Elder Fraud: What You Need to Know to Protect an Aging Loved One
Elderly people are a favorite target of swindlers and con artists of every kind. According to the National Council on Aging (NCOA), fraud against seniors has become so prevalent, it’s now considered “the crime of the 21st century.” It’s estimated that more than 5 million American seniors are exploited by telephone scammers, internet fraudsters, and even unscrupulous family members every year, at a cost of more than $37 billion annually.
Most Fraud Against the Elderly is Never Reported
Unfortunately, that seemingly astronomical figure only accounts for reported cases of elder fraud. That’s because for every case that is reported, up to 44 others are not. “Those numbers are underreported because many times seniors are so embarrassed,” Anna Maria Chavez, executive vice president and chief growth officer at the NCOA recently told The New York Times. Sometimes, older people aren’t even aware they’ve been the victim of fraud until they start receiving collection or late notices.
“That’s when they discover that their credit card or Social Security number has been stolen,” Chavez said.
Seniors are Easy Targets for Scammers
Con artists and scammers consider older people easy marks. For one thing, there’s an assumption that many seniors have significant amounts of money just sitting around in the bank. Age-related dementia and cognitive decline can also make some people more susceptible to grift. But at least one recent study suggests everyone – even the sharpest among us – becomes more vulnerable to fraud as they age. “We are learning that there are changes in the aging brain, even in the absence of diseases like Alzheimer’s disease or other neurodegenerative illnesses, that may render older adults vulnerable to financial exploitation,” said Mark Lachs, a physician at Weill-Cornell Medicine in New York. Lach and his colleagues have dubbed this phenomenon “Age-Related Financial Vulnerability.” And they consider it a growing public health threat. Other factors, including feelings of social isolation and loneliness that frequently plague seniors living alone, also come into play.
The Top 10 Elderly Scams and Swindles
Fraudsters have come up with countless ways to separate seniors from their money, and they’ve only grown bolder in the internet age.
Some of the most common scams that target the elderly include:
- Medicare/Healthcare Scams: Con artists will pose as Medicare representatives and convince their target to provide personal information that can be used to steal the victim’s identity. Sometimes, a scammer will set up a bogus clinic and use the personal information provided by victims to bill Medicare and pocket the payments.
- Counterfeit Prescription Drugs: These scams usually involve fake internet websites that offer inexpensive prescription drugs. Victims end up purchasing useless medications, or even harmful substances that could actually worsen their health.
- Funeral & Cemetery Scams: Sometimes, a con artist will read obituaries and attend the funerals of complete strangers to take advantage of a grieving spouse or partner by claiming the deceased owed an outstanding debt. Some unscrupulous funeral homes will take advantage of those unfamiliar with the cost of funeral and burial services, and push the victim into purchasing unneeded or unnecessarily expensive products or services.
- Cosmetic Surgery and Anti-Aging Scams: Fake Botox and bogus homeopathic anti-aging “remedies” have proven extremely lucrative for scammers. While a useless anti-aging cream might only hurt the victim’s wallet, a bad batch of Botox cooked up in a renegade lab could actually prove deadly.
- Telemarketing Scams: Seniors are more likely to make purchases and conduct personal business over the phone, and scammers know it. Telephone fraud is notoriously hard to trace, and once a scammer finds an easy mark, there’s a good chance the victim’s name and contact number will be shared with other schemers looking for a quick payoff.
- Internet Fraud/Email & Phishing Scams: A senior receives email messages that appear to be from a legitimate company, institution, or government agency asking them to “update” or “verify” their personal information.
- Investment Schemes: Pyramid schemes, inheritance scams (i.e. the Nigerian Prince scam) and other forms of investment fraud have targeted older people for decades. But the internet has made it far easier for fraudsters to find and entice their victims.
- Homeowner/Reverse Mortgage Scams: Most older people who own a home have paid off their mortgage. Shady home repair companies and other scammers will often try to tap into that equity by pressuring an elderly person to pursue a reverse mortgage or home equity loan.
- Sweepstakes and Lottery Scams: Scammers pressure their victims to make a substantial payment to “unlock” substantial lottery or sweepstakes winnings. The scammer may even issue a fake check that will only bounce after it’s deposited into the victim’s bank account. Meanwhile, the con artist pockets the payment.
- The Grandparent Scam: This scam is particularly heartless, and involves a phone call that begins something like this: “Hi Grandma, do you know who this is?” If the recipient takes the bait, the caller will plead for cash (via a wire transfer) to help with overdue rent or some other financial problem. In most cases, the scammer will beg the grandparent “please don’t tell my parents, they would kill me.”
Know the Warning Signs of Elder Fraud
Financial fraud can leave seniors destitute, and robs the most vulnerable people in society of their feelings of security and self-worth. To protect our elderly loved ones from exploitation, it’s important that family members and caregivers be alert for red-flags and recognize the warning signs of fraud:
- Unusual or unexplained bank account withdrawals, wire transfers. or other financial changes.
- Missing cash or valuables from an elderly person’s home.
- Dramatic shift in investments.
- Abrupt change in wills, trusts, power of attorney of beneficiaries.
- New “best friends”.
- Suspicious signatures on checks or other documents.
- Concern or confusion about missing funds.
- Eviction notices, evidence of unpaid bills, or utilities being discontinued due to nonpayment.
- The elderly person lacks a firm grasp of their own financial situation or is secretive about their finances.
Reporting Elder Fraud
If you think someone you love is being victimized by scammers, you should notify their banks and other financial institutions. Depending on the type and extent of fraud, they many need to close their accounts and open new ones under different account numbers. At the very least, bank employees are in a good position to spot suspicious activity, such as sudden, large withdrawals or use of an ATM card by someone who is housebound. You should also alert law enforcement, including the local police department and the FBI ((202) 324-3000 or online). To learn more about reporting and preventing elder fraud, the National Center on Elder Abuse maintains a State-by-State directory of reporting numbers, government agencies, state laws, state-specific data and statistics, and other resources here.