7 Elder Fraud Scams to Watch Out For
Elderly Financial Exploitation (EFE) had been one of the fastest growing frauds for many years. While this type of fraud has been around for a long time, factors that have contributed to the growth are multifaceted.
Fortunately, we have been able to identify areas which elderly individuals are typically compromised. While this list is not all encompassing, it is the areas which elderly individuals should be aware and think twice before committing to any agreements, giving consent, access, or signing any legal paperwork.
Elder Financial Scams
1. Government Impersonation schemes
In this scenario, fraudsters will target older individuals who place value on contact with an agent from the IRS, FBI, Social Security Administration, or local police or sheriff’s office. The fraudsters explain to the Senior they are from the Government and must pay a “processing fee”, send money to “pay back taxes”, or to pay some “court costs". Often the fraudster will have the individual’s social security number to appear more legitimate. The Government will never exchange payment for arrest, nor will it ever be over the phone, email, text, or social media.
2. Investment schemes/time shares
Fraudsters will call unsuspecting elderly individuals asking them to invest funds into a “vacation home” or “vacation investment” promising high returns. They also will send links to legitimate investment websites information that have been stolen or include a spoofed secretary of state filing to seem real. Fraudster use pressure to make this scheme work, citing the opportunity will “only last this month” to get money sent quickly before victims consult professionals. Resisting the urge to send funds under pressure is important as well as doing research prior to investing, both of which are keys points that should be stressed.
3. Romance schemes
Elderly individuals can often be lonely, feel isolated, or seek out companionship later in life. This can be especially true after the death of a spouse, divorce, or for a senior living alone. Fraudsters exploit this sensitive area by creating fake profiles on dating websites, luring unsuspecting victims into a non-physical emotional relationship. At first the fraudster will never mention money. Then the fraudster will begin asking for small favors, such as sending a package, or a small purchase on Amazon or another online retailer. Once the fraudsters believe the trust is secure, they will slowly drain funds from the victim. Caution should be taken when using dating applications, websites, instant messaging, or virtual apps to meet people.
4. Homeowner/reverse mortgage schemes
Reverse mortgages have seen popularity in the past years with individuals 62 and older who have enough equity in the home. Again, fraudsters use these facts to their advantage to steal money. While their a several variations of this scheme, fraudsters will convince seniors who are looking for cash to pay off bills, are near foreclosure, or make repairs to their home, convincing them to take out a reverse mortgage.
Sometimes, fraudster’s show up at the front door claiming to be an expert in home construction offering to do the repairs for upfront cost. They will convince seniors the repairs are needed and convince them to take out a reverse mortgage.
5. Medicare fraud
Both Medicaid & Medicare fraud fall under the False Claims Act (31 USC § 3729-3733). Elderly individuals can become victims of this type of fraud, especially if they have in home caretaker or need help with their bills or financial services and use Medicare. The most common type of Medicare Fraud is billing for unnecessary procedures, or procedures that are never performed. Often, elderly individuals are unaware that claim has been made until a third party researches their finances and finds and outside caretaker, service provider, or even a family member has been involved and is taking advantage of their Government support. Having a trusted individual to file paperwork, take care of financial issues, or provide long term care is vital for elderly or indigent individuals.
6. Grandparents’ schemes
Like many other schemes we have mentioned here, grandparent schemes play on elderly individuals’ emotions. While this has become less common, investigators still see this scam pop up from time to time. Fraudsters will contact and unsuspecting grandparent pretending to be the grandchild caught in a financial hardship. They may act as if they need the grandparent to send money while they are on vacation, away at school, or going through some sort of crisis. Fraudsters will ask for a MoneyGram, Western Union, Zelle, or PayPal so the funds are immediate and cannot be returned easily.
7. Sweepstakes and lottery scams
Elderly individuals who frequent visiting casinos, playing the lottery, or enjoy online gaming can become a victim of this type of scheme. Fraudsters will contact an elderly and inform them about a prize they won. They tell the elderly person that they must pay and “upfront tax” or some sort of “fee” associated with the prize to receive it. Most often, the fraudsters will continue to lure the elderly individual by convincing them that they can win a grand prize if they send more money. Unfortunately, this cycle continues until the victims understand they have been scammed.
Last But Not Least
Elderly fraud is one of the most common frauds, while most goes unreported or even heard about until many months or years later. Education and connection with elderly individuals are key.
Coastal is committed to helping elderly individuals fight fraud, judgement free, starting with Coastal’s fraud department. We understand how difficult it can be to navigate the murky waters of fraud and how easily anyone can become a victim.
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