Five Common Scams Aimed at Seniors (and How to Avoid Them)
Fraudsters and identity thieves prey on all types, but some of the most vulnerable – and often targeted by these criminals – are the elderly. From compelling advertisements for “reverse mortgages” to aggressive calls purporting to be from the government, these are some of the most common types of fraud aimed at older people and how to avoid them or help your relatives avoid them.
We’ve talked about how to protect yourself from identity theft both online and offline , but some of these scams don’t come in the form of email you can filter or people rummaging through your trash. These scammers will call you and pretend to be a government official or threaten with fines or jail time. Other times, they will sell a good-sounding but terrible financial product in commercials during your favorite reruns. Here are some of them to watch out for.
Reverse mortgage advertising
Despite its confusing name, “ reverse mortgage ” is just another type of home equity loan . The key point here is that the loan does not have a monthly payment. Instead, the accrued interest is simply added to the loan balance every month, and the entire loan balance must be paid back when the borrower dies or when they sell or move from home. You can see right away why banks – especially predatory banks – target these types of loans to seniors. Basically, they can use the equity in their home, get some money, and – presumably – don’t have to give it back or leave it to wealthy family members to pay for when the house is sold. after passing them.
However, there are many problems with this type of loan. First, the name “reverse mortgage” hides the fact that it is actually a loan that you take out – that you or your family will have to pay back. Second, many of these advertisements use celebrity endorsements and images that make them look like government benefits, when these types of loans are not government-related at all and the celebrity “endorsement” is just an actor trying to make money.
Worst of all, these ads use phrases like “you will never lose your home” to make you feel safe. In fact, you could very well lose your home, and the fine print (often hard to read) explains how to do it. If you run out of capital to use before you die or sell your home, you will have to repay the loan back, and if you cannot, the lender will foreclose you. Likewise, if you move for any reason, such as a retirement home or hospice, the loan is repayable, and if your family cannot pay, the lender can revoke the foreclosure. Likewise, the loan comes after you die, so your family will have to pay off this loan while paying for the funeral and funeral at the same time.
The bottom line is this: Reverse mortgage advertising is designed for predation. Some of them specifically mention important details like interest rates or conditions . Like any other financial product, they can be great tools when used correctly, but for most people the extra money may not be worth the headache for you or your family, especially when you have other, more open options. To find out more, check out this article from the Consumer Financial Protection Bureau .
Calls “IRS”
The phone rings, and when you pick it up, you hear a hearty but serious voice on the other end of the line saying that they are calling from the IRS and that you owe them hundreds, perhaps thousands of dollars in taxes. They say that you need to pay the debt right away, otherwise they will have to call the police or you will be evicted from your home. They insist on receiving payment by phone or bank transfer and immediately request your bank account information. In addition, they may tell you that they owe you money, and your only chance of getting a refund is to give them your bank account number and routing number right now.
If this sounds funny, it should be. Unfortunately, this particular scam is quite common, especially during tax season, when the IRS has repeatedly stated that it will never call you to say that you owe them money. They always use registered mail. If the IRS owes you a refund, they’ll just send it to you – they won’t call. The problem with this scam is that the scammers are usually very aggressive, target seniors specifically and refuse to give you any opportunity to verify their claim. They threaten to either call the police immediately, or if you hang up, they won’t be able to process your refund. This does not mean: “I will call you back” or “Let me draw up the documents.” If you rely on Caller ID to help you here, that might not help much either – often, these scammers spoof real phone numbers and area codes to make them appear legitimate.
In short, if you have formal business with the tax inspector, the IRS will not call you and will never ask for money over the phone. However, you can always call them on any of their hotlines or toll free numbers if you receive a suspicious call.
Trap “Your child / grandchild / etc. Needs money”
Another scam aimed almost exclusively at seniors is phone calls that no one wants to answer. You pick up the phone and the person on the other end of the line says that your son or daughter, niece or nephew, grandson or other relative is in trouble and needs your help. Sometimes they are in jail, and this is their “lawyer” or another representative, sometimes they go to the hospital after an accident, and the nurse calls on the line.
Of course, the person you are talking to says that they are assigned by your relative and they can process money and any other personal information (like social security numbers or addresses) they need to “help.” As is the case with most scams of this type, pressure is exerted and the scammer plays on your fears to get you to descend into the caves. You wouldn’t risk your loved one being locked up or unable to receive medical attention, right? This is the essence, and the scammer will play on both the false urgency of the call and that thinking to get you to give. In some cases, they even pretend that a distant relative, like a great grandson, or a long-lost nephew or niece, using only the information they can get from Facebook or other social networks – all in order to steal some money from you.
Whatever the situation, it is supposedly dire, and there is a reason why you cannot speak directly to your relative or someone you really know. Of course, you can’t call them back either. This should be your biggest wake-up call – if you can’t call someone back, it’s almost always a scam. Even if you can, you should never disclose financial or personal information over the phone, especially if you cannot speak to the person who reportedly needs it. If your loved one is in prison or in the hospital and someone calls on his behalf, he must provide you with detailed information about the person’s condition, where he is, how you can contact him, etc. The scammer will not stand these kinds of questions.
Medicare or prescription drug fraud
These scams happen by email or phone, and they are pretty simple: The person who contacts you claims to represent the government or a company authorized by the government to issue Medicare or prescription drugs. They will offer to save money on prescriptions or send you medical equipment and bill Medicare. In any case, their offer must be accepted urgently, and prices are limited in time. In any case, you pay, you get nothing, and they disappear with your money.
In the case of prescription drugs, some of these scammers may send you something , but it is often counterfeit, or vitamins in prescription bottles. Some of these scammers use social media to collect information about you or may simply call you. Either way, it’s natural to look for affordable prescription drug options or look for affordable healthcare providers, but remember – you’ll have to do your homework and call, not the other way around. In this case, the old adage “if it seems too good to be true, it probably is,” rings true, and it is best to remember that if someone calls you to suggest something, it is best to refuse and leave. or at best, take their info and do your own research before opening your wallet.
Funeral parlor or obituary scam
Probably the worst of many, these scams are designed to target spouses and families of the recently deceased. In short, a scammer or scammer will read obituaries in local newspapers and then, in the event of a scam, contact a spouse or family to claim a fake debt or offer their “services.”
There are two types of infamous funeral homes. The first are those who are trying to rob you of your money, even if you are already doing business with them. They will resell you expensive coffins, large funeral rooms or tons of unnecessary services (like a cremation coffin) and will play on your emotions to make you spend more money in an already emotionally vulnerable period of your life. … Others read obituaries and rush to offer things that your current funeral home might not offer, such as special coffins or additional post-funeral services such as plaques or other high-value items that your current funeral home may not have offered.
In any case, the main thing is to prepare in advance . Talk to your loved ones and make sure you know what they want – and what you want – after they leave. Thus, no one can take advantage of you. This can be tricky, especially with conflicting family interests, but stick to your guns and don’t let cold calls or outsiders influence your decisions, especially if they have nothing to do with your family. Anyone with a debt to your deceased loved one can (and should) notify you in writing and make sure your funeral is chosen and planned ahead of time.
These are just a few of them, and you may notice that most of them have a common theme: most of them are conducted over the phone. You can fight back most of them by getting yourself on the FTC’s call- barring list, but frankly, illegal scammers dealing with your money are probably not motivated to comply with the law when it comes to a call-barring list.
You can avoid some of these calls by switching to mobile phones (wireless numbers are harder to get and easier to block callers), or by using one tactic that always works for me: don’t answer a phone call if it’s a number you’re not using. I will find out. Google the number and see what appears. If it’s a scammer, you’ll see it pretty quickly in the first few results. If the call is really important, they will leave a message and you can contact them again after verifying how legitimate the caller was.