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Top Scams Aimed at Senior Citizens

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Unfortunately, scam artists are all too aware that seniors are easy targets. In fact, according to the Federal Trade Commission, 25 million seniors were victims of fraud in 2008. Seniors are easy targets for scammers because of three main factors: they are easy to reach by phone, they are often home during the day, and they are more willing than most people to talk to strangers.

Overall, there are seven "popular" methods of scamming senior citizens, including prepaid funeral scams, with which senior citizens in Michigan are all too familiar. For example, I recently wrote about the now-defunct Ziomek Funeral Home that scammed over 60 older Michiganders into purchasing prepaid funerals. Overall, the Ziomeks stole over $250,000 from individuals who purchased pre-paid funerals or cremations. In addition to pre-paid funeral scams, scammers also employ the following tactics to scheme seniors:

  1. Reverse equity mortgage scam: with the stock market crash and housing collapse, many senior citizens don’t have as much in savings to fall back on. Instead, they are turning to reverse mortgages because lenders make it seem as if a reverse equity mortgage is an "easy way to make money". However, the FBI recently issued a warning against reverse mortgages and discovered that, since 1999, these types of scams have risen by 1,300%. The Government Accountability Office and the FBI warn that seniors should be careful to ensure that they are working with a reputable and legitimate company before moving ahead with a reverse equity mortgage.
  2. Fake e-mails from the Social Security Administration: these emails appear to be real, even going so far as to use a ".gov" e-mail address, and claim that there is something wrong with a senior’s Social Security benefits. However, these e-mails are not from the Social Security Administration–the agency DOES NOT contact consumers via e-mail.
  3. Impersonating a grandchild in trouble: sounds pretty low, doesn’t it? Unfortunately, scammers have found a new way to trick grandparents into sending money when their "grandchild" is in some sort of financial trouble. For example, the scammer finds a senior to prey on and then calls and pretends to be a grandchild with "car trouble" and needs money sent immediately. Rule of thumb: never give out personal bank account information or send money through a wiring service.
  4. Home repair scam: this scam tends to target elderly women who live alone. Often, a nice man appears at the door and offers to do repair work. Once the man gains the trust of the elderly individual, they then claim that more and more repairs need to be done and then charge huge amounts of money. Police call these scammers "woodchucks".
  5. Medicare fraud scam: in this situation, the scammer will most often call a senior citizen pretending to be a Medicare representative. They then offer free medical products if the senior will give them their Medicare number over the phone. Similarly, scammers use another tactic whereby they pretend a senior citizen’s Medicare card has expired and they need the number in order to "renew it". In the end the goal is to obtain the Medicare number so scammers can fill out a Medicare form, obtain authorization from an authorized doctor, and fraudulently rack up charges to Medicare.
  6. Investment scam: the list is endless for the various types of scams that fall under this heading. A few common investment scams include Ponzi schemes, "financial advisors" offering to handle your money (especially after the death of a spouse), free investment seminars where a senior is hounded to invest inappropriately, high yield investment scams that promise "high yields" but are ultimately very risky, and annuities for older people that will never benefit from this type of investment.

Even if you aren’t a senior, please share these scams with your elderly friends and family so they don’t become victims.

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    Thank you for this post. This is good information for seniors and caregivers.