The elderly are at particular risk of fraud. This is why numerous pieces of documentation and help are available to make sure senior citizens are protected from this. Aside from the common fraud schemes listed by the FBI, there are many other types of fraud of which seniors are particularly vulnerable. Let’s take a look.
Why the Elderly Are More Vulnerable
There are a number of reasons why the elderly are often targeted by fraudsters. These reasons include, but are not limited to:
• Being more likely to have a nest egg, good credit and property.
• Being more polite and trusting, which is something con artists exploit.
• Being less likely to report scams and fraud, because they don’t know how or where to report it. Additionally, the elderly are sometimes worried that if they admit to having been conned, their relatives will question their mental capacity.
• The fact that the elderly are known to make a poor witness, as they often have declining memories and because they often don’t realize they were conned until much later.
• Being more interested to products that improve various physical functions.
How to Recognize a Scam and How to Protect Yourself from It
There are a number of different types of fraud that the elderly are particularly vulnerable for. This is why it is important to recognize them all. Tips to avoid these types of fraud have also been included.
1. Health Insurance Or Health Care Fraud
A number of specific fraud types exist within this category:
• Medical equipment fraud, whereby ‘free’ products are offered that the insurance company is then billed for.
• Rolling lab schemes, whereby fake and unnecessary tests are given in places, such as shopping malls or retirement homes, and these are then billed to the insurance company.
• Services not performed, where an insurance company is billed for services that never happened.
• Medicare fraud, which costs the country billions each year. This type of fraud happens in a variety of different ways, but essentially means that Medicare pays for something that doesn’t exist or that shouldn’t be paid for.
There are a number of ways to avoid this type of fraud:
• Do not sign blank forms.
• Do not give a medical provider blanket authorization for all services.
• Receive a written statement about what you have been charged and who pays for what.
• Look into the insurer’s benefits statement and ask questions if there is anything you don’t understand.
• Do not accept any type of medical treatment from telemarketers or door-to-door salesmen.
• Do not give your insurance details to anyone who hasn’t actually given you a medical service.
• Keep records of all appointments you have had.
• Ask whether any equipment has been ordered for you by your physician.
2. Counterfeit Prescription Drugs
The next scam that elderly people in particular need to be wary of are counterfeit prescription drugs. Avoiding this can be done by:
• Checking appearance. Look at whether the packaging looks correct and whether there have been any changes since your last prescription.
• Speaking to your physician or pharmacist if you have any concerns.
• Consulting with your physician or pharmacist as soon as you notice any side effects or if you do not get better.
• Always be cautious if you purchase drugs online. Do not buy from any online store that does not require a prescription. Check for the Verified Internet Pharmacy Practice Site seal, which is issued by the National Association of Boards of Pharmacy.
• Be suspicious of any drug that is available on ‘special offer’.
3. Funeral And Cemetery Fraud
Unfortunately, elderly people are also targeted by funeral and cemetery fraud. This can be avoided by:
• Making informed decisions. Check your options and ask others to help you with these decisions.
• Be educated about the different types of caskets and what is required by law for cremations and burials.
• Understand the basic fees, fees for additional services and professional fees.
• Be aware that embalming is not a legal requirement. The exact rules vary from one state to another.
• Read any contract and agreement before you sign it, so that you know your wishes will be adhered to.
• Understand the cancellation and refund terms and whether you can transfer your contract to a different funeral home if you so choose.
• Prepay only if you have all the necessary information. Make sure that your wishes are documented and shared with your loved ones.
• Never feel like you have to make a decision on the spot.
4. Fraudulent Anti-Aging Products
Naturally, elderly people are interested in anti-aging products, particularly because, as a society, we are living longer. However, this also means that the chance of being conned is higher as well. Hence:
• Anything that sounds too good to be true usually is. Do not believe in ‘secret’ formulas.
• Ask questions about any product that you are interested in so that you know what it does and doesn’t do.
• Looking into the different ingredients and check out the manufacturer and the product through the Better Business Bureau.
• Don’t believe miracle products can cure a wide range of diseases.
• Know that celebrity endorsements and customer testimonials are not always true.
• Be aware that almost all products have side effects.
• Don’t buy products that state you don’t need a physician’s visit before you use them. In fact, always consult with your physician first.
5. Telemarketing Fraud
Telemarketing fraud is common across the board, but particularly so in single women over the age of 60. Common scams include low cost health products and vitamins, free prizes, and cheap vacations. A number of lines are regularly used in some variation that are red flags for a telemarketing scam. These include:
• Act now or the offer will run out.
• You have won a free prize, but you must pay charges like postage and handling.
• You must provide your financial details (this will usually be said before you can actually consider the offer itself).
• There is no need for you to research the company.
• You do no need written information from the company.
• The offer is no risk and you can’t afford to miss it.
If you hear any of these statements, hang up immediately and report the issue with the FCC. Additionally, be aware that it is almost impossible to recover your money if you were cheated out of it through telemarketing fraud. Hence, to avoid becoming a victim:
• Log your telephone number with the National Do Not Call Registry.
• Never buy from a company you don’t know.
• Always ask for written information to be sent before purchasing anything, even if it is a charity.
• Always check companies with the Better Business Bureau and with Charity Watch if the telemarketer claims to be a charity. If it is a charity, make sure you find out what their efficiency is as well (how much of your donation actually goes to the cause itself).
• Make sure you have contact details for the company and representative that contacts you.
• Make sure that you know your money will be used in the way described. Ask for some sort of guarantee for this.
• Know that there is no such thing as ‘no risk’ investments, be that in real estate, stocks or other financial constructions.
• Never decide anything on the spot. If you feel pressured, simply hang up.
• Never make a decision unless you understand all the information.
• Never provide the caller with personal information about yourself.
• If you have already been a victim once, do not trust companies that pose as law enforcement officers or insurance companies that promise they will recoup your money for a fee.
6. Internet Fraud
Internet fraud was never a big concern among seniors, but this is now changing. The most common types of internet fraud include debit and credit card scams and non-delivery of purchased items. The FBI has dedicated a whole section of its website to this type of fraud. Information in terms of how to combat it and how to protect yourself are also included.
7. Investment Schemes
Senior citizens are often victims of investment schemes. They are targeted because they are either starting to approach or have reached retirement age. Common schemes include prime bank note schemes, advance feed schemes, the Nigerian letter scheme, and pyramid scheme. These types of schemes do not specifically target senior citizens, but it remains important to be aware of them.
8. Reverse Mortgage Scams
Consumers have been urged by the FBI and the U.S. Department of Housing and Urban Development Office of Inspector General (HUD-OIG) to be particularly vigilant of reverse mortgage scams. Between 1999 and 2008, home equity conversion mortgages (HECM), as they are known, have increased by 1,300 percent. Unfortunately, they are open to fraud. Fraudsters exist across all levels of the financial industry and their goal is to effectively steal either the property or the equity in the home of a senior citizen, quickly flipping the property.
Perhaps most worrying is the fact that seniors are targeted for these scams in places of trust and safety. These include community centers and even local churches. Additionally, scammers often openly advertise their services, which makes them look more legitimate. While a reverse mortgage is not always a scam, legitimate ones are always insured by the Federal Housing Administration. These also list the various requirements such a mortgage must meet, and how senior citizens can protect themselves from foreclosure.
Some additional tips to help seniors avoid these types of scams include:
• Always being suspicious about any unsolicited advertisement.
• Never believing anyone who says a home can be owned without making a down payment.
• Never signing anything that you don’t 100% understand.
• Never accepting payment from someone, whether they are known to you or not, for a property that you did not actually purchase.
• Always speak to an independent reverse mortgage counselor before you sign anything.
If you have been victimized by reverse mortgage fraud, you can contact your local FBI office or use its electronic tip line. You can also report the issue straight to the HUD-OIG or phone them on 1-800-347-3735.
Unfortunately, this list of scams and frauds is not exhaustive. Senior citizens are at greater risk of being victimized, with fraudsters taking advantage of their vulnerability. A number of important resources are available, however, including Resources from the United States Senate Special Committee on Aging and the USA.gov Resources for Seniors.