Kathleen Beilstein just wanted to ease the pain she’d had for years. The retired teacher from Midlothian, Va., responded to a television advertisement for a company that promised to help. Within a day, she was at a clinic, talking with a doctor who said he could provide relief within six weeks.
“They had me sign papers for the treatment and told me it would cost $6,300, but that it would be covered,” she says. “They said someone had just been in with the same insurance, and it would only cost me $200.”
Soon she received a bill for $6,300, including a threat that she would be charged a 35 percent late fee if she didn’t pay within days, so she paid with a credit card.
Beilstein was lucky. Her credit card company eliminated the charge, but her story is familiar to experts, and often such cases don’t turn out well.
Why Scammers Target Older Adults
Retirees are particularly susceptible to fraud that exploits their vulnerabilities—often promising to improve health, prolong life, or enhance their finances.
Seniors may also respond more readily to threats, repeated calls, or a smooth pitch. “It adds stress to my life just feeling invaded so many times a day,” says Jana Maples, former president of the Pinellas Education Employees-Retired, in Florida. “If you do answer the phone, they are so pushy, and you just have to hang up, which is hard for my generation, since we were taught to be polite.”
Some older people are also less comfortable with technology and may not recognize a phony email or website as readily.
FBI spokesperson Melanie Lowry says fraudulent activity is growing in its artfulness and reach, and seniors are much more likely to be targets. “Many seniors today own homes and are financially secure, making them vulnerable. Their generation is also often more trusting,” she says.
Older adults can even become targets of romance fraud, where “perpetrators pose as potential partners through dating websites,” Lowry says. “The best tip for retired people is to never give any personally identifiable information, money, jewelry, gift cards, or funds to people or businesses they don’t know.”
Swindlers can approach you through email, phone calls, the mail, or in person. So keep an eye out for these common types of fraud, and follow our safety tips to stay one step ahead of the scammers.
Identity Theft
A stolen credit or debit card. A financial statement pulled out of a trashcan. An online “phishing” scam trying to lure you into sharing personal information or important records. Any of these scenarios, and many others, are opportunities for scammers to steal your identity.
And these criminals are crafty. One of Maples’ members reported requests for donations from fraudulent charities. The scammers knew which charities the member had supported previously and pretended to support similar causes. Another member reported that someone tried to claim her tax return from her state taxing agency. And some victims’ identities have been stolen and used for illegal immigration.
Pat Etherton, a member of the Lincoln Education Association-Retired, in Nebraska, says her bank closed her accounts after someone used her information to try to open a new online account. “It took me months to get all of my information switched over. I had that original bank account for 50 years. It was a terrible ordeal,” she says.
Health Care Cons
Medicare schemes and false offers for free medical equipment are also rampant. “Deals” on equipment or offers to complete and file a signed Medicare form on your behalf may allow scammers to charge insurers for products or services that you will never receive. Among these rackets are “rolling lab” schemes.
These mobile units might visit a retirement community or senior center and offer free, fake medical tests— such as blood pressure and cholesterol checks. Then they steal the seniors’ Medicare numbers or use them to bilk insurers.
Lowry says scammers often advertise on television or in publications, offering free medical information as a way to attract seniors. These schemes may promise low-cost (but phony) prescription drugs, improved cognitive func- tion, virility, physical conditioning, and pain reduction.
End-of-life Scams
Retirees are particularly vulner- able after the death of a loved one. Criminals identify these people through obituaries and other public notices, and then contact them by phone.
These seniors may also fall victim to overcharges for funeral expenses and funeral insurance, or they may inadvertently make the scammers a beneficiary of the insurance benefits. Some crooks may even dare to suggest that a recently deceased spouse had previously arranged the deal, so the widow should follow through with it.
Reverse Mortgage Fraud
Reverse mortgage scams are engineered by unscrupulous profes- sionals in real estate and financial services who try to steal equity from the property of unsuspecting senior citizens, the FBI warns.
Often offered by phone or in advertising, these schemes promise “to help” retired persons take out equity from their home and often include fake proposals to consolidate or eliminate debt—for a fee, of course.
Ponzi and Pyramid Schemes
If seniors are lucky, they have robust retirement savings.
Unfortunately, that also makes them appealing targets for investment fraud. Ponzi schemes—made famous by Bernie Madoff, who ripped off 4,800 investors to the tune of $64.8 billion in 2008—promise financial returns beyond what might be expected with traditional investments.
Initially, the returns seem almost too good to be true, because the criminal is paying one investor with the funds of another investor. But eventually, the money runs out.
Similar pyramid schemes use money from new investors to pay the investors that signed up previously, but they also ask participants to recruit new investors. Seniors often hear about the plans from people they trust, who don’t realize they are caught up in a scam.
Con artists can also recruit investors for “pump and dump” scams, in which the scammers drive up the price of a stock by getting a lot of people to invest, and then sell, or “dump,” the stock at a high price. The criminals walk with tons of cash and leave their investors with very little.
Robocall Rip-offs
The number and variety of fraudulent robocalls—automated phone calls—is growing fast, Lowry warns. She advises people to avoid answering calls from unfamiliar numbers.
“If it is important enough, the caller will leave a message,” she says.
Maples says her members complain about scam phone calls that are annoying and worrisome—even though many know how to respond to them. “It is so scary to me that there are so many dishonest people trying to find a sucker,” she says.
Threats and Warnings
“We’ve seen a lot of government impersonation scams, where perpetrators threaten to arrest or prosecute victims unless they provide funds—particularly scammers posing as law enforcement,” Lowry says.
According to the U.S. Senate Special Committee on Aging, seniors have also received frequent threats of legal action that appear to come from law offices.
During a recent program on scams, Maples’ group discussed calls that fraudulently warn members their social security or bank accounts are endangered, or that a parking ticket needs to be paid when one hadn’t even been issued.
And scammers sometimes send alarming emails saying that a victim’s computer has been hacked and then offer to fix it. When the victim signs over access to his or her computer, the criminal gains access to the victim’s personal information.
Phony Advance Fees
The FBI warns retirees about offers that request money upfront in exchange for something of greater value, such as a loan, contract, investment, or gift. DeLoris Tonack, president of the Nebraska State Education Association-Retired, says members have com- plained about fraudulent offers on Facebook for sizable “living assistance” benefits in exchange for a down payment.
Scammers have also been known to use online auctions or vacation rental platforms to seek upfront payment for products that don’t actually exist.
“There is a simple rule I keep in mind that we all know,” Bielstein says. “If it sounds too good to be true, it probably is.”
The U.S. Senate Special Committee on Aging offers a guide for seniors that includes the 10 scams most commonly reported by older Americans. To read the guide, go to aging.senate.gov/fraudbook/ index.html. If you receive a suspicious call, you can contact the committee’s fraud hotline at 1-855-303-9470.
How To Keep Your Personal Information Safe
- Don’t dispose of receipts or statements in a readable form. Tear them up or shred them.
- Reconcile accounts monthly, check credit reports regularly, and report discrepancies immediately.
- Don’t provide personal data over the phone or online unless you initiate the contact.
- Don’t pick up calls from unknown numbers, open suspicious emails, or click on unfamiliar attachments or links—even if they appear to come from a friend. Your friend may have been hacked.
- Never let a caller take control of your computer, and be wary of tech support offers. And be sure to update your computer anti-virus software.
- Steer clear of vendors that are foreign, use post office boxes, or make unusual phone arrangements.
- Don’t respond to messages that play on fears or threats.
- Don’t judge integrity by whether a person sounds genuine or if a company’s website or brochure looks professional.
- Give insurance or Medicare identification to familiar providers only. Never sign a blank claim form.
- Confirm contacts from the IRS, Medicare, or Social Security Administration, and be suspicious of unsolicited contact.
