By |
To say scams are big money-makers is an understatement.
According to a 2023 study by AARP, a whopping $28.3 billion is lost to elder fraud each year. Though a good chunk of that money is swindled by those that an elderly person knows well – such as a family member siphoning money from bank accounts – another significant portion goes to professional criminals who prey on seniors.1
Protecting senior welfare can sometimes be easy, such as opting for a button alarm or choosing to take your medications on time, every time. But protection from scammers can be more difficult, especially when they have perfected schemes that sound incredibly legitimate.
Why are Seniors Uniquely Vulnerable?
Why do scammers seem to target the elderly more often – and why does it work?
The reason why they target seniors is simple: in many cases, seniors have more money than the average person. A study on wealth and longevity conducted by AARP and Oxford Economics found that 83% of all wealth in the United States is held by those over the age of 50.2 Those who have planned well for retirement are more likely to have funds in their bank accounts that scammers want for themselves.
Why the scams work is a bit more complicated. Some seniors feel lonely and isolated, which can lead to opening up more to a stranger online or over the phone. Some might not have advanced technology awareness and so don’t understand the implications of providing certain information. And some might be in declining cognitive health, which can compromise decisions.
And who doesn’t want to save money? Many scams targeting the elderly will offer something for free. The scammer might say that you are eligible for a free product, but you have to pay shipping and handling. Those “fees” turn out to be exorbitant amounts of money charged to your credit card or pulled from your bank account.
Another common tactic is suggesting you can make a great deal of money with a small investment. Just a few hundred dollars could net you thousands! The thought of that appeals to lots of folks of any age.
The Most Common Scams Right Now
Scams change with the times. For instance, though scams involving fake checks are still out there, the rise of online banking has changed the game. Now it’s more likely that someone wants your banking information over the phone rather than sending you a fraudulent check through the mail.
But while the specifics of the scam might have changed, the dark spirit of theft remains the same. Here are some of the common financial scams you need to know about right now.
Supposed Issues with Medicare or Medicaid
Not long ago, the number on your Medicare or Medicaid card was your social security number. You can probably imagine the problems that might cause.
In 2019, Medicare changed the cards to a random number, but that didn’t stop the scammers. They can still do all sorts of things with that number, from fraudulent claims to double billing to identity theft. The most common scam is conducted via phone, but some fraudsters might send official-looking forms in the mail.
If someone calls you and requests your card number for activation purposes, be aware that’s a scam. If they ask for personal information so they can send you a new card, that’s a scam too.
According to Medicare.gov, Medicare will never call to sell you anything, and no one will ever visit your home. Your interactions with Medicare will usually be during open enrollment, when you call them first, or when you have reported an issue and they are following up with you.3
If you receive forms in the mail that you were not expecting, contact Medicare to ensure that those forms are legitimate and get more detailed instructions on what to do with them.
There’s Something Wrong with Your Computer
These scams often happen as you are using your computer, laptop, or tablet. The most common form is a pop-up warning saying that your computer has been compromised and your personal information is at risk. By clicking a certain link, you can get rid of the virus or other dangers lurking on your computer.
But that link is the scam, and if you click it, your computer will be vulnerable to whoever sent that link to you. They can then find your personal information (like credit card or banking info) and use it for nefarious purposes.
In some cases, you will get a call from a “monitoring service” telling you that there is something wrong with your computer or phone. They will ask you for money to fix the problem. That usually means giving them detailed credit card or banking information. Of course, the problem is non-existent, and they just made off with your money.
Never click on any pop-up warning that appears on your computer. Links might also come via email; don’t click any links and instead, delete the email immediately. If the pop-ups keep coming, stop what you’re doing and talk to a computer expert of your own choosing for help.
That Check Was a Mistake…
Though this scam is not as popular as it used to be, it’s still out there and still taking money from millions of people each year. Someone might say that you’ve won a prize of some sort and you will receive a check in the mail. When you receive the check, it looks entirely legitimate, but it’s for an amount that is more than you were promised. The scammer says that it’s a mistake and asks you to deposit the check anyway and then send the excess money back to them. But then it turns out that the original check was fake all along.
Sometimes scammers will skip the prize idea and go straight to something more reliable, such as paying you for something you sold online. For instance, if you sold a nice picture frame on an online site for $50, they might send you a check for $200, claim it was a mistake, and ask you to send back $150.
If you ever receive a check and someone asks for money back from that check, it’s a scam. Never cash that check. Instead, gather all the information you can about the person trying to scam you and talk to your bank or local authorities about what to do next.
Lottery Scams
Who doesn’t love the thrill of winning something? Lottery scams work by getting you excited about the possibilities – so excited, in fact, that you might be willing to pay a fee for shipping, customs, taxes, or more. That’s what scammers are counting on.
Lottery scams involve a call, email, or letter saying that you have won something big, and all you have to do is pay a small fee to get it to you. They ask for your credit card information or bank account numbers. They might even request your social security number for “tax reporting purposes.”
Remember that when you play the lottery, you are the one to initiate the transaction. No legitimate lottery or sweepstakes will contact you directly and ask you for money upfront to get your prize. If you are curious about something you’ve received concerning a lottery, contact your state lottery commission or local government representative to ask if it’s legitimate.
Charity Scams
There are many in need around the world, especially in areas where natural or manmade disasters are occurring. During times of crisis, charities step in to help those who need it the most. Unfortunately, scammers often hide behind the guise of a charity to extract as much money as possible from well-meaning individuals who just want to help others.
If you receive a request from a charity or notice a charity online that sounds like a good fit for giving, take the time to do your research. If you can’t find anything on Charity Navigator or the Better Business Bureau, you are likely dealing with a scammer.
Keep in mind that sometimes scammers will use a legitimate charity as their cover but when you click a link, you are sent to a fake website that is set up only to capture your banking or credit card information. To avoid this problem, type in the name of the legitimate charity into the address bar and go directly to the site. You can then donate through a secure server and know that your money is going where you want it to go.
The “Too Good to be True” Investment
A good, solid investment is a strong way to build your retirement funds. Scammers know this and prey on those who are a little behind on their retirement planning. They might offer investments that have a very impressive return – but you have to act right now to get in on the good deal.
They might offer guarantees that you will make a certain amount of money back from your investment within a certain period of time, such as six months or a year. This is often the case with cryptocurrency scams targeting the elderly, which have increased by a whopping 350% in the last year alone.4
One of the telltale signs of this scam is the urgency. The scammer will say there is absolutely no time to waste! You must act right now or you will lose out! That’s because they don’t want you to slow down and think about the money you might lose, and they certainly don’t want you to check out their credentials and find that they’re entirely fake.
Remember, a true investment professional will simply lay out the pros and cons of your potential investment and let you make the decision on your own time. They will also never guarantee any sort of return on the investment, as there is always risk involved and no one can predict how things will go.
Helping Out the Grandkids
This is a heartbreaking tactic that can ensnare even those who are quite confident in avoiding scams.
This scam works by someone calling you, posing as a grandchild or other cherished family member, and saying that they are in trouble and they need money – right now. They will explain it all later, but time is of the essence, so they need you to wire money to them right away.
This scam tugs at the heartstrings and can easily send you running to the nearest Western Union to send the money they need. But before you rush to do this, take some time to think it through. Ask questions that only your grandchild would know, like the name of their childhood hamster or their sister’s middle name. Pay attention to small details. For instance, if they request secrecy because they don’t want “mom and dad” to find out but you know that their father died years ago, the person on the phone is obviously not your grandchild.
Speaking of secrecy, that’s almost always a sure sign of a scammer. Forget the secrecy request and call other family members. They can help you determine if it’s a scam or not. You can also hang up the phone and call your grandchild or their parents to ask if it was really them who called you.
How to Avoid Financial Scams
There are several ways to help ensure that your money stays as safe as possible. These tips can help:
· Hang up and call. If someone is calling from a legitimate company or organization, you can reach out to them directly to be certain. For instance, if someone claims to be from your bank, hang up and then call the bank directly on a number you know is legitimate.
· Verify credentials. Whether an investment banker or charity, make sure you can verify the person calling you is legitimate.
· Never be rushed. If time is of the essence, it’s likely a scam. Never rush into anything and don’t pay attention to “act now or lose this opportunity” sort of threats.
· Talk to someone you trust. Share your experience with someone and ask what they think.
· Never give out personal information. Social security, Medicare, and banking account numbers should all be held in confidence. Never provide them to anyone over the phone.
· Never wire money to someone you don’t know well. Once the money is wired, it’s gone. Make sure that if you are wiring money to anyone, it’s someone you know well. You want to be able to verify where the money goes.
· Keep social media private. Allow only friends and family to see your social media accounts. This helps prevent strangers from gathering information about you that they can then use to scam you.
· Block unknown callers. This can cut down dramatically on the spam calls you receive and can protect you from countless scams.
Finally, report any incidents right away. Gather all the information you can and contact the Federal Trade Commission to file a report.
If you do discover you have fallen victim to a scam, look at what has been compromised and act accordingly. For instance, if you gave out your social security number, contact the Social Security Administration and the three credit bureaus. Contact your bank if you gave out your banking information or your credit card company if you are being charged for things you didn’t order or receive. Alert1 wishes all seniors safety and protection!
