Scam artists are smart, capable criminals. They target the elderly because that age group possesses a combination of characteristics that make them ideal victims. The best way to avoid scams is to be on the lookout for them. A little education can go a long way toward keeping yourself and your loved ones safe.
According to the FBI, today's seniors were "generally raised to be polite and trusting." According to Sharane Gott, president and CEO of the Better Business Bureau of Acadiana in Lafayette, La., the elderly "have more time. They are lonely, and they just want someone to talk to." Accordingly, the elderly are more willing to talk to telemarketers or to respond to fraudulent emails.
Both Gott and the FBI agree that the pride of the elderly and their desire not to be seen as incompetent by family members often prevent them from reporting fraud. And even if they do report the crime, the elderly are not always precise and accurate witnesses. Scam artists rely on this combination of traits to get away with fraud -- and their money.
"Traditionally," Gott says, "people target the elderly because that's where the money is." According to the FBI, the elderly make attractive targets because they are the "most likely to have a 'nest egg,' to own their own home, and/or to have excellent credit." Typically, these scams seek access to seniors' bank accounts or credit cards. Common scams include telemarketers calling with a rushed "limited-time" offer of vacations, vitamins or prizes. Scam artists will stress the free nature of the product while also asking seniors to pay only small fees.
Gott has seen reports of a new scam in which a target is told, "Someone in their family has provided a free Medic Alert bracelet. They just have to pay a small monthly service fee by credit card." Both Gott and the FBI note that a common aspect of scams is that payment will be required before a target ever receives a good or service -- the reverse of legitimate transactions.
"But now," Gott says, "the scam artists -- I like to call them crooks -- are asking for personal information in order to commit identity theft." These new scams seek out a target's insurance or Medicare information in order to make fraudulent claims. "Someone will call," Gott says, "and claim to be from a government agency. They will offer a medical device to the victim for free, so long as they provide their Medicare number, some personal information and pay a small fee. Number one, that's not really free, and number two, a government agency would already have that information." The FBI reports that scam artists will often offer fake tests at nursing or retirement homes to collect Medicare information.
And as baby boomers enter retirement, scam artists are adjusting their targets accordingly. Although many might think the boomers' increased familiarity with the Internet would protect them from scams, the FBI reports that increased use of the Internet tends to correlate with increased risk.
With the recent economic downturn, scam artists have targeted the crucial pieces of boomers' retirement plans: investments and their homes. Investment schemes include paying fees for investment advice, pyramid schemes and other financial fraud. Perhaps the most common scheme targeting homes is a reverse mortgage scam, also known as home-equity conversion mortgages. Other scams include "mortgage audits," in which a scam artist will claim they will save you thousands by finding a cheaper mortgage, but only after you pay a fee, of course.
Education is the best way to avoid becoming a victim of scam artists. Scam artists operate in the shadows. A little knowledge shines light on their crimes. Reading articles like this can cause alarm bells to ring the next time a telemarketer calls. But what about your elderly loved ones? How can you protect them? Gott cites advice she once read in an Ann Landers column: "Tell them about the story you read, or cut out the story and share it with them. Say that you share it with all your friends, not just them. You want to protect their pride and let them save face."