Scams, Especially Those Aimed at Seniors

Recently, there has been a scam in which someone with a good knowledge of banking has been calling elders, usually women, and posing as someone from their bank or credit union. These people will say: “I have terrible news, someone has gotten your account information and is taking all of the money out of your account over the internet.” After that, they will tell you that they can stop the action, but they need you to verify your account information. In reality, they are asking you for your account information so that they can then raid your account. Should this type of caller prey on you, do not give them the information, rather, say thank you and then hang up. Once you have hung up on the caller, call your bank or credit union branch and ask if there has been any strange activity on your account. Almost always, the answer will be no and you will have foiled the scam artist.

Similarly, elderly people that live in retirement homes should be aware of a new scam that has come to light. Criminals are calling individuals, usually women, who reside in retirement homes, and then pretend to be grandchildren in order to extort money. One of these crooks will call a retiree and say, “Hey Grandma, it’s Timmy. I’ve been in an accident. Do you think you could wire me some money so I can fix my car?” The unsuspecting woman then wires money through Western Union and the crook on the other end cashes and gets off scot-free. They can get away with the scam because Western Union does not require identification for wire transfers of $1,000 or less. If you have elderly parents living in a facilitiy, tell them know to hang up and call back to make sure the call is legitimate. The best way to stop this awful scheme is to be aware and to prevent it from happening in the first place.

The Los Angeles Times ran a series of stories about a new scam targeting the elderly that will shock you. Crooks have figured out that they can easily assume guardianship of aging people simply by telling a judge that they are no longer mentally stable. These people don't have to prove they are related, so they basically seek out elderly folks who are losing faculty and then go to court seeking guardianship. Family members have no idea that it's happening and have no recourse if it happens. Busy courts and judges don’t have time to make sure these crooks are above board, and there is no requirement to do so. So when the scamsters go to court seeking a ruling, it can happen quickly and the victims don’t even know it happens. We don’t know how these people get leads on their victims. But it’s up to children of aging parents to look out for them and make sure they are not being victimized. It’s easy to steal the money and very hard to get it back. Several legal forms can protect them, as well. First is the “Durable Power of Attorney for Health Care,” which allows someone to handle your health care issues if you cannot speak or act on your own behalf. The other edict is a regular “Durable Power of Attorney.” It allows the appointed person to take care of someone’s finances, which would make it more difficult for these crooks to step in and steal your parents’ assets. Having both of these in place is a great idea to ensure your parents are safe if you cannot always be there.

A marketing company based on Ohio known as the Annuity Service Center has been targeting seniors to scam them out of their money. What happens is the seniors go to their mailboxes and find something from the company. The notice tells the seniors that the annuity has reached the end of its service period and asks them to contact the company. It sounds very legitimate and convinces people to take action. But really, the organization is just trying to get leads to get into the seniors’ homes to sell them annuities. Sometimes the people don’t even own an annuity, but they call anyway. About 30,000 of these notices go out each day. Make sure to be aware that this scam is out there. Don’t let people into your home and cancel an appointment if you’ve made one. You don’t want to engage these people in any way.

Official-looking hoaxes in your mailbox: There is a trend in direct marketing right now to send very misleading, yet convincing mailings that could wipe out your wallet. The main target is senior citizens and they are old fashioned ways of taking advantage of you. They mailings look like they’re coming from an official government organization or department. A popular one today uses a logo that looks like the one from the Department of Housing and Urban Development. Really it’s just a pitch from a mortgage company to try and get you to refinance. Another one featured in the Washington Post looks exactly like an envelope from the U.S. Treasury, but it too is a refinance pitch. Many also look like correspondence from your bank or from some kind of “sweepstakes commission” or bureau that doesn’t exist. The Federal Trade Commission is very concerned about these scams, so warn your parents. These are all scams demanding payments, so be very careful.

List of worst scams

  1. Foreign Lotteries: The Dallas Morning News has a story about the “Unlucky Seven” worst scams out there, and lotteries are – without a doubt – No. 1. Spain, Germany and Holland are just three of the countries that supposedly have lotteries. An 86-year-old woman featured in the story ended up giving more than $88,000 to these crooks. She was told upfront she needed to cover “administrative costs.” Then, each time, it was something more. She never recovered her money, and the crooks were never caught. When you get these e-mails, you want to believe they are real. They certainly look it. But if they ask for money – even a little – to get you your money, it’s a scam. Throw the paperwork in the trash.
  2. Home Repairs: These people get upfront money and then do shoddy work or no work at all in some cases.
  3. Work-at-home scams.
  4. Phony charities.
  5. E-mail phishing scams.
  6. Services to recover from a scam. When you’ve already been scammed and a service offers to help you recover your money. The very same people who took your money the first time are the ones behind this, and you give them more trying to get it back.
  7. Variable annuities. If you don’t know what these are and you don’t have any, good. If you do, you don’t want to put any more money into these plans. They have massive commissions and are absolutely horrible for your wallet.
  8. “High yield investment” scams. These include exotic overseas investments that are a complete scam.
  9. Phony brokers. Just because someone says something is going to be a great investment doesn’t mean it will.
  10. Promissory notes – or fake CDs. These are promises that someone will pay you later if you give them money. But there is no guarantee, and it’s not safe.
  11. Ponzi schemes. These are schemes where criminals recruit people to pay back other people who have invested, and then you have to recruit someone once you’re in. Eventually, these collapse because there are no more people willing to “invest.” There a lots of people who will sell you sizzle, but that’s all it is.

Check out your loved one's nursing home. The federal government is going a step further and is now offering a service called Nursing Home Compare. It’s available on the Medicare Web site, medicare.gov, and it allows you to look up specific nursing homes for information about staffing, the quality of care and any deficiencies. The information is very specific and includes information such as “staff hours worked per resident per day,” the “number of residents in physical restraints.” It also rates each home on “mistreatment deficiencies” and “Quality care deficiencies,” including whether people with a history of abuse or neglect are hired and whether residents with certain conditions are being given proper treatment or are being watched carefully. Just go to the site, click on the “Nursing Home Compare” link, and then you can search by state, county, zip code or the specific nursing home name.

Medicare Part D, the prescription drug program that launched earlier this year is quite confusing. Well, crooks are taking advantage of that confusion and are trying to dupe seniors who are about to sign up for the program. Tons of information about these programs is showing up in mailboxes, so crooks have decided to start soliciting people over the phone for phony programs. Scams have popped up in Illinois, West Virginia and Missouri, according to the Kansas City Star. There are a lot of programs available and differing fees on top of that. So, crooks are joining in the game and are asking for seniors’ social security numbers and addresses. No one from Medicare should ask you for this information, so if you or your parents are getting calls BEWARE! The FBI is involved and is concerned about both fraud and ID theft. There are only 16 insurers in the program and the book you will get is called “Medicare and You.” If you are not happy with your plan, do your homework and go to medicare.gov for more information and be prepared to change plans during this year’s open enrollment.

The State Department of Human Resources reports that throughout the state seniors have been confronted with deceptive practices from insurance agents, regarding health insurance. These seniors have been misled and coerced into purchasing unnecessary insurance plans or plans that do not meet their needs. Here are some tips to avoid becoming a victim:

Joe and Alice had known Ernest for years. But when Ernest offered Joe the chance to make guaranteed big money, at no risk at all, Joe wasn't sure. Several of their friends had already made some money, and they all said that Ernest made it so easy. So Joe and Alice used more than half of their life savings and wrote a check to Ernest. Sadly, it didn't take long for their money to disappear.

Have you ever gotten a "great offer" or a "hot tip" on an investment? It might come from someone you know, someone you're related to-or it might just be a phone call you get out of the blue, an e-mail, or a pop-up ad online. The offers can be tempting. Maybe it's getting in on the ground floor of the next big box office hit. It could be a complex-sounding international monetary exchange deal. Maybe it's about an annuity, an oil lease, or even some rare coins that are sure to grow in value.

Before you hand over your hard-earned money, do your homework. Brush up on the warning signs that you should watch out for, and follow some steps before you invest.

Warning Signs

Investment scams can take many shapes-and they'll be really tempting. Whatever the scam, scammers use some of the same tactics to get you hooked. Listen for phrases like these. When you hear any of these pitches, heed the warning that you're looking at a scam:

These lines are tricks of the trade for scammers. Even if you know that there are no guarantees in life–much less in investing–scammers use these lines and promises everyday to convince unsuspecting investors to part with their money.

It's their business to convince you to part with your money. These lines help them do it. If you hear any of these lines, or feel pressured, STOP! Take your time and check it out. A good deal (that's a real deal, not a scam) will still be there. And, most important, remember that if a deal sounds too good to be true, it probably is!

Check Before You Invest

No matter what that "great opportunity" is–or who offers it to you–there are steps you should take before you invest your money. It doesn't matter whether the offer comes from a financial professional, a pop-up ad, your brother-in-law, a stranger on the phone, a friend, the nice young man at your church, or anyone else. The steps are the same.

Here's what you'll want to check before you part with your money:

Once you check with your state securities regulator or the SEC, you can decide if the investment (if it really is an investment) is the right one for you.

To take a quiz on Investment Fraud Awareness, go to: http://www.nasaa.org/investor_awareness_quiz/index.cfm

Bill’s first hint that something was wrong was when he applied for a new car loan. Although his credit was always excellent, he was turned down for the loan. When he asked why, the auto dealer told him that he had too much debt to take on any more.

Shocked, Bill checked his credit report to find out what was going on. His credit report showed that in the past month he had charged $29,000 to his credit cards for new appliances and furniture and $4,000 for clothes. He also had applied for a line of credit on his house and charged an expensive trip to it. Stunned, Bill stammered that he had charged almost nothing the previous month.

Five years later Bill is still fighting the effects of identity theft. It’s taken him more than 100 hours to clear his name and retrieve his excellent credit rating. “Although I didn’t lose a penny,” he said, “it cost me hours of frustration and anxiety and even today companies still turn me down when I apply for a new credit card. It’s a nightmare.”

Identity theft is big business. Losses to businesses total $50 billion annually, the Federal Trade Commission reports. In the last five years, 27 million Americans have had their identities stolen. To those whose identity is stolen, the aftermath is aggravation, confusion and hours of wasted time.

You, too, could be a victim of id theft. It occurs when someone pretends to be you, using your Social Security number, your credit cards and your bank account numbers to borrow money, open new credit card accounts or charge thousands of dollars to buy cars, clothes or vacations.

Stealing Your Good Name

The identity thief gets your personal information in many inventive ways. Rings of identity thieves often go to city dumps or apartment dumpsters to comb through trash to get receipts with names and financial information.

Email fishing expeditions are another way. Pretending to be eBay users or businesses you have used, the crooks email you saying that a question about your account has come up and they just want to make sure your information is correct.

Identity thieves are skilled liars. Identity thieves also do the following:

Guarding Yourself

In the face of the increasing epidemic of id theft, what can you do? The first thing is to get as much information about identity theft as you can. Read articles in the newspapers and magazines. Watch TV programs that discuss identity theft. Check your credit report at least once a year and correct any errors.

Next, don't give out your Social Security number unless it's absolutely required, for example by the federal or state governments. Don't have your number printed on your checks. Get a new driver's license that doesn't show your number. Some businesses routinely include Social Security numbers on their application forms, for example, a well-known video rental chain. Ask any business why it needs your number. When customers resist, managers usually waive it.

Other steps you can take include:

It is always wise to keep tabs on your credit report. In Georgia, we are entitled to two (2) free credit reports per year from each credit reporting agency. The following explains how to obtain the reports:

It’s a credit healthy thing to do—and now it's free. Creditors determine whether to give you credit or a loan—and how much you will pay—based on information in your credit history. The national credit bureaus (now called consumer reporting companies) collect information from your creditors about how many credit cards and loans you have and how many accounts are late, overdue, or in collection. They sell information in your file to creditors who determine if you get a loan and how much interest you’ll pay on a credit card. This information about how much credit you have and how you pay your bills can even be used to decide if you get a job, new cell phone service, an apartment lease, or car insurance.

Even if you think your credit history is good, you still should get a copy of your report. You might find anything from old accounts to errors to outright identity theft. You shouldn’t be the last to know what’s in your file. That’s especially true now that you can get free copies of your credit reports from the three major consumer reporting companies (Equifax, Experian, and TransUnion).

How to Order

You can order your free reports three ways:

Important advice:

How do I correct a mistake on my file? If you find something wrong in your file, you need to tell the consumer reporting company what information is inaccurate. It is best to do this in writing. Use certified mail so you can prove you sent the dispute. If you have documents that support your claim, send copies—not the originals. The company has to investigate your claim and report back to you. You will also get another free credit report if your claim changes your file. You should also write to the creditor that provided the information to the consumer reporting company that you are disputing information it gave.

Here are the addresses and phone numbers for disputes.

Equifax
P.O.Box 740256
Atlanta, GA 30374
(800) 797-7033 (9:00 am to 5:00 pm in your time zone)

Experian
NCAC P.O. Box 9595
Allen, TX 75013
(800) 583-4080 (9:00 am to 5:00 pm in your time zone)

TransUnion
P.O. Box 200
Chester, PA 19022-2000
(800) 916-8800 (8:30 am to 4:30 pm in your time zone)

Resources used in preparation of this paper:

AARP- www.aarp.org
Clark Howard - http://clarkhoward.com/
Georgia Dept of Human Resources – www.dhr.state.ga.us

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