by
Susan Ladika May 5, 2015
Summary
Cons aimed at the elderly include a
‘grandchild’ in distress and threats from a government ‘official.’ They’re
effective and on the rise
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It may be a phone
call from your “grandson,” needing to be bailed out of jail; a Social Security
administration “official” saying you need to verify your information to
continue to receive benefits; or a Canadian “official” saying you need to pay
taxes to receive your lottery winnings.
While the scams
differ, the motives are the same — trying to separate you from your cash. And
the fraudsters are taking particular aim at older Americans.
Fraud and scam
complaints filed by those 60 and older nearly doubled between 2010 and 2013,
according to the Federal Trade Commission (FTC).
Those 60 and older
accounted for 14 percent of the 459,000 complaints filed in 2010, according to
the FTC’s Consumer Sentinel Network Data Book. Just three years later,
consumers in that age group filed 27 percent of the 459,000 complaints.
And that elder fraud
comes with a steep price. A 2015 report by the financial services firm True
Link found fraud against seniors totaled a staggering $9.85 billion a year,
with the average loss per victim over five years reaching $13,225.
“The scammers are
successful because they’re very convincing. Sometimes they sweet talk their
targets, other times they berate them,” says Noelle Talley, spokeswoman for the
North Carolina Department of Justice. “They use ploys that are hard to say no
to — claiming to be a grandchild in distress, for example.”
If that’s not enough,
“they are often masters at exploiting age-related memory conditions,” Talley
says.
Terri Worman,
associate state director with the AARP in Illinois, says, “There’s a scam for
almost anything you can think of.”
Fraudsters use
technology to make mail, email and websites look legitimate, and they’ll tinker
with caller ID so the phone number that comes up looks official.
One favorite tactic
is doctoring caller ID so it seems the call is coming from the Internal Revenue
Service (IRS). The caller then claims you need to pay your taxes immediately by
wire transfer or prepaid card, or you’ll face arrest, deportation or other
legal action. “People still very much believe you present yourself as who you
say you are,” Worman says.
On the one extreme,
“Criminals sound as nice as you need them to be so you believe you’re their
friend,” she says. On the other end of the spectrum they use fear and
intimidation to try to get you to do their bidding.
Criminals sound as nice as you need them
to be so you believe you’re their friend. — Terri Worman AARP Illinois
Fraudsters may target
older Americans because of their household wealth, or because they have steady
income from Social Security benefits, says Ramsey Alwin, vice president for
economic security at the National Council on Aging.
The bad guys also may
scare seniors into revealing personal information by saying they might lose
their government benefits. They’ll typically call and say they need you to
update or verify your personal information or you’ll lose your Social Security
or Medicare benefits. “For a lot of people that’s their lifeblood,” Worman
says.
If you give them any
information they might use it to file fake Medicare claims in your name, commit
identity theft or tap into your bank account.
Government programs
such as Medicare and Social Security have your information at hand, so there’s
no reason to provide it again, she says. But if you’re worried about your
benefits, you should hang up, look up the phone number online or in the phone
book and call the agency yourself. Never call any recommendations
by number the caller provides, as it’s likely to be part of the scam.
Worman says some
other common scams targeting seniors these days include:
Grandparents scam: You get a call from
someone claiming to be your grandchild, who says he needs you to bail him out
of jail. The fraudsters may have combed social media sites looking to see who
your relatives are so they can name drop and sound legitimate. To protect
yourself, Worman says you and your family members should pick a secret
password. If you get a strange call from someone purporting to be a family
member requesting money, ask them for the password. A scammer will probably
hang up.
Lotto or sweepstakes scam: You’ll get a call,
often originating from Canada or Jamaica, congratulating you for hitting it big
in the lottery. You’ll get your winnings once you pay taxes and fees by wire
transfer or using a prepaid card. If you don’t have the cash, they may tell you
to borrow it. They also may threaten you, Worman says. For example, they’ll
look up your address on Google maps, then say the car parked across the street
from your house is part of their group and they’re keeping you under watch.
Disaster scams: If a disaster such
as an earthquake or hurricane strikes, you may get a call from someone
purporting to be from your local chapter of the Red Cross, asking you to make a
donation using your credit card, she says. That’s a great way for the bad guys
to get their hands on your card information. Instead, donate through the organization’s
secure website or send a check to the address you find online.
Once someone has fallen for a scam,
their contact information is likely to be sold to other scammers, so they will
be targeted again and again. — Noelle Talley North Carolina Department of
Justice
Tech support scams: You’ll get a call
from someone claiming to be from Microsoft tech support, saying they need to
help you fix your computer. Instead they may put malware on your computer or
may charge you a $49 fee for their “assistance,” and then use your credit card
to ring up fraudulent charges. “They play into what seems feasible,” Worman
says.
“Once someone has
fallen for a scam, their contact information is likely to be sold to other
scammers, so they will be targeted again and again,” Talley says.
Or the same scammers
will tap their victims repeatedly, and the scams could go on for years, says
David Kirkman, special deputy attorney general in the consumer protection
division of the North Carolina Attorney General’s Office. In North Carolina,
the average victim lost $10,000 in 2013, and “six figures is not unusual,”
Kirkman says.
Those are just the
crimes that law enforcement officials are aware of. Often seniors don’t report
fraud, or even tell family members about it, because they feel embarrassed, or
they fear losing their financial independence, Alwin says. “It shows their
vulnerability”
The victims may also
unwittingly wind up as middle man or “money mules” in these schemes, helping to
transport and launder stolen money.
The victims may have
had good careers, such as working as a pilot or professor, and the scammers
will make them feel important by saying, “You’re the only one who can help us,”
Kirkman says. These victims “want to be decision-makers again.”
Victims also may be
depressed, lonely or suffer from mild cognitive impairment. If the scammers say
they’ve won the lottery, it “makes them feel good about themselves,” he says.
Being a victim of
fraud can mean far more than losing the money in your bank account. The True
Link study found that of the seniors who experienced fraud, 2 percent lost
their home or other major assets as a result; 7 percent skipped medical care
and 4 percent reduced their nutritional intake for financial reasons.
“In some cases we are
able to recover money back for victims, although once someone has wired or
provided money via GreenDot [prepaid cards] to someone overseas, it’s very
difficult to get it back,” Talley says.
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