You're way too smart to be taken in by a con artist, right? You may worry about your parents and older friends being scammed, but you know you can see one coming a mile off. Or can you?
Elders are the most common targets of scams and frauds. A recent survey [pdf] conducted by Infogroup/ORC for Investor Protection Trust, a non-profit organization that promotes investor education, revealed that 20 percent of people in the U.S. age 65 and older – 7.3 million – have been victims of a financial swindle.
According to the FBI, elders are the most common targets of fraud and the number and types of scams on the FBI website is astonishing. You should know about these:
- Health insurance
- Counterfeit prescription drugs
- Funeral and cemetery fraud
- Anti-aging products
- Telemarketing fraud
- Internet fraud
- Investment schemes
- Reverse mortgage scams
It was the last item on the FBI list that brought me to this topic because I couldn't understand why there are so many warnings about reverse mortgages when it is no longer possible for lenders to sell borrowers other financial products while setting up a reverse mortgage.
According to the FBI, there are different, more creative ways involving real property to fraudulently separate elders from their money (see list here; scroll down to "reverse mortgages") and their last bit of advice is the best: “seek out your own reverse mortgage counselor.” That is, never set up a reverse mortgage with someone who contacts you.
As I got interested in following up on those other kinds of elder scams and fraud, that one simple idea became bleeding obvious: NEVER, EVER BUY ANYTHING FROM STRANGER WHO CONTACTS YOU.
Whether it is a reverse mortgage, diamond earrings for your wife or daughter, insurance or an investment, do your homework – the internet makes it easy. Call trusted friends for advice, talk your banker or other appropriate professionals with whom you have done business in the past to select a product or service.
For yourself or a parent, it is not hard these days to avoid many potentially fraudulent solicitations.
You can cut down on unsolicited calls from sales people with the national Do Not Call registry, managed by the Federal Trade commission. Sign up with your personal phone number(s) and except for political organizations, charities and telephone surveys, all sales calls will stop.
I've been signed up since the registry began in 2003, and it works. On the rare occasion I've received a call from a telemarketer (three or four times in seven years), I've told them I'm on the registry and they high-tail off the phone. Penalties are stiff.
If you receive an offer to have your telephone number removed from telemarketing lists – especially for a fee – run. Yes, scammers even try to scam the fraud protectors. Although it doesn't hurt to register your cell phone with the registry, federal regulations already prohibit most telemarketing calls to cell phones.
Here's all you need to know about cell phones and the registry at the FTC website.
The four credit rating agencies (Equifax, TransUnion, Experian, Innovis) have together created another opt-out service for what are called “firm” offers of insurance and credit – that is, “pre-approved” and “pre-screened” offers that usually arrive by snailmail.
At the website, you can opt out for five years, opt out permanently or, if you change your mind, opt in again. I've only just opted out, so I can't say yet if it works as well as the FTC Do Not Call registry.
Some con artists are – well, artists at what they do and anyone might be taken advantage of when they're not paying attention, so here are some reliable sources of fraud information:
FBI Elder Fraud page with tips on avoiding them
FBI List of Frauds with tips on avoiding them
AARP – Alerts and general information
And don't think that because a sales person is our age that he or she is honest. Just last week, Bloomberg published a story about aging con men who target elders.
At The Elder Storytelling Place today, Johna Ferguson: Privacy