By Sandy Botkin CPA Esq. Author: “Achieve Financial Freedom: Big Time”, Special for USDR
“When a person of money meets a person of experience, the person with the experience will get some money, and the person of money will get some experience.”—Harvey Mackay
Sadly, scam artists rob people daily. However, targeting seniors is particularly effective because they generally are home to answer the phone, and they are generally too polite to hang up and are easily lured by great sounding deals. They also tend to be trusting and expect honesty in the marketplace. Many scammers pose as trustworthy helpers. They can be telemarketers, tradespeople or have a relationship with the targeted victim such as friends, family members, doctors, lawyers or even paid volunteer care givers.
An example involved my dad, who had a lady come to help him around the house and do some light house cleaning once a week. This lady stole some checks from my dad’s check book and tried to cash them at banks or use them for bills. My dad, who lives in Florida, told me that he gets at least 5 scam calls a day!
According to one study in 2009, estimates are that seniors lose approximately $2.6 billion per year as a result of financial abuse, fraud, as well as theft by family members and acquaintances.
Top scams are as follows:
1. Theft: Sometimes close family or caregivers have stolen property or even , as in my dad’s case, tried to cash checks. Sometimes, they forge signatures on legal documents, such as a will or deed or commit some other type of identity theft.
2. Phishing Scams: According to the U.S. Department of Justice, estimates are that dishonest telemarketers bilk people for an estimated $40 billion each year. The phone is used to solicit information in order to get credit card numbers or other personal data such as social security numbers. One famous scam involved supposed calls from the IRS alleging that the senior owes money or is entitled to a refund, but the IRS needs to confirm they are speaking to the right person. Thus, they ask for personal data.
Note: IRS nor any other government agency will ask you for your social security number or request payment over the phone via credit card. If you suspect this kind of fraud, hang up and call the agency that supposedly called you.
3. Unauthorized access to funds: Here you get alleged suitors who offer “romance” and care in order to be included in bank accounts or on property deeds. The suitor disappears once they get hold of the property. Thus, never make anyone a joint owner on any bank accounts of property unless you are absolutely sure that it is what you want to do. They have to be 100% trustworthy.
4. Charging excessively for a product or service: Scammers convince the senior that they need some goods or service and talk them into fixing something that didn’t need fixing or selling a product such as a hearing aid at exorbitant cost with high interest rates.
5. The latest scam perpetrated on seniors is the grandparent scam. This is so bold that it is hard to believe that it works. Grandparents are getting called by young kids who pose as their grandson or granddaughter. They usually say that they are in financial trouble or that there is an emergency and need cash or money wired. Usually these calls come in the middle of the night when the senior is tired or not thinking clearly. The caller might imply that they were traveling abroad (which can be gotten from Facebook postings) and was arrested. The scammers might even put an older man on the phone to pose as the phony policemen.
This scam has a lot of variations. For example, it might involve a call from a doctor that the grandchild is in the hospital and they need money wired to the doctor before any surgery can occur.
Note: IF you receive these types of calls, never send money until you reach your grandchild or another family member to see if the call is legitimate. Also, never wire money based on a request over the phone or in an email, especially overseas. Wiring money is like giving cash. Good luck trying to get it back. If you think you have been victimized, you need to contact the Federal Trade Commission, which not only forwards complaints to appropriate agencies, but also collects and analyzes the data.
Sandy Botkin CPA. Esq. is a financial and tax lecturer with Taxbot, an expense and mileage tracking application. He is also a former IRS attorney and lectured to IRS attorneys in the IRS Corporate Tax Division. He is the author of several books including “Achieve Financial Freedom: Big Time”