Crooks churning out more scams aimed at seniors: Internet Scambusters #526
No apologies for returning this week to one of the most frequent scam topics, both on Scambusters and the news media -- the vulnerability of seniors.
Latest estimates suggest that one in five people over 65 have been scammed, costing a total of around $3 billion a year.
In this week's issue we explain why seniors make such appealing targets, outline the latest con tricks the crooks use, and signpost some useful sources of information.
Let's get started...
New Tricks Add to Seniors' $3Billion Scam Woes
Scammers are robbing our seniors at the rate of around $3 billion a year. And as this section of the population continues to grow, and seniors reach much older ages than previously, experts fear the crime is about to explode.
Already, one in five people aged 65 or over have fallen victim to a scam.
There are two reasons seniors are such a lucrative target:
* Deteriorating judgment skills. Scientists have identified the part of the brain used for making decisions and judgments and shown that it shrinks with age.
They say that half of all people over 80 suffer either from dementia or "cognitive impairment" -- a catch-all term for problems with memory and judgment.
* They've got money. This is what a reformed, self-confessed scammer recently told AARP Magazine:
"I'm often asked how I could have ripped off senior citizens. The answer is that con men target people who have money, and a lot of seniors are sitting on fat nest eggs. It's the Willie Sutton rule: He robbed banks because that is where the money was."
But he added: "I think older people are easier to scam, because their emotional needs are closer to the surface. They aren't afraid to tell people how much they care about their kids and grandkids. They aren't afraid to share their fears about the unstable financial markets and how much they worry about being on a fixed income. These fears are real. And every one of them is a bullet for my gun."
As we've previously reported, the most common scams targeting older folk are:
* Bogus lotteries in which the victim has to pay upfront for their non-existent winnings.
* Grandparent scams in which the victim gets a phone call from a supposed grandchild or other relative claiming they're in trouble and need money immediately.
* Investment scams promising high returns, especially precious metals and annuities (most notably equity indexed or variable annuities, which we plan to cover in a future Scambusters issue).
We've written about these and other senior scams several times before. Check out these earlier issues if you want to know more:
Latest Variations on Seniors Scams
But what's remarkable is that in the short time since our last article, many new seniors scams or variations of existing ones have appeared.
Here's a quick rundown:
* Contractor scams and techniques. Another one we've written about many times before, in which a caller claims he can repair a non-existent fault he pretends he spotted -- usually on the roof.
New techniques include the scammer pretending he knows you and has worked for you before and is calling to check on something.
Bogus landscapers are also the latest fad, replacing bogus roofers.
Often the crooks demand payment up front and may insist on driving their victims to the bank to withdraw cash -- they won't accept a check.
* Medicare and Social Security related identity theft.
Various tricks used to steal vital information related to these government plans include telling victims their Medicare coverage is about to be terminated and they must provide confidential details to prevent this.
Information gathered this way and by other means, including bogus lotteries, is also being used to falsely redirect Social Security payments to crooks' bank accounts -- currently at the rate of 50 a day!
* Gift cards and personal payment visits.
Criminals know that more and more people are wising up to the dangers of wiring cash -- and, indeed, the money-wiring agencies are themselves flagging up suspicious payments.
So the crooks tell their victims they must buy a gift card or top up a cash card and send the card number to them.
Or they say an official -- like a police officer or tax official -- will come to to the victim's house to collect payment.
Often this is a sequel to a claim that the victim owes money to someone. Sadly, in some cases, victims are then attacked and their homes robbed.
New Seniors Scams
* Specific new or currently common seniors scams including:
Senior dating scams: Spam emails promote dating agencies for older folk, usually calling themselves by a name that includes the word "seniors."
Victims have to pay upfront for membership, or agree to recurring charges that are difficult to cancel.
Of course, there are no dating partners and you've lost your money, as well, perhaps, as your credit card number.
Courier signature collection: High-pressure telesales callers offering everything from phony investments to work-from-home schemes that are really after cash from your credit card.
To sidestep the wary victim, they send a genuine courier out to collect a signature.
The victims are reassured and think they're signing up for more information when they're really signing a credit card payment authorization.
Land theft: Seniors owning undeveloped land are either tricked into selling it or into paying a bogus agent to sell it.
In the first instance, victims are told they face a huge utility or tax charge, which they can avoid by selling to the crook for a knockdown price.
In the second, and more common instance, scammers tell victims they have a buyer willing to overpay for the land but victims have to pay closing costs upfront.
Counterfeit money scam: Victims are duped into giving large sums of cash to a bogus police officer supposedly to check if the notes are counterfeit.
Incredibly, in some cases they may actually be taken to a bank to withdraw cash.
Taking victims to an ATM or teller to get cash seems to be an increasingly common technique to wring more money out of older victims who are easily confused by the tricksters.
What You Can Do
Whether you're in the older age group or know someone who is, experts say that education -- teaching and learning the risks -- is the best route to tackling the seniors scam explosion.
Seven key rules are:
* Never accept what someone tells you on face value; check it out.
* Never give information like bank account details and Social Security numbers to someone you don't know. The people who really need these already have them.
* Never pay a supposed bill by money wire, gift or cash card and never agree to a home collection of payment from someone you don't know.
* Don't send money to a supposed relative or friend in trouble, no matter how convincing they sound, without first checking their story with someone else.
* Don't give out your credit card number in response to any kind of call -- including someone who tells you they're from your card company. They're not.
* Don't pay upfront to receive cash -- whether it's a supposed lottery prize, closing costs or anything else.
* Discuss big financial decisions with a family member or a trusted -- and we do mean proven to be trustworthy -- professional.
Some other useful resources include:
The Securities & Exchange Commission (SEC) guidance for seniors.
The non-profit education group Consumer Action produces a number of useful publications both for seniors and those who work with them.
They're produced by Moneywi$e and Bankers One Capital. They're free and available in multiple languages but you have to sign up to the organization first.
Disclaimer: We are not connected with Consumer Action and, because we don't know them, can't endorse them.
This week's Scambusters report has been rather longer than usual. We hope you're still with us!
However, we believe the issue of seniors and scams is one of the most troubling in the world of crime and fraud.
We intend to continue playing our part in improving awareness of the risks and educating seniors and others so they can protect themselves.
Time to conclude for today -- have a great week!