Learn How to Protect Yourself & Your Loved Ones
Financial fraud affecting the nation’s elderly population isn’t merely a story you see on the evening news. It’s a growing problem, and statistically, it could happen to you or someone you know.
A study by the MetLife Mature Market Institute reveals alarming details: 20 percent of Americans over the age of 65 have already been the victims of financial fraud and it costs those victims more than $2.6 billion a year.
Sometimes fraud against the elderly is perpetrated by a stranger, but sometimes, people in a position of trust take advantage of the elderly too.
Family members, friends and caregivers all have a role to play in protecting loved ones. It’s important to know how you can identify and thwart financial fraud by understanding how different types of fraud happen and what you can do to help.
Types of Fraud
We’ve all heard stories of seniors losing their retirement savings through different types of fraud: foreign lotteries, telemarketing schemes, identity theft, Social Security fraud and others. According to estimates by Consumer Action, a consumer education and advocacy group, while seniors 60 and older make up 15 percent of the U.S. population, they account for roughly 30 percent of fraud victims.
Why is our senior population so vulnerable to fraud?
Accessibility and Isolation: Seniors tend to be home more often, are typically alone, and may be isolated from family and friends. According to anecdotal reports, criminals may be targeting seniors using Internet mapping and personal identification tools. The reports suggest that scammers have improved their ability to locate senior communities and target their residents.
Trust: Seniors tend to be more trusting, more easily intimidated and less apt to be rude. People in their 80s and 90s with no experience with scammers are frequently too trusting and believe whatever is said or what they read. Often can’t tell the difference between a scammer’s offer and official mail. Additionally, their thriftiness may betray them into entering sweepstakes and lotteries with promises of winnings.
Assets: Many seniors have a substantial amount of savings used to supplement their retired living.
Tips to Spot and Stop Fraud
With so many different types of fraud, it can be hard to know what to be on the lookout for. And financial fraud comes disguised in many forms. Maybe someone knocks on your door and offers to seal your driveway, clean your gutters or repair your roof. Or perhaps a very nice sounding charity is asking for a donation to help underprivileged children.
Are these legitimate? Maybe. But then again, maybe not. How do you know?
Here are a few tips to help you and your loved ones identify and avoid fraud:
• If it seems too good to be true – it is. The better something sounds, the more likely it is a scam. The first approach by many scammers to seniors is frequently made in the mail with notifications that they have won money or some other valuable prize. If the person who is targeted responds, the criminals obtain the phone number and start calling, especially in the afternoon when they know seniors are napping or just waking up from a nap. From lures of winnings the criminals progress to threats. They may even find family members’ names on the internet and threaten a senior’s loved ones. Any offer by mail or over the phone that promises money or prizes is probably worthless at best or an attempt to lure someone into a costly scam. Don’t respond to them.
• Never give out personal information. Whether it’s over the phone, through the mail, or someone they meet face-to-face, never to give out any personal details, especially to anyone you do not know or just met. Make sure the offer is legitimate. No matter what someone is selling, or how legitimate the offer sounds write down the individual’s contact information and then follow up to make sure you are receiving legitimate information.
• Don’t be afraid to say: No. It’s OK to say no and simply hang up the phone or close the door. If it sounds too good to be true, it probably is. Take your time when investigating an offer or even a charitable donation. If someone is offering a legitimate product or service, they will have no problem waiting.
• Be involved. Be aware. Become familiar. Help your loved one by learning more about their finances. If there is unusual activity in a bank account, you’ll be able to recognize it more quickly.
• Use a witness. Do not allow your loved one to sign any legal documents unless another trusted family member or friend is there to witness.
• Who is hanging around? If a new caregiver or friend tries to become involved in an elderly person’s finances, this could be a red flag for potential fraud. Get to know the people your loved ones know.
• Take advantage of technology. How can you reduce the possibility that Social Security checks or other checks go missing? Use your bank’s direct deposit service to send funds safely and securely to a bank account.
Dollars & $ense is a regular column on personal finance prepared and distributed by certified public accountants from the Oregon Society of CPAs (www.orcpa.org). For more money tips, follow ‘Oregon Saves’ on Facebook: facebook.com/OregonSaves.