The local law enforcement
agencies intend to make seniors fully aware of the many scams often perpetuated
against them by con artists. They help seniors avoid becoming victims of
consumer fraud, emphasizing that the most effective way to attack this problem
is through prevention.
Senior citizens in the
county and across the state are easy targets for con artists. Seniors own more
than half of all financial assets in America. At the same time, they are
vulnerable. While people over 65 comprise 11 percent of the U.S. population,
they represent roughly 30 percent of scam victims, according to a U.S.
Subcommittee on Health and Long-Term Care. As a result, seniors lose billions of
unrecoverable dollars each year to fraud.
victimization of older people in connection with consumer fraud is partly
attributable to generation and economic factors. Seniors grew up in an era when
business was done on a handshake. Further, a study by the American Association
of Retired Persons has found that older people are quicker to believe promises
and slower to take steps to protect their legal rights. Since seniors often save
money for retirement, they often have money on hand.
Although most seniors in
the county are not poor, many have saved for retirement through long years of
work. In fact, Social Security is the main source of income for a majority of
older residents in the county. With fixed monthly Social Security or pension
checks, it is nearly impossible to replenish bank accounts emptied as a result
There are many common
practices con artists use to defraud seniors, but most are a variation of these
three: telemarketing, mail and door-to-door sales. While many scams involve both
mailings and telemarketing, some use all three methods. For example, many con
artists will generate leads by mailing a survey to gauge interest in a product
or service. Consumers who show interest, usually by returning a postcard, are
then contacted by telephone or a traveling salesperson who makes the sales
Below are examples of
current consumer scams you should be aware of. Study the examples and learn the
warning signs of a con artist at work. This knowledge will help to thwart
activities of con artists.
Improvement Schemes: The home improvement worker may drive a car or
truck through a neighborhood where seniors live looking for residents
outside of their home. The worker offers to pave the driveway, repair the
roof, or paint the house with supplies "left over from another
job". In some cases, services may be offered through ads, fliers, or
handouts. The work is then completed quickly and is often shoddy. A warning
sign to the consumer is when the worker announces a serious problem. You
should also be aware of any offer that is good only for that particular day,
a demand of cash payment, or a refusal by the home improvement worker to
note that if you are confronted with such suspicious behavior, you should
contact the Police immediately. Also, before signing a contract for home
repairs, get a second opinion and take at least 24 hours to consider the
Trusts: A living trust is designed to allow the maker to identify his or
her heirs and to share with them money or other possessions upon death of
the maker. Often seniors are targeted by unsolicited visits, phone calls,
and mail. In addition, a number of seniors are targeted by unsolicited
visits from untrained salespeople who tell them they need a living will or
trust. The salesperson will offer membership into an organization that
falsely alleges that probate can be avoided through a living trust.
salesperson will often emphasize that a living trust avoids inheritance tax to
heirs. The membership organization will often offer prepaid legal benefits,
medical benefits, and other services that are grossly exaggerated and often are
not honored when needed. A warning sign to seniors regarding this type of scam
is when membership offers "peace of mind benefits" that seem too good
to be true. If the benefits seem too good to be true, they probably are not
true. Contact an attorney to have a living trust drafted. Do not rely on
door-to-door sales or accepted unsolicited offers by telephone or through the
Repair: Auto repair scams upon seniors are lucrative for the con
artists. Several characteristics of auto repair scams are when the facility
does not give written estimates or a completion date for the repair.
Further, the facility does not make replaced parts available and performs
repairs not contracted for. When the senior citizen goes to pick up the
automobile, the repair person presents a bill much larger than expected. The
repair person then holds the auto until the bill is paid in full. Be aware
of warning signals that may help you from becoming a victim of auto repair
a facility refuses to warranty the work or fails to offer a work or a
satisfaction guarantee to the customer, you should steer away from that
facility. Another warning signal is if the repair facility fails to get
authorization to use rebuilt parts as opposed to new parts or if there is a
constant delay in returning the car.
Senior citizens are an
integral part of the community. Through education and awareness, seniors can be
empowered to use reasonable precautions in avoiding con games and scams.
Fraud Target: Senior Citizens
Citizens should be aware of fraud schemes for the following reasons:
Senior citizens are most
likely to have a “nest egg,” to own their home, and/or to have excellent
credit—all of which make them attractive to con artists.
People who grew up in the
1930s, 1940s, and 1950s were generally raised to be polite and trusting. Con
artists exploit these traits, knowing that it is difficult or impossible for
these individuals to say “no” or just hang up the telephone.
Older Americans are less
likely to report a fraud because they don’t know who to report it to, are too
ashamed at having been scammed, or don’t know they have been scammed. Elderly
victims may not report crimes, for example, because they are concerned that
relatives may think the victims no longer have the mental capacity to take
care of their own financial affairs.
When an elderly victim
does report the crime, they often make poor witnesses. Con artists know the
effects of age on memory, and they are counting on elderly victims not being
able to supply enough detailed information to investigators. In addition, the
victims’ realization that they have been swindled may take weeks—or more
likely, months—after contact with the fraudster. This extended time frame
makes it even more difficult to remember details from the events.
Senior citizens are more
interested in and susceptible to products promising increased cognitive
function, virility, physical conditioning, anti-cancer properties, and so on.
In a country where new cures and vaccinations for old diseases have given
every American hope for a long and fruitful life, it is not so unbelievable
that the con artists’ products can do what they claim.
What to Look For and How to Protect Yourself and Your Family
Health Care Fraud or Health Insurance Fraud
Medical Equipment Fraud:
offer “free” products to individuals. Insurers are then charged for products
that were not needed and/or may not have been delivered.
“Rolling Lab” Schemes:
Unnecessary and sometimes
fake tests are given to individuals at health clubs, retirement homes, or
shopping malls and billed to insurance companies or Medicare.
Services Not Performed:
Customers or providers bill
insurers for services never rendered by changing bills or submitting fake ones.
Medicare fraud can take the
form of any of the health insurance frauds described above. Senior citizens are
frequent targets of Medicare schemes, especially by medical equipment
manufacturers who offer seniors free medical products in exchange for their
Medicare numbers. Because a physician has to sign a form certifying that
equipment or testing is needed before Medicare pays for it, con artists fake
signatures or bribe corrupt doctors to sign the forms. Once a signature is in
place, the manufacturers bill Medicare for merchandise or service that was not
needed or was not ordered.
Tips for Avoiding Health Care
Fraud or Health Insurance Fraud:
Never sign blank insurance
Never give blanket
authorization to a medical provider to bill for services rendered.
Ask your medical providers
what they will charge and what you will be expected to pay out-of-pocket.
Carefully review your
insurer’s explanation of the benefits statement. Call your insurer and
provider if you have questions.
Do not do business with
door-to-door or telephone salespeople who tell you that services of medical
equipment are free.
insurance/Medicare identification only to those who have provided you with
Keep accurate records of
all health care appointments.
Know if your physician
ordered equipment for you.
Tips for Avoiding Counterfeit
Be mindful of appearance.
Closely examine the packaging and lot numbers of prescription drugs and be
alert to any changes from one prescription to the next.
Consult your pharmacist or
physician if your prescription drug looks suspicious.
Alert your pharmacist and
physician immediately if your medication causes adverse side effects or if
your condition does not improve.
Use caution when
purchasing drugs on the Internet. Do not purchase medications from unlicensed
online distributors or those who sell medications without a prescription.
Reputable online pharmacies will have a seal of approval called the Verified
Internet Pharmacy Practice Site (VIPPS), provided by the Association of Boards
of Pharmacy in the United States.
Be aware that product
promotions or cost reductions and other “special deals” may be associated with
counterfeit product promotion.
Funeral and Cemetery Fraud
Tips for Avoiding Funeral and
Be an informed consumer.
Take time to call and shop around before making a purchase. Take a friend with
you who may offer some perspective to help make difficult decisions. Funeral
homes are required to provide detailed general price lists over the telephone
or in writing.
Educate yourself fully
about caskets before you buy one, and understand that caskets are not required
for direct cremations.
Understand the difference
between funeral home basic fees for professional services and any fees for
Know that embalming rules
are governed by state law and that embalming is not legally required for
Carefully read all
contracts and purchasing agreements before signing and make certain that all
of your requirements have been put in writing.
Make sure you understand
all contract cancellation and refund terms, as well as your portability
options for transferring your contract to other funeral homes.
Before you consider
prepaying, make sure you are well informed. When you do make a plan for
yourself, share your specific wishes with those close to you.
As a general rule
governing all of your interactions as a consumer, do not allow yourself to be
pressured into making purchases, signing contracts, or committing funds. These
decisions are yours and yours alone.
Fraudulent “Anti-Aging” Products
Tips for Avoiding Fraudulent
If it sounds too good to
be true, it probably is. Watch out for “Secret Formulas” or “Breakthroughs.”
Don’t be afraid to ask
questions about the product. Find out exactly what it should and should not do
Research a product
thoroughly before buying it. Call the Better Business Bureau to find out if
other people have complained about the product.
Be wary of products that
claim to cure a wide variety of illnesses—particularly serious ones—that don’t
appear to be related.
Be aware that testimonials
and/or celebrity endorsements are often misleading.
Be very careful of
products that are marketed as having no side effects.
Question products that are
advertised as making visits to a physician unnecessary.
Always consult your doctor
before taking any dietary or nutritional supplement.
If you are age 60 or
older—and especially if you are an older woman living alone—you may be a special
target of people who sell bogus products and services by telephone.
Telemarketing scams often involve offers of free prizes, low-cost vitamins and
health care products, and inexpensive vacations.
There are warning signs to
these scams. If you hear these—or similar—“lines” from a telephone salesperson,
just say “no thank you,” and hang up the telephone:
“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
“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
“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 the company or its references.”
“You can’t afford to miss
this high-profit, no-risk offer.”
Tips for Avoiding Telemarketing
It’s very difficult to get
your money back if you’ve been cheated over the telephone. Before you buy
anything by telephone, remember:
Don’t buy from an
unfamiliar company. Legitimate businesses understand that you want more
information about their company and are happy to comply.
Always ask for and wait
until you receive written material about any offer or charity. If you get
brochures about costly investments, ask someone whose financial advice you
trust to review them. But, unfortunately, beware—not everything written down
Always check out
unfamiliar companies with your local consumer protection agency, Better
Business Bureau, state attorney general, the National Fraud Information
Center, or other watchdog groups. Unfortunately, not all bad businesses can be
identified through these organizations.
Obtain a salesperson’s
name, business identity, telephone number, street address, mailing address,
and business license number before you transact business. Some con artists
give out false names, telephone numbers, addresses, and business license
numbers. Verify the accuracy of these items.
Before you give money to a
charity or make an investment, find out what percentage of the money is paid
in commissions and what percentage actually goes to the charity or investment.
Before you send money, ask
yourself a simple question. “What guarantee do I really have that this
solicitor will use my money in the manner we agreed upon?”
Don’t pay in advance for
services. Pay services only after they are delivered.
Be wary of companies that
want to send a messenger to your home to pick up money, claiming it is part of
their service to you. In reality, they are taking your money without leaving
any trace of who they are or where they can be reached.
Always take your time
making a decision. Legitimate companies won’t pressure you to make a snap
Don’t pay for a “free
prize.” If a caller tells you the payment is for taxes, he or she is violating
Before you receive your
next sales pitch, decide what your limits are—the kinds of financial
information you will and won’t give out on the telephone.
Be sure to talk over big
investments offered by telephone salespeople with a trusted friend, family
member, or financial advisor. It’s never rude to wait and think about an
Never respond to an offer
you don’t understand thoroughly.
Never send money or give
out personal information such as credit card numbers and expiration dates,
bank account numbers, dates of birth, or social security numbers to unfamiliar
companies or unknown persons.
Be aware that your
personal information is often brokered to telemarketers through third parties.
If you have been
victimized once, be wary of persons who call offering to help you recover your
losses for a fee paid in advance.
If you have information
about a fraud, report it to state, local, or federal law enforcement agencies.
As web use among senior
citizens increases, so does their chances to fall victim to Internet fraud.
Internet Fraud includes non-delivery of items ordered online and credit and
debit card scams. Please visit the
FBI’s Internet Fraud webpage for details
about these crimes and tips for protecting yourself from them.
As they plan for retirement,
senior citizens may fall victim to investment schemes. These may include advance
fee schemes, prime bank note schemes, pyramid schemes, and Nigerian letter fraud
Reverse Mortgage Scams
The FBI and the U.S.
Department of Housing and Urban Development Office of Inspector General (HUD-OIG)
urge consumers, especially senior citizens, to be vigilant when seeking reverse
mortgage products. Reverse mortgages, also known as home equity conversion
mortgages (HECM), have increased more than 1,300 percent between 1999 and 2008,
creating significant opportunities for fraud perpetrators.
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 or to use these seniors to unwittingly aid the
fraudsters in stealing equity from a flipped property.
In many of the reported
scams, 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
A legitimate 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 balance. See the FBI/HUD Intelligence Bulletin for
specific details on HECMs as well as other foreclosure rescue and investment
Tips for Avoiding Reverse
Do not respond to
Be suspicious of anyone
claiming that you can own a home with no down payment.
Do not sign anything that
you do not fully understand.
Do not accept payment from
individuals for a home you did not purchase.
Seek out your own reverse
SENIOR ADVOCATE FRAUD EDUCATION