I would suspect that everyone reading this column today has either been a victim of fraud or knows a person who has been a victim. As technology continues to evolve so does the creativity of the 21st century criminal mind and in many cases the ease in which they are able to swindle their victim is amazing.
Each year the FBI and the Federal Trade Commission (FTC) publishes the top senior scams from reports around the country. What is so disheartening is that over the last several years I’ve written numerous columns about senior scams and every year the same ones reappear in the top spots. I’ve had several clients call me this year and say those dreaded words, “Fred, I’ve been scammed”. Sadly, there was no recourse for any of them as the scammers had already cashed the checks and vanished before they even realized they were victims of a fraud.
Here are the top six scams for 2012:
1. Telemarketing via Internet, phones and mail. Scammers might send out email on bank letterhead that says there is a problem with the account and asks the senior to update information, password and number.
2. Fake charities. This type of scam may involve a call from a charity that tells you they are supporting a reputable organization and asks you to make a donation. What they don’t tell you is that they are not authorized to be fundraising for that organization. While as little as 3 percent of your donation may go to that organization, 97 percent may stay in their pocket.
3. Sweepstakes. Many times people will get an official-looking check in the mail. The account number is fraudulent, but the routing number is correct so the bank reads it as a valid check. What the sweepstakes will tell you are, “Cash the check, you get the bulk of the money and send $5,000 to us for processing.” Fifteen days later, that check bounces and the senior is liable for that $5,000. Some even come looking like official IRS or Canada Revenue Agency refunds.
4. Health care fraud. It’s a growing “industry,” particularly in the U.S., and frequently ignored. Scammers misuse a medical card to then fabricate treatment and get paid for it. Scammers can find out a senior is diabetic, for instance, call him up and say, “Give us your Medicare card number, and we can send your supplies through the mail.” Or they can obtain free treatment by assuming that older adult’s identity.
5. Identity theft. A senior gets the call: “We need to verify your account number.” The caller will then ask the senior to provide Social Security or Social Insurance number information. Scammers can match that information with the senior’s phone number, last place of employment and home address. When they have put that package together, they can use it to take a loan out on home, open credit cards, go to box stores and open an account, and get a $5,000 line of credit. The senior gets the bill, and the scammers get the goods.
6. Financial exploitation, including online investment and securities fraud. Scammers will sell seniors long-term securities or stock. They have no problems selling a woman in her 80s a certificate that doesn’t mature for 20 or 25 years. They’re relying on her inability to understand the fine print. Then, if she needs the money, she must break the bond and pay penalties. Scammers are making a commission. Other scams in this category may include forged checks and home-repair fraud.
These are only the top six; there are many more scammers out there with some very sophisticated ways in which to part you from your money. If it looks too good to be true it most likely is and if it pops up on your computer don’t push the button. Remember when you were five years old and were starting to cross the street by yourself? At that time your mantra was “stop, look and listen” – it was good advice then to avoid getting run over and I think it stills applies today as we get older.
Fred L. Goldenberg is a Certified Senior Advisor and the founder of Senior Benefit Solutions, LLC, a consumer and financial services organization in Traverse City. If you have any questions or comments about this article or any senior issue, he can be reached at 231-922-1010 or email@example.com