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August 4, 2021
Each year older adults lose billions of dollars to financial exploitation. Defined as the illegal or improper use of an older person’s funds, property or assets, elder financial exploitation (EFE) is a devastating crime. It not only impacts an elder’s financial situation, but often takes an emotional toll as well. Victims of such abuse frequently experience intense feelings of fear, depression, anger, and humiliation. In turn, abused elders may be at risk of poorer health outcomes and increased mortality relative to their counterparts.
Fraudsters prey on elders because as a whole, older adults possess more financial assets than other demographics. Seniors tend to own their own homes, have accrued savings over their lifetimes, generally have better credit and tend to be more trusting of others relative to younger populations. Consequently, criminals have engineered specific scams, such as the grandparent scam and other impostor scams, to target America’s elderly.
We have a larger resource page devoted to Elder Financial Exploitation that you can read to help you recognize the warning signs of abuse and provides resources you can use to protect those you feel may be victims of abuse. This article is simply meant to be a resource of the most commonly reported types of elder abuse scams.
Medicare / Health Insurance Scam
Every U.S. citizen over the age of 65 automatically qualifies for Medicare, so scammers do not have to research which health insurance provider they are using. The scam artists pose as Medicare representatives and try to get seniors’ personal information. They may offer services that the senior doesn’t need via the telephone or a “mobile unit” then try to bill Medicare for these fake or unnecessary tests/medications/etc. Seniors may get in trouble with Medicare or even be out money for “co-pays.”
Counterfeit Prescription Drugs
Mostly online scams, the FDA investigates upwards of 20 counterfeit prescription drug scams per year, up from five annually in the 1990s. Not only are seniors losing money on fraudulent prescriptions, but they may also harm themselves by taking unsafe substances rather than their real medication. Cheaper is not always better.
Funeral and Cemetery Scams
Scammers scour the obituaries or funeral home websites and reach out to survivors right before, during or right after the funeral to inform the bereaved family that the deceased owes a debt that was overdue at his/her death and needs to be repaid post haste to prevent besmirching the deceased’s reputation. The scammer plays on the grief of the bereaved family while seemingly being sympathetic. Another situation that can happen is that disreputable funeral homes will take advantage of grieving families who are unfamiliar with the details around funeral costs, adding on unnecessary or fraudulent extras to the bill. They play on the grief of the bereaved family by reassuring them that they want the absolute best for their loved one, including a very expensive casket for a cremation when only a cardboard box is required.
Fraudulent Anti-aging Products
In a society that stigmatizes aging, it is easy to understand why people may fall for scams that offer them the fountain of youth. Many older Americans seek out new treatments and medications to maintain a youthful appearance, putting them on scammers’ radars. Whether it’s the ever-popular fake Botox or fraudulent “homeopathic” remedies that do absolutely nothing, there is big money in the anti-aging business. Botox scams are particularly unsettling, because renegade labs creating versions of the real thing may still be working with the root ingredient, botulism neurotoxin, which is one of the most toxic substances known to science. A bad batch can have serious health consequences. As a result, the consumer may also have to incur unexpected medical expenses to address any adverse effects in addition to paying for the fake Botox.
Telemarketing / Phone Scams
Since many seniors are happy to talk to anyone willing to talk to them, phone scams are highly prevalent. Seniors also are more likely to purchase items over the telephone versus the internet, as a result, there is no paper trail, making these transactions almost impossible to trace. Also, once a scammer is successful with a telemarketing scam, s/he may “share the wealth” by spreading the susceptible senior’s information. There are several types of telemarketing scams including:
- The pigeon drop – scammer tells the senior they found a large sum of money that they are willing to split if the senior will provide a “good faith” payment by withdrawing money from their bank account. Often, there is a second con artist involved who portrays a “trustworthy” participant, such as a lawyer or officer.
- Fake accident – the scammer convinces the senior that a relative or close friend has been in an accident and needs the money for treatment.
- Fake charities – scammers will call seniors soliciting donations for fake charities. Names will be similar to well-known charities to create the belief that they are legitimate. These scams are particularly popular after natural disasters.
Internet Scams
Seniors fall victim to clicking on pop-up windows offering updated virus protection that look legitimate. They are scams that will either require a large sum to “purchase” or that upload an actual virus to the computer that grants the scammer access to personal information. The scammer may even install ransomware and demand a payment to let the senior regain control of their information. Email phishing scams are also popular. Someone pretends to be from their bank, the IRS or some other official entity that needs to verify the personal information of the senior. Seniors may also fall victim to a “Work From Home” money claim from an Internet ad or email. The offer may involve the senior needing to pay for “training” or special “equipment” to begin making the money.
Investment Schemes
When they retire, seniors are often looking for ways to maximize their savings while minimizing risks. Pyramid schemes, such as investment opportunities offered by a fabled Nigerian prince, are simply too good to be true. They are designed to take advantage of people and steal their financial resources. No legitimate investment will require up front money to reap astronomical returns within unrealistic timeframes.
Homeowners / Reverse Mortgage Scams
This encompasses two distinct scams. The first involves a con artist who poses as a tax official offering to reassess the senior’s property for tax purposes. The scam is predicated on the notion that the senior’s tax debt could be lowered. The con artist charges a fee for this “reassessment,” which is fraudulent. The second revolves around pressuring seniors to obtain a reverse mortgage to access the equity in their home. Typically, scammers are lurking to perform “necessary home repairs” to take advantage of the windfall of cash the senior receives from the reverse mortgage. Since real estate generally encompasses a large portion of a senior’s wealth, obtaining a reverse mortgage may effectively become the tool to deplete their largest asset.
Sweepstakes and Lottery Scams
While not limited to seniors, these scams use the lure of free money to convince consumers to divulge sensitive information or send funds to a con artist. Seniors receive a communication via email, mail, phone call or sometimes even in person. They have won a prize from some contest they don’t even remember entering. Before they can get the entire amount, they must deposit a partial amount to “verify” their bank account information. They are then asked to repay that amount to the scammer before the fraudulent check has been returned. By the time the check is returned as a fraud, the scammer is long gone with money they got from the senior.
Impostor Scams
This one seems particularly egregious because it can pull on the heartstrings of the senior involved depending on the persona adopted by the scammer. The scammer may call and pretend to be an IRS agent or from another official entity, such as the local utility company or even their bank. The scammer will then claim that the senior owes money that must be repaid immediately, or charges will be filed. Alternatively, the scammer may try a more personal approach by self-identifying as the senior’s favorite grandchild/niece/nephew/etc., in need of money. It may just be a “loan,” to address an urgent situation like a car repair, late rent, school tuition, or something along those lines. The scammer implores the senior not to tell mom or dad and states that s/he will pay the senior back. The scammer will then provide a Western Union or MoneyGram location to pick up the money.
Check Fraud
There are several variations of check fraud. The senior may write a check to someone, and that person alters the amount or orders checks with a new address to write fraudulent checks. Blank checks could be stolen and forged for any amount, or scammers could ask the senior for help “clearing” a check because s/he does not have a local bank account but needs the money quickly. The senior deposits the fraudulent check and writes one to the scammer. By the time the check is returned, the scammer and the money are long gone. The scammer may also write checks of larger and larger amounts with the senior until they get the amount they want, and then disappear.