, there is money in the anti-aging business. Botox scams are particularly unsettling, as renegade labs creating versions of the real thing may still be working with the root ingredient, botulism neurotoxin, which is one of the most toxic substances known to science. A bad batch can have health consequences far beyond wrinkles or drooping neck muscles.
Photo Credit: Dr. Braun
Senior Scam #5: Telemarketing Fraud
Perhaps the most common scheme for taking advantage of seniors, scammers use fake telemarketing calls to prey on older people, who as a group make twice as many purchases over the phone than the national average. While the image of the lonely senior citizen with nobody to talk to may have something to do with this, it is far more likely that older people are more familiar with shopping over the phone, and therefore might not be fully aware of the risk. With no face-to-face interaction, and no paper trail, these scams are incredibly hard to trace. Also once a successful deal has been made, the buyer’s name is then shared with similar schemers looking for easy targets, sometimes defrauding the same person repeatedly.
Photo Credit: Jon Phillips
Senior Scam #6: Internet Fraud
If Facebook is any indication, all signs point to older Americans spending more time online than ever before. While using the internet is a great skill at any age, the slower speed of adoption of some older people make them easier targets for the automated internet scams that are ubiquitous on the web and e-mail programs. Popup browser windows simulating virus-scanning software will fool victims into either downloading a fake anti-virus program (at a non-unsubstantial cost) or an actual virus that will open up whatever information is on the user’s computer to scammers. Their unfamiliarity with the less visible aspects of browsing the web (firewalls and built-in virus protection, for example) make seniors especially susceptible to such traps.
Photo Credit: Kevin McGee
Senior Scam #7: Investment Schemes
Because many seniors find themselves planning for retirement and managing their savings once they finish working, a number of investment schemes have been targeted at seniors looking to safeguard their cash for their later years. From pyramid schemes like Bernie Madoff’s (which counted a number of senior citizens among its victims) to fables of a Nigerian prince looking for a partner to claim inheritance money to complex financial products that many economists don’t even understand, investment schemes have long been a successful way to take advantage of older people.
Photo Credit: Alan Cleaver
Senior Scam #8: Homeowner/Reverse Mortgage Scams
Scammers like to take advantage of the fact that many people above a certain age own their homes, a valuable asset that increases the potential dollar value of a certain scam. A particularly elaborate property tax scam in San Diego saw fraudsters send personalized letters to different properties apparently on behalf of the County Assessor’s Office. The letter, made up to look official but displaying only public information, would identify the property’s assessed value and offer the homeowner, for a fee of course, to arrange for a reassessment of the property’s value and therefore the tax burden associated with it.
Closely related, the reverse mortgage scam has mushroomed in recent years. With legitimate reverse mortgages increasing in frequency more than 1,300% between 1999 and 2008, scammers can take advantage of this new popularity. As opposed to official refinancing schemes though, unsecured reverse mortgages can lead the property owner to lose their house has the perpetrators of the fraud offer money, or a free house somewhere else, in exchange for the title to the property.
Photo Credit: Casey Serin
Senior Scam #9: Sweepstakes or Lottery Fraud
This simple scam is one that many are familiar with, and it capitalizes on the notion that some older Americans have that “there’s no such thing as a free lunch”. Here scammers will inform their mark that they have won a lottery or sweepstakes of some kind, and need to make some sort of payment to unlock the supposed prize. Oftentimes a senior 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.
Photo Credit: Pedro Ribeiro Simoes
Senior Scam #10: The Grandparent Scam
The Grandparent Scam is so simple, so devious, and so nefarious in that it uses one of older adults’ most reliable assets, their hearts.
Scammers will place a call to an older person, and when the mark picks up, they will say something along the lines of: “Hi Grandma, do you know who this is?” When the unsuspecting grandparent guesses the name of the grandchild the scammer most sounds like, the scammer has established a fake identity without having done a lick of background research.
Once “in”, the fake grandchild will usually ask for money to solve some unexpected financial problem (overdue rent, payment for car repairs, etc), to be paid via Western Union or MoneyGram, which don’t always require identification to collect. At the same time the scam artist will beg the grandparent “please don’t tell my parents, they would kill me.” While the sums from such a scam are likely to be in the hundreds, the very fact that no research is needed makes this a scam that can be perpetrated over and over at very little cost to the scammer.
Photo Credit: Jessica Merz