Preying on Trust
Older people are targeted by fraudsters in all sorts of ways. Here, we’ve highlighted the 10 most prevalent. (An excerpt of the artilce, as shared in the April 2017 edition of Independent Banker magazine.)
1. Medicare/health insurance scams: In a 2016 report, The Medicare Fraud Strike Force had 2,185 indictments against Medicare fraudsters, who falsely assume the identity of a provider or Medicare representative and demand payment for services.
2. Counterfeit prescription drugs: Seniors may seek ways to obtain less-expensive drugs, by ordering online and receiving placebo or modified drugs in place of prescriptions. In 2015, the FDA reported that a multi-country effort took down more than 2,400 websites selling counterfeit or dangerous illegal medical products.
3. Funeral and cemetery scams: These scams may be committed by strangers alleging the deceased had outstanding debt. They also may result when funeral directors charge for unnecessary services. The FTC’s “Funeral Rule” details consumer rights.
4. Fraudulent antiaging products: The FBI reports, “Senior citizens are more interested in and susceptible to products promising increased cognitive function, virility, physical conditioning and anticancer properties.” Fraudsters take advantage by promising unobtainable results for a fee.
5. Telemarketing and phone scams: “Our research shows telemarketing fraud is still a big problem,” says Colleen Tressler, senior project manager, Division of Consumer and Business Education of the FTC. Telemarketing and phone scams use a sense of urgency to collect payment information in real time.
6. Internet fraud: From email and phishing to tech-support scams, as seniors engage digitally, fraudsters take advantage. Tressler says, “While older consumers may be using tablets and computers, they may not fully understand how they work and how divulging certain information may make them more vulnerable.”
7. Investment schemes: This plays on seniors’ financial dreams. Carole Feeney, of Community Bank of Bergen County, N.J. comments to this as she sees it first hand, “Our older customers want to make that extra money to leave for their children, and they just fall for it. They are so trusting,” she says.
8. Homeowner/reverse mortgage scams: Targeting a population that may be looking to sweeten retirement, fraudsters impersonate lenders and offer deals in exchange for immediate payment. With the National Reverse Mortgage Lenders Association reporting that the Reverse Mortgage Market Index reached an all-time high in 2016, these scams become more prevalent.
9. Sweepstakes and lottery scams: These scams feed on the excitement of winning. Fraudsters send a check with instructions to wire slightly less than the amount of the check to subsidize processing. The money goes out, and the check bounces. “The multitude of checks we get from ‘lottery winners’ is astounding. “We have to tell them it’s fraud,” Feeney says.
10. The grandparent scam: In this instance, a caller pretends to be someone’s grandchild, asks for money to be sent, and begs the “grandparent” not to tell anyone. “The ‘grandchild’ has a gambling or other addiction problem and ‘grandma’ has the money. It breaks my heart but we hear about this every day,” says Lori Miller, vp/marketing and communications at CRA Partners (a compliance program powered by the Senior Housing Crime Prevention Foundation).
Information Source- Author: Morrison, Colleen. “Older, but not always wiser.” Independent Banker April 2017: Pages 78, 80. Print.