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June is Elder Abuse Awareness month, an excellent time to brush
up on the latest scams targeting older members. Up to five million older
Americans are abused every year, and the annual loss by victims of
financial abuse is estimated to be at least $36.5 billion.
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People over 60 are often the targets of criminals because they are
more financially secure, they may experience memory issues, and they tend
to be more trusting.
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The following is a review of ten popular scams against older
individuals:
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1. The Grandparent Scam:
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The Grandparent Scam may be the most devious because it takes
advantage of many older adults’ biggest vulnerability – the love of a
grandchild, and the fear of putting them at risk. Scammers will place a
call to an older person, saying something like: “Hi Grandma, do you know
who this is?” When the unsuspecting grandparent guesses the name of the
grandchild the scammer sounds most like, the scammer has established a
fake identity without any effort or background research. Once the
grandparent “correctly guesses” which grandchild is calling, the scammer
will usually ask for money to solve some unexpected financial problem,
such as overdue rent, payment for car repairs or even a hospital bill
because the grandchild has been in an accident. The funds must be paid
via Western Union, MoneyGram, or other similar method. The scammer will
also beg the grandparent - “please don’t tell my parents, they would kill
me.”
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2. The Puppy Scam:
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Seniors can be particularly vulnerable to pet scams, especially if
they have suffered the loss of a loved one and are looking for a
companion. Generally, using the internet, a scammer posts a picture of an
adorable puppy that is available for an unbelievably low price. There’s
usually a heart-breaking background story about why the cute puppy needs
a new home ASAP. Once the older person makes contact with the seller
(scammer), there will be a number of fees — such as payment of up‑front
adoption fees, shipping costs, etc. — that must be paid via wire transfer
or prepaid debit cards. Then, after those fees are paid, there are often
additional fees and multiple delays — such as insurance costs,
specialized veterinary care, quarantine costs, etc. In reality, there was
never a puppy — and the victim’s money is gone.
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3. The Tech Support Scam:
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Tech support scams targeting older adults are on the rise.
Scammers often pose as support or service representatives, offering to
resolve issues related to a compromised email, financial account, virus
on a computer, or even a software license renewal. These scams usually
start with a phone call or a pop-up warning of a computer problem that
gives a number to call. The scammers often claim to be Microsoft or Apple
— they may even spoof caller ID to make it look like one of these
companies really is calling. In another twist, they get people who
actually do need computer help to call them by posting phony customer
support numbers for well-known companies online. These scammers convince
people to hand over remote access to their computer and then make a big show
of “troubleshooting.” They may open system folders or run scans that seem
to show evidence of a problem. Then they ask for money for supposed
repairs and things like fake service contracts.
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4. Online Romance Scams:
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Romance scammers usually create fake profiles on dating websites
and on social media sites. While they can be hard to spot, the tactics
they use are pretty common, for example:
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They claim to be living or traveling outside the United States,
which allows them to avoid meeting with victims in person.
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They quickly escalate the relationship by using lots of
flattery, professing love and asking to move conversations off the
dating service so they can communicate directly by text or email.
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They make plans to meet in person, but always come up with
excuses not to meet.
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They claim to have a medical emergency or unexpected expense and
ask for money. They also might ask for money to pay for a trip together
or to come visit. They typically ask for money to be wired or to buy a
gift card or cash reload card and provide them with the card number.
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While the scammers are usually easy to spot, those being defrauded
oftentimes do not take kindly to any suggestion that their new love is
actually a scam. They remind you that it is their money and they can
spend it however they like. While this is true, it doesn’t make watching
your loved ones lose their life savings any easier.
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5. “The Pigeon Drop”:
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This scam can take on various scenarios. Generally, the scammer
tells the potential victim (“the pigeon”) that they have found a large
sum of money and are willing to split it if the victim will make a show
of “good faith” by handing over cash to the scammer to hold while they
are determining how to split the money. For example, this scam often
occurs in a store parking lot, where the scammer approaches the selected
victim, usually an older person, and claims that they have just found a
bag, briefcase or envelope and asks whether it belongs to the victim.
When they look inside the bag for identification they find what appears
to be a large amount of cash with some indication that it comes from an
illegal activity, such as gambling or drug money, so returning the money
is impossible. The final step is the request that each of the people who
“found” the money offer some kind of deposit of their own money to show
good faith that they will split the money. Once the victim provides their
“good faith” cash, the scammers deftly switch out the “found money” for a
look-alike bag or envelope full of useless paper. The scammers are long
gone with the victims “good faith” money before the victim determines
that the “found money” has been switched.
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6. Email/Phishing Scams:
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In this scam, a senior receives email messages that appear to be
from a legitimate company or financial institution, asking them to
“update” or “verify” their personal information. In one of the variations
of this scam an older member may receive an e-mail that appears to be
from the IRS about a tax refund and requests personal information to
receive the funds. As you know, the IRS never sends such e-mails.
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7. Investment Scams:
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Because many seniors find themselves planning for retirement, a
number of investment scams have been targeting seniors as they are
looking to safeguard their cash for their later years. From pyramid
schemes like the one that made Bernie Madoff infamous to stories of a
Nigerian prince looking for a partner to claim inheritance money,
investment schemes have long been a successful way to take advantage of
older people.
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8. Homeowner‑Related Scams:
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Scammers like to take advantage of the fact that many people above
a certain age own their homes, a valuable asset that increases the
potential dollar value of certain scams. A couple of home-related scams
include:
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A property tax scam where scammers send personalized letters to
different properties apparently on behalf of the County Assessor’s
Office. The letter, made to look official but displaying only public
information, identifies the property’s assessed value and offers the
homeowner, for a fee, to arrange for a reassessment of the property’s
value and therefore the tax burden associated with it. The fee must be
paid in advance, and after payment is made the victim never hears from
the “Assessor’s Office” again.
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With legitimate reverse mortgages on the rise, scammers are
taking advantage of this new popularity. As opposed to official
refinancing programs, however, unsecured reverse mortgages can lead
property owners to lose their homes when the scammers offer money or a
free house somewhere else in exchange for the title to the property.
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9. Sweepstakes & Lottery Scams:
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This simple scam is one with which most credit unions are
familiar. In this one, scammers inform the older member that they have
won a lottery or sweepstakes and must make some sort of payment, for
example to cover the taxes, before they can collect the winnings. To lend
credibility to the scam, seniors will often be sent a check, representing
partial payment of the winnings, that they can deposit into their credit
union account. Before the check has time to be rejected as fraudulent,
the scammers will quickly collect money from the older member for the
supposed fees or taxes on the prize. When the check bounces, the scammers
are long gone and member is out all of the “tax and fee” money they paid
the scammers.
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10. Funeral Scams:
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The FBI warns about two types of funeral-related fraud often used
against seniors. In the first one, scammers read obituaries and call or
attend the funeral service to take advantage of the grieving widow or
widower. The scammer claims that the deceased had an outstanding debt
with them, and will try to extort money from relatives to settle the fake
debts. In another common scam, funeral directors will insist that an
expensive burial casket is necessary even when performing a direct
cremation. In reality, cremation can be accomplished with an inexpensive
cardboard casket.
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