According to the AARP and the National Council on Aging, people over age 65 comprise only about one-eighth of our population; however, they are the victims in approximately one-third of all scam cases.
If we are going to make sure our retirement savings last the rest of our lives, it's not enough to be certain that it is invested well. We must also be sure that no one can trick us into turning some of it over to a fraudulent business.
Seven Common Scams Against Senior Citizens
Sweepstakes: Beware of letters, emails and phone calls announcing that you have won a contest or sweepstakes, especially one that you do not remember entering. If the contest administrators ask for money to pay them money in advance to cover taxes, insurance or other fees, it is almost certainly a fraud, since honest contests are not allowed to do this. Call your local sheriff's office or county prosecuting attorney's office.
Online Dating: If you put your profile on a dating site, be cautious if, after weeks or months of pleasant messages, the person you have connected with online begins to express a need for money. They may say they want the money so they can afford to visit you or because they have a medical or personal emergency. Frequently they will ask that you send the money in a wire transfer. American women over the age of 50 are the most common victims of these scams. They lost a reported $34 million in 2012, while American men lost approximately $5 million. It is believed that many more cases go unreported because the victims are too embarrassed to tell anyone. Each incident costs the victim an average of $10,000.
Phony Charities: I have repeatedly listed on this blog that people need to thoroughly vet any new charity before they make donations to it. Never give your credit card information to someone who comes to your door or calls you with a charitable request. Be skeptical of any charities that you have never heard of. Check them out with the Better Business Bureau Wise Giving Alliance, CharityNavigator.org, or a similar charity evaluator. Otherwise, stick to charities that you have dealt with in the past and trust, such as your religious organization, the Red Cross, United Way and similar well-known non-profits.
Grandparents Scam: Two personal friends of mine have fallen victim to this scam. Both of them were intelligent women who never thought they would fall for something like this. Both of them discussed the situation with their husbands before sending money. One of them is married to a retired Deputy Sheriff and even he was fooled. In this scam, a upset "grandchild" or other relative calls, desperately begging for money and sobbing at the same time, so it is hard to recognize their voice. Think you wouldn't be fooled? People in the United States have reported losing $110 million a year to this scam ... and many more may not have reported it!
Home Repair Scams: These scams happen most often after a major catastrophe that damages homes in your neighborhood; however, they can happen at other times, as well. Someone may show up at your door offering to repair your gutters, fix your driveway, replace roof shingles or make other home repairs. They can cheat you in one of two ways: either they ask for an upfront fee and then disappear; or they make shoddy repairs and keep asking for more and more money to fix new "issues" they find (or create). Get recommendations for contractors from your friends, neighbors or insurance company before you use anyone. Make sure they have a contractor's license. Never hire anyone who unexpectedly shows up at your door.
Healthcare Thieves: This has been going on for a long time, but it is expected to become worse for a while because so many people are confused about the new Affordable Care Act. A stranger, pretending to be a consultant, may offer to help you get free medical supplies or to help you understand changes to your insurance. What they are really trying to do, however, is steal your identity, get medical care under your name, and leave you with the bill. A woman here in Orange County, California, where I live, was arrested a few years ago for stealing another woman's medical identity and using the other person's identity to get several elective surgeries, including cosmetic surgery!
Investment Scams: Unfortunately, these types of crimes did not end with the arrest of Bernie Madoff. I have known several people who have fallen for these types of smooth-talking crooks. One elderly couple we know lost nearly all their savings and were stunned when they discovered that "the nice young man" they trusted had actually stolen from them. This scam may start with a free-lunch seminar or some other special program set up under the guise of helping seniors find "low-risk" investments. People can be wiped out before they realize there is a problem. Once again, stick with major investment firms or those that you know very well.
If you believe you have been a victim of a thief or scammer, contact your local police department, sheriff's department or the prosecuting attorney's office. Keep any evidence you have that will help them identify the person behind the scam.
Other scams that often target senior citizens are counterfeit drugs, funeral scams, anti-aging products, and deceitful practices involving financial services such as reverse mortgages. Always discuss major outlays of money with other family members as well as trusted financial advisers.
Bottom line: Be careful. Be skeptical. Rely on all those years of experience that have kept you safe during your younger days. You do not want to give away your hard-earned savings to criminals.
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AARP Bulletin, Fall, 2013.
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