10 Scams Targeting Senior Citizens - JuniperCivic.com
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Originally published in the March 2016 Juniper Berry Magazine

10 Scams Targeting Senior Citizens

Deception Burglary Scam

A burglary committed by a person that gains entry to the home and includes, but is not limited to, utility companies. A common explanation is A pipe broke down the block and we have to check the water. Once inside the perpetrators manipulate and distract a victim in order to obtain their valuables.

Health Care/Medicare/Health Insurance Fraud

Every U.S. citizen or permanent resident over age 65 qualifies for Medicare, so there is rarely any need for a scam artist to research what private health insurance company older people have in order to scam them out of some money. In these types of scams, perpetrators may pose as Medicare representatives to get older people to give them their personal information, or they will provide bogus services for elderly people at makeshift mobile clinics, then use the personal information they provide to bill Medicare and pocket the money.

Counterfeit Prescription Drugs

Counterfeit drug scams operate most commonly on the internet where seniors increasingly go to find better prices. Counterfeit pharmaceutical drugs are fraudulently produced or medicines purchased by consumers who believe them to be legitimate. Fake pills may look nearly identical to their genuine counterparts, but may be formulated and produced in substandard conditions. They are, by definition, not subject to the same regulatory scrutiny as legitimate medications.

Funeral & Cemetery Scams

There are two types of funeral and cemetery fraud perpetrated on seniors. In one approach, scammers read obituaries and call or attend the funeral service of a complete stranger to take advantage of the widow or widower. Claiming the deceased had an outstanding debt owed to them; scammers will try to extort money from relatives to settle the fake debt. Another tactic of disreputable funeral homes is to capitalize on family members' unfamiliarity with the considerable cost of funeral services to add unnecessary charges to the bill. In one common scam of this type, funeral directors will insist that a casket, usually one of the most expensive parts of funeral services, is necessary even when performing a direct cremation, which can be accomplished with a cardboard casket rather than an expensive display or burial casket.

Telemarketing scam

When you send money people you do not know personally or give personal or financial information to unknown callers, you increase your risk of becoming a victim of telemarketing fraud. Here are some warning signs of telemarketing fraud ‒ what a caller may tell you:

You must act now or the offer won't be good.

You've won a free' gift, vacation, or prize. But you have to pay for postage and handling or other charges.

You must send money, give a credit card or bank account number, or have a check picked up by courier. You may hear this before you have had a chance to consider the offer carefully.

You don't need to check out the company with anyone. The callers say you do not need to speak to anyone including your family, lawyer, accountant, local Better Business Bureau, or consumer protection agency.

You don't need any written information about their company or their references.

You can't afford to miss this 'high-profit, no risk' offer.

Internet Fraud

As web use among senior citizens increases, so do their chances of falling victim to Internet Fraud. Internet Fraud includes non-delivery of items ordered online and credit and debit card scams. Pop-up browser windows simulating virus scan software will fool victims into either downloading a fake anti-virus program (at a substantial cost) or an actual virus that will open up whatever information is on the user's computer to scammers. Unfamiliarity with the less visible aspects of browsing the web (firewalls and built-in virus protection, for example) makes seniors especially susceptible to such traps.

Investment Schemes

Because many seniors find themselves planning for retirement and managing their savings once they finish working, a number of investment schemes have been targeted at seniors looking to safeguard their cash for their later years.

Ponzi Schemes

Ponzi schemes promise high financial returns or dividends not available through traditional investments. Instead of investing the funds of victims, however, the con artist pays dividends to initial investors using the funds of subsequent investors. The scheme generally falls apart when the operator flees with all the proceeds or a sufficient number of new investors cannot be found to allow the continued payment dividends.

Pyramid Schemes

Similar to Ponzi schemes, Pyramid schemes also collect money from new victims to pay earlier victims. At the heart of each pyramid scheme is typically a representation that new participants can recoup their original investments by recruiting 2 or more prospects to make the same investment.

Reverse mortgage scams

Reverse mortgage scams are engineered by unscrupulous professionals in a multitude of real estate, financial services, and related companies to steal the equity from the property of unsuspecting senior citizens. In many of the reported scams, the victim seniors are offered free homes, investment opportunities and foreclosure or refinance assistance. They are also used as straw buyers in property flipping scams. Seniors are frequently targeted through local churches and investment seminars, as well as television, radio, billboard and mailer advertisements. A legitimate Housing Equity Conversion Mortgage (HECM) loan product is insured by the Federal Housing Authority. It enables eligible homeowners to access the equity in their homes by providing funds without incurring a monthly payment. Eligible borrowers must be 62 years or older who occupy their property as their primary residence and who own their property or have a small mortgage.

Sweepstakes & Lottery Scam

This simple scam is one that many are familiar with, and it capitalizes on the notion that there's no such thing as a free lunch. Here, scammers inform their victim(s) that they have won a lottery or sweepstakes of some kind and need to make some sort of payment to unlock the supposed prize. Often, seniors will be sent a check that they deposit in their account immediately; it will take a few days before the (fake) check is rejected. During that time, the criminals will quickly collect money for supposed fees or taxes on the prize, which they pocket while the victim has the prize money removed from his or her account as soon as the check bounces.

The Grandparent Scam

The Grandparent scam preys on their instinct to protect their grandchildren. Scammers place a call to an older person and say something along the lines of Hi Grandma, do you know who this is? When the unsuspecting grandparent guesses the name of their grandchild, believing they are speaking to their grandchild, the scammer will usually ask for money to solve some unexpected financial problem (overdue rent payment for care repairs, etc.) to be paid via Western Union or MoneyGram, which don't always require identification to collect. At the same time, they may also beg the grandparent, Please don't tell my parents, they would kill me.

March 2016 Juniper Berry Magazine

March 2016 Table of Contents