Do you know anyone who has been affected by elder fraud? Seniors are certainly not the only people who fall prey to scams and schemes, but they are attractive targets for fraudsters – for a number of reasons: They often own their homes, have a nest egg of savings, and are more trusting of strangers than younger generations. Plus, elderly fraud victims are frequently reluctant to admit they’ve been scammed because they are ashamed or fearful of being seen as incapable of managing their own affairs.
Every year, hundreds of thousands of people of all ages get duped by cunningly deceitful con artists. And according to a study in the Journal of General Internal Medicine, nearly one in 20 adults over age 60 have been financially exploited at some point in their senior years. However, by arming yourself with information and being aware of common scams, you can take steps to avoid becoming an unfortunate statistic.
This article provides details on some of the most common scams that Americans need to watch out for. It also gives practical tips on how you can protect yourself from various scams and what you can do if you end up becoming the victim of a fraud.
9 Common Scams and How to Avoid Them
The key to avoiding scams is being able to identify them. After all, the more you know, the better prepared you will be. Here are the details on 11 common scams, along with tips on how you can keep from becoming a victim of them:
- IRS imposter scams
This is one of the top scams that get reported each year to the Fraud Hotline set up by the U.S. Senate Special Committee on Aging. According to the Committee, more than 2.1 million people have been approached by fraudsters pretending to be Internal Revenue Service (IRS) agents. This is typically a phone scam, but it is also among the most common email scams. The con artists claim that the victims owe back taxes and penalties, and unless payment is made immediately, arrest, foreclosure, or other legal consequences could result. Victims are often instructed to pay by wire transfer, credit card, certified check, or even gift card. The Committee says that, collectively, Americans have lost almost $65 million to this scam.
How to protect yourself: Remember that the IRS always sends bills to taxpayers through the postal service before calling about taxes that are owed. Legitimate IRS agents will never insist on immediate payment, ask for banking information over the phone, or threaten legal action against taxpayers. If you get one of these calls or emails, the best thing to do is just hang up or delete the message (without clicking on any links provided in such emails). To confirm whether you really do owe taxes, contact the IRS at 1-800-829-1040.
- Medicare phone scams
According to a survey by AARP, scams related to Medicare are a source of concern for most American adults over age 65. One of the latest money scams involves fraudsters calling seniors to tell them they must pay a fee in order to receive a new ID card. In reality, all Medicare enrollees will receive their cards free of charge through the mail and do not have to do anything beyond opening the envelope and sharing the new number with their healthcare providers.
Other popular scams involving Medicare feature callers who say:
- You must purchase Part D prescription drug coverage or you will lose all of your Medicare coverage. (The truth is that Part D is completely voluntary).
- You are entitled to a refund and you need to supply your Medicare number and banking information in order to collect your money.
- You qualify for a free medical device such as a back brace, but you need to provide your Social Security number for coverage verification and give your credit card information to cover shipping fees.
- You are eligible for additional Medicare benefits, but you need to update your file with Social Security or credit card information.
Once the con artists have your data, they can use it to obtain health services, purchase medical equipment, fill prescriptions, or file false claims and pocket the money. A 2017 report by the World Privacy Forum found that incidents of medical identity theft were on the rise in the U.S., particularly in southeastern states like Florida and Georgia.
How to protect yourself: Safeguard your personal information carefully. Most Medicare scammers perpetrate their hoaxes by phone, but some use email or even show up at your door. It’s important to know that real Medicare representatives contact people by regular mail. They will never come to your home uninvited, call you to try to enroll you in a drug plan, or ask for payment information over the phone. If you have any concerns, call the customer service number found on the back of your Medicare card.
- Silent calls and robocall scams
Have you ever answered your phone, only to find there’s no one on the other end? It might simply be a wrong number, but it might also be an automated system testing out phone numbers to see which ones are answered by real humans. These silent calls are designed to identify potential scam targets. Once you answer, your number is added to a list that gets sold to an untold number of fraudsters. And that leads to robocalls.
Robodialing technology allows con artists to make huge numbers of unsolicited automated calls easily and inexpensively. What’s more, scammers can easily spoof the number that appears on your caller ID to make it look like the call is from a legitimate company or from your local area code (when in fact it might originate overseas).
Some robocalls are legal. For instance, you might get automated appointment reminders or pre-recorded messages from local candidates running for office. Those are allowed. But robocalls can’t be used to promote the sale of a service. If you get a robocall warning you about a problem with your credit card or offering you a special deal on a home security system, it’s probably a scam.
How to protect yourself: Get on the U.S. National Do Not Call Registry, screen your calls, and don’t pick up if the number doesn’t look familiar. If you get fooled and do answer, just hang up. Be sure not to react to anything in the message (such as a statement like “press 3 to be taken off the list”) as that will probably just lead to more calls. You may also want to look into call-blocking services from your phone provider or companies like Nomorobo. These services can intercept and block calls from numbers that are known to be used by robocallers.
- Charity scams
Sadly, it’s common for scammers to pose as representatives of charitable organizations in order to prey on seniors’ willingness to give to good causes. This is particularly true in the aftermath of natural disasters like earthquakes, fires, and hurricanes. Fraudsters might call you or come to your door requesting donations for either well-known charities or ones that they made up themselves. Or you might be directed to bogus charity websites (many of which will have names that are very similar to well-known organizations) that collect your money and steal your credit card information.
How to protect yourself: Don’t let yourself be pressured into giving a donation until you’ve had a chance to research the charity, perhaps through free sites like Charity Navigator or BBB Wise Giving Alliance. Never give your credit card information to people who appear at your door; instead, ask for printed materials that you can review in your own time. Check the charity’s website address for odd misspellings and keep in mind that most non-profit sites end in .org rather than .com. (And be aware that in the wake of a disaster, legitimate charities will generally appeal for donations through the media rather than approach individual potential donors.)
- Counterfeit prescription medication
One of the most potentially harmful senior scams involves counterfeit medications that are sold online. While there are plenty of legitimate pharmacy websites that offer convenient service, there are also plenty of disreputable sites that are just looking to con you out of your money. Between 2008 and 2016, the National Association of Boards of Pharmacy (NAPB) identified more than 10,000 websites that were operating illegally.
Many older adults searching for cheaper prescription drugs online end up paying for medications that either never arrive or are not the real deal. In some cases, seniors pay for drugs that do not contain the right active ingredients or are expired or contaminated with other substances. Such Internet scams pose a serious health risk to those who get caught up in them.
How to protect yourself: Be wary of sites that supply medications without requiring a valid prescription or offer drugs at suspiciously discounted prices. Check to see if the site is recognized by the Digital Pharmacy Accreditation program or the Pharmacy Verified Websites Program from the NAPB. Pharmacies in both Canada and the U.S. that appear on these lists are safe to purchase from. The NAPB also maintains a list of online pharmacies to avoid.
- Grandparent scams
This is another one of those financial scams that play on seniors’ heartstrings. Fraudsters have been known to phone random older adults and say something like, “Hey Grandpa, guess who this is?” The unwitting senior names an actual grandchild that the voice sounds most like. Having established a bogus identity, the scammer then begs Grandpa to wire some cash right away because he or she has been arrested, been in an accident, or is overdue on rent. The fraudster may add something like, “And please don’t tell Mom or Dad, OK?”
If the victim complies, the con artist will frequently call again, claiming the fees are higher than initially thought. By the second call, most people realize they’ve been scammed. In 2016 alone, the Federal Trade Commission collected almost 15,000 complaints about people masquerading as family members and friends, according to the U.S. Senate Special Committee on Aging.
How to protect yourself: Proceed with caution and attempt to verify the facts before wiring money to grandchildren in trouble. Try asking the person on the phone some basic questions that only your real grandchild would be able to answer, such as the name of a family pet. Or reach out to a close friend or other relative of your grandchild to see what they know about the situation.
- Sweepstakes scams
You get a letter or phone call saying you’ve won a huge monetary prize in a lottery or sweepstakes. Wow! The catch is that you need to pay a small fee or provide your banking details in order to collect your winnings. This is one of the most common scams out there because it still works. A typical sweepstakes scam involves the Jamaican lottery. You get a call from a number that begins with 876, which from a quick glance can look like a toll-free number even though it is actually the country code for Jamaica. The caller says you’ve won the Jamaican lottery, but before you can receive your windfall, you must pay a few hundred dollars in taxes or processing fees. You are instructed to send the money via wire transfer or prepaid debit card. The U.S. Senate Special Committee on Aging says that at the height of this scam, con artists were swindling $300 million a year from thousands of American seniors.
How to protect yourself: Always remember that you can’t win a contest you didn’t enter. Also, legitimate lotteries or sweepstakes do not require you to pay a fee in order to collect your prize. Even if the letter you receive includes a check for your “winnings,” the check is worthless and will bounce in a few days’ time if you try to cash it. Never give out your banking information in response to a contest promotion.
- Tech support scams
There are numerous variations of this scam, but this is how it typically works: Posing as a representative of a technology company such as Dell or Microsoft, a caller informs you that his or her organization has detected viruses on your computer. The scammer then convinces you to hand over your banking information as well as remote access to your machine so that the problem can be “fixed” and the service can be billed to you.
In some cases, you might be told to click on a link in an email and follow the directions given there. But when you go to the site, malware gets installed on your device and gives the scammer access to your personal files with information on your bank accounts, passwords, and health records. Some fraudsters lock victims’ systems down and demand a ransom fee to restore access.
According to a report from the Internet Crime Complaint Center, losses from tech support fraud came to almost $17 million in 2020, a 90-percent increase over the previous year.
How to protect yourself: Do not give your financial information or control of your computer to anyone who calls out of the blue claiming to be from tech support. Make sure anti-virus software and pop-up blockers are installed on your device and stay on top of updates. Never, ever click on links in pop-up ads or unsolicited emails. If you have questions, call the real tech support by finding the number on the company’s website or product packaging (not on your caller ID or in an email).
- Fake check scams
Lots of people sell goods via online classified sites such as Craigslist. If you’re hoping to be one of them, you need to be careful: Overpaying by worthless check is one of the most common Craigslist scams.
Here’s how it works: You place an ad for an item you wish to sell. Someone arranges to purchase your item and sends you a cashier’s check. But for some reason, the check is for more than the actual sale price. The buyer discovers his or her mistake and asks you to wire him or her the difference. You deposit the check, send the merchandise, and wire the over-payment to the buyer. Eventually, you discover that the check was never valid, and both your merchandise and the money you wired are gone for good.
How to protect yourself: not accept checks for any amount other than the agreed-upon price. And don’t let any potential buyer pressure you into wiring money; that’s a common trick of scammers. Wait until the check clears before relinquishing the merchandise. Another option is to not accept checks at all and use an online payment service like PayPal instead.
What to Do If You Are the Victim of a Scam
Did you know that financial exploitation is a common form of elder abuse? Many people avoid coming forward because they are embarrassed about being duped, but reporting a scammer is essential in order to crack down on such cons and keep other people from being similarly victimized.
If you’ve been swindled out of money or are the victim of fraud, start by filing a police report. Next, contact your bank or other financial institution so that it can advise you about what actions need to be taken in your situation. For instance, it could mean stopping payment on a check or issuing you a new debit or credit card.
If a scammer has gained access to your Social Security number or other identifying information, you would be wise to put a fraud alert on your credit report. Having such an alert tells creditors that you may have been the victim of identity theft, which means they will contact you if anyone tries to apply for a credit line or open a new account in your name. You can place an alert by getting in touch with one of the following credit reporting companies:
- Experian at 888-397-3742
- TransUnion at 800-680-7289
- Equifax at 800-525-6285
You only need to contact one company because whichever one you call must inform the other two about the alert. Initial alerts are free, last for 90 days, and can be renewed.
If you feel that stronger measures are necessary, you can implement a credit freeze that blocks lenders from accessing your credit report. (Unlike with an alert, you need to arrange a credit freeze with each reporting company separately). This ensures that scammers cannot open new accounts with your information. However, it also prevents you from opening new accounts unless you temporarily unfreeze your credit report, which can incur fees.
Great Post, Greg