August 1, 2012

On a recent trip to see my family, my mother made me aware that my grandmother had been victim of a scam. An asphalt paver knocked on her door and to our amazement, she let him in! What's more amazing is he walked out with a $9k contract to pave her 40 foot driveway! Luckily my uncle drove over while they were paving the driveway and stopped them while the job was half complete (and before they could cash the check). The paving crew didn't ask any questions, packed up and the police are looking for them. On a side note, my parents are general contractors and the job that was quoted for $9k should have been quotes at $2k, and as a silver lining, they do agree that the half-job that was complete was quality work. The end result was that my family sat down and spoke with my grandmother and everyone agreed that any expenses over a certain dollar amount would go through her siblings.

Our friends at Clark Howard report that seniors lost $3 billion to scam artists last year and are particularly fond of elderly widows. Watching out for senior scams and ripoffs can be scary, especially if friends and family are NOT nearby.

Your phone rings. It’s the local hospital with terrible news–your grandson has been hit by a car, and needs emergency surgery. Will you provide your credit card number to cover the cost? You say yes without hesitation, but later you learn the truth: you’ve been scammed. The call was a fake, and now the scammer has racked up thousands of charges, exceeded your credit card limit (affecting your credit score), and leaving you with thousands in charges to contest.

Scenarios like this are all too common. Senior citizens are a major target for scammers. With their good credit, retirement funds, and paid-off homes, older adults often fall prey to con artists. Knowing what to look out for can help you avoid scams. Read this list to learn about common senior scamsand how you can avoid them.

1. The phony refund scam

Emerging in March of this year is a new scam, in which seniors are offered a tax refund or stimulus payment under the American Opportunity Tax Credit. The American Opportunity Tax Credit is real–it awards tax rebates to those paying college tuition expenses. But these offers are scams on the elderly attempting to get them to pay filing fees to pay for the made-up refund.

2. Medicare fraud

Every U.S. citizen over age 65 qualifies for Medicare, and individuals operating scams on elderly people know how to take advantage of that. Scammers pose as a Medicare representative to get seniors to give them their Medicare information over the phone. They’ll then charge insurers for services or medical equipment without providing these things, pocketing the money.

3. Fake prescriptions

The internet can be a great place to find discount prescription drugs, but seniors have to be extremely careful of scams. Victims of these types of scams on the elderly may pay money for ineffective pills, or worse, unsafe substances that can hurt them.

4. Telemarketing

Seniors as a group make twice as many purchases over the phone than other people. Telemarketing scammers might solicit money for a fake charity, pretend to be a hospital needing money for a relative’s terrible accident, or tell the victim that he or she can come into a large sum of money simply by wiring a “good faith” payment into the scammer’s bank account. This last type of scammer might work with another scammer pretending to be a lawyer or bank representative.

5. Internet fraud

Since many seniors aren’t well-versed in new technology, many internet scams target this group. A pop-up window might tell you that you need new virus software to protect your computer. But downloading the software will release a virus into your hard drive and steal your personal information, such as bank account numbers.

Other common internet scams on the elderly take the form of an email telling you that you need to update your personal information for security. This email can appear to be from your bank or the IRS, but it isn’t.

6. Grandparents scam

A scammer calls and says, “Hi Grandma, guess who this is!” When Grandma reels off the name of a grandchild, the scammer has established a fake identity. He then tells Grandma he’s desperate for rent money, or needs to be bailed out of jail. Often, he’ll beg Grandma to keep it a secret from his parents. Grandma wires the money to an account, and it’s gone forever.

7. Investment and home loan scams

A scammer will invite seniors to a “free lunch” investment seminar or contact them with an offer to help them renegotiate their mortgage. But both offers are bogus: the scammer takes the money and runs.

8. The home improvement scam

A repairman knocks on a senior’s door and says, “Ma’am, your roof needs to be repaired–right away.” Once the work is done, the victim finds out that the price is much higher than the original quote, or the roof is left full of holes.

How to Avoid Being Scammed

Protect yourself from scammers by taking a few precautions. Never give money to solicitors. If you get an email from your bank or other organization asking for personal information, always call to verify the query. Never give out personal information over the phone, unless you made the call. Always write checks for investments to a company or firm, never to an individual. And always make sure to shred documents with your credit card number, social security number, or other personal information. Above all, stay alert for scams on the elderly and approach any requests for your money with caution.