How Crooks Target Seniors

Their stories go largely unreported.  The victims are often embarrassed to talk about what happened.  The unaffected sometimes think it’s amusing.  But there is nothing amusing about losing one’s life savings to a con artist, something that happens every year to thousands of older Americans.

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Ready for a shock?  The Texas Department of Protective Services conducted a study of this problem and found that seventy percent(!) of all con jobs are directed specifically at senior citizens.  Yes, that means that by and large crooks purposely target older Americans!  Personally, I find this upsetting – preying on the elderly? How low can some people go?

The AARP says that the best preventive measure is information.  I did a bit of research on the subject and will now share with you what I learned.  Even if you don’t fall into the “target group” (i.e. you are not a senior) it’s still good to know.  You can share this information with the seniors you care about so they too can more easily spot a crook.

Fraudsters make the initial contact with their victim via telemarketing, door-to-door solicitation or direct mail.  Sometimes the crook is that friendly person the senior already knows.  But regardless of how the initial contact is established, all con jobs have several elements in common.  The crook will first work hard to win his victim’s trust.  He will be friendly, confident, act like a professional and pretend to care for his intended victim.  He will then claim that whatever he’s pitching is risk-free and that the rate of return (probably outrageously large) is guaranteed.  This should be setting off some alarm bells.

Then there will be a very tight deadline by which the victim must act.  He may insist that the special deal is only available today and pressure the intended target to act fast.  More alarm bells should be going off at this point.  The idea is to bait the victim into making a hurried decision before he or she has the time to consult with someone about it.

Depending on what is being pitched, there are additional ways to “sniff out” fraud.  Here are the four most common types of scams that target the elderly and how to spot them:

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Investment Opportunities

Many seniors have anxieties about their financial future and scammers like to exploit this by offering “great” investments with “huge” payoff potential and “no” risk.  Before plunging in with both feet, verify that the person offering the opportunity is properly licensed by the Securities and Exchange Commission (SEC) and appropriate state agencies.  Then check the investment – has it been registered with the SEC and state agencies?  Are all filings up-to-date?  Also, it doesn’t hurt to get a second opinion from your accountant or other trusted professional.  Don’t rush your decision.  If it’s a genuine opportunity, it will still be there tomorrow – real deals don’t disappear overnight.

Lottery and Sweepstakes

“You won the sweepstakes!  There’s just a small processing fee (or tax) you need to pay in order to get your award…”  This scam shouldn’t be too hard to spot: Did you enter the sweepstakes?  No?  Then how can you win it?  They say someone else entered on your behalf?  Who?  Call and check.

Fake Charities

Counting on the good nature of people and their willingness to help those in need, crooks sometimes pretend to work for a charity.  If you are contacted by an organization you’ve never heard of, check with the appropriate state agency to see whether it’s properly registered.  Than ask the charity’s “representative” to provide you with information about the organization’s activities and how they spend the money collected.  Ask for a copy of the financial documents they file with the IRS.  Legitimate charities will be glad to share this info, and will not pressure you to hurry up.

Predatory Lending

Targeting seniors who are experiencing financial difficulties, some savvy crooks offer loans that are designed to enrich themselves and push the victim further towards financial ruin.  A typical scenario involves talking the senior into taking a home loan under very unfavorable terms, then when the poor victim defaults, foreclosing on the property.  To avoid this trap read the loan documents carefully and don’t sign anything you don’t understand.  Consult with your financial advisor or someone knowledgeable you trust.  There are HUD-approved housing counselors who can help with advice, usually at a very low (and sometimes no) cost.  And do not be talked into making false statements on a loan application!  Anyone who suggests doing this is a crooked lender and should be avoided like the plague.