Eight Common Scams Against Seniors

Today there is a growing trend for scammers to target senior citizens in Minneapolis. Common scams include door-to-door sales and telephone pitches regarding insurance policies and other “hot button” issues for seniors. Here in Minnesota, our “Minnesota nice” values may contribute to seniors being more trusting and less willing to shut the door or hang up on unwelcome callers.

 According to the Better Business Bureau of Minnesota, there are a number of reasons why seniors are more vulnerable to scams:

• They are more likely to be at home to answer the phone or greet someone at the door.
• Seniors tend to be more trusting and may not suspect that a friendly stranger is a con artist.
• Elderly citizens are often lonely, and may be susceptible to a friendly approach, even if it is a sales pitch.
• They may have a need for home repairs or services that they are physically incapable of handling themselves, which can expose them to pitches from itinerant workers who stop by to offer low-cost repairs.
• Seniors are often on fixed incomes, which may make them vulnerable to high yield investment promises or savings on medical care.
• Elderly people may own their home outright, making them a target of predatory lenders.

Most Common Scams Against Seniors

First, let’s look at the most common scams targeting retirees, senior citizens and adults with disabilities. Then we will cover how to avoid them.

1. The Grandparent Scam.

With this technique, the scammer calls the senior on the phone, posing as a grandchild in trouble, or a friend of the grandchild. Gary Johnson, Senior Outreach Manager of the Better Business Bureau in St. Paul, MN describes this scam.

“The primary scam that I hear about around the region is the Grandparent Scam:

‘Grandma this is Tim. I am in jail and need your help. Don’t tell my parents. I am so embarrassed.’

They are then asked to wire funds out of the country and the money is gone. One of the reasons seniors are targeted is that people 65 and older control approximately 70% of the assets in the country. That makes our demographic a big target for the Scammers.”

Quick Tip: Ask for a phone number where your grandchild can be reached or the name of the detention area where he is being held. Call the grandchild’s home or cell phone and ask for him. Chances are, he will answer the phone or his parents will know right where he is.

2. Domestic or Foreign Lottery Scams.

There are many versions of this scam, all of which require that you provide your account information or submit payment to cover processing fees, foreign customs, taxes or other costs in order to receive your prize. You may be told you must submit a payment through personal check, wire transfer, direct deposit or other means. The hucksters may make contact through a letter, phone call or email, and you may be asked for your bank account number or social security number in order to transfer funds.

Some of the most common forms of this scam include an announcement that you have won a very large sum of money in a foreign lottery or that you have been awarded money in a legal settlement or class action lawsuit due to illegal telemarketing by a foreign business.

Quick Tip: Never give out confidential information, even your home address, to a stranger.

3. Home and Garden Handyman and Remodeling Scams.

This type of scam typically shows up via a door-to-door sales person offering to perform work on your home or in your yard, often at a bargain price you “can’t refuse.” Here are some examples:

• A roofing company suggests that they can provide roof repairs or replacements at a fraction of the cost of their competitors, typically asking for up-front payments to begin work.
• A tree service tells you that one of your trees is diseased or was damaged in a recent storm and must be cut down.
• A plumber or home repair outfit tells you they will make repairs or do handyman work.

There are many problems with these scams. For instance, there may not be anything wrong with the “diseased” tree. The home repairs, if they are even completed, may be shoddy and done by inexperienced personnel with the only real goal of getting you to pay them money. And if you are asked to pay in full up front, you may never seem them again.

Quick Tip: Do not open your door to someone you do not know, unless you have a friend or relative with you to help ascertain the nature of the visitor’s business and whether the person can be trusted.

4. Discount Health Plan Schemes

Fake discount health plans are becoming more common today with the hubbub in the healthcare world, and the resulting confusion. Seniors are particularly vulnerable due to increased medical care needs. With this scheme, the caller claims to be with the government or a government sanctioned company and tries to sell you a health plan that offers medical services at discount rates.

Quick Tip: Ask for the company name, phone number and website so you can perform your own research. If these details are not provided directly, hang up.

5. Investment Scams

Investment scams come in a variety of forms, and may even occur through established investment firms. Unnecessary fees, short term investments, promissory notes, and unregistered securities are examples of some of the investment opportunities that have turned up as being scams.

Other investment scams show up as a free offer of some kind. The hoax focuses on creating trust so that the unsuspecting fraud victim supplies personal information or investment funds. You may receive offers of high returns on investment or free trips, and typically you will be pressured to make a commitment of some kind on the spot. These scams are often Ponzi schemes or empty promises designed to obtain access to your money.

Quick Tip: If you receive a call from an investment company soliciting your business, ask for the company name, phone number and website so you can perform your own research. Also be sure to review your financial statements and ensure that you understand all fees and charges. 

6. Fake Charities

Alas, even companies posing as Minnesota charitable causes may not be trustworthy. Today, due to the challenged economy, some companies are using an emotional appeal to tap into seniors’ desire to support a cause. In some cases the company calling you may be an actual charity set up as a 401c(3), but very little of the money actually benefits the cause. Some charities may request that you purchase something you otherwise would not have been interested in buying, such as magazine subscriptions, while others request donations of money, cars or other property to help support “those in need.”

Quick Tip: Do not donate money to a charity without first researching whether the organization is registered with the state by visiting the Minnesota Attorney General’s website at www.ag.state.mn.us or calling 1-800-657-3787.

7. Jury Duty Scam

Barbara Johnson Hannah, a Certified Pre-planning Specialist and Family Service Specialist for Aftercare informed us of this scam in which someone calls and claims to be a “Jury Duty Coordinator” and threatens to prosecute you for failing to report to jury duty.  If you protest that you never received a summons for jury, the scammer asks you for your social security number and date of birth so he or she can “verify the information and cancel the arrest warrant.” This is a fraudulent attempt to obtain your personal information in order to steal your identity. 

Quick Tip: Never give out your social security number, except to those you trust completely. No legitimate company or organization will request this information over the phone.

8. Phishing scams.

With this common scam, you receive an email suggesting there is a problem with one of your accounts. You may be asked to click a link to another site to verify your information. Often the email looks legitimate, and may even include a well-known company logo. These emails are often written poorly and are addressed not to the individual but generically, such as “Dear Customer” or “Dear Account Holder.”

Quick Tip: Never click links inside of emails unless you have verified that the sender is who they say they are, and never supply personal information or PIN numbers online. A legitimate company will never request confidential information this way.

How to Thwart Scammers

Seniors and their friends, family members and senior caregivers must all work together to help prevent these crimes. The good news is that there are many simple things you can do.

Tips for Seniors

1. Do not allow strangers into your home. Do not even open the door to a stranger if you are alone. And do not do business with anyone who just shows up at your door.
2. Never disclose your social security number, credit card number, check routing information, or bank account information to telemarketers. No one except those closest to you, whom you trust completely, should have access to any of your account information, your social security number, or other identifying information that could be used to steal your identity or access your funds.
3. Recognize that people who “sweet talk” you may have ulterior motives. Be wary of any stranger who pours on charm, and/or uses pushy, high pressure techniques or fear tactics to obtain your personal information, close a deal or make a sale.
4. Be firm. Simply telling a caller that you require their contact information and website to perform your own research or have your relative evaluate their company may be enough to thwart their attempts if they are con artists.
5. Simply hang up. You can feel free to just hang up the phone when you receive unwanted calls, phone calls from solicitors, and especially anyone asking you to send a check, wire transfer, or other payment for future services.
6. Never pay money to collect your winnings. It is important to know that legitimate lotteries deduct applicable taxes from the awarded winnings, rather than requiring money up front.
7. Carefully check out any company you plan to do business with or hire. Turn to trusted relatives for help researching the legitimacy of charities, home services, investment firms and other companies that may benefit from your business or contributions.
8. Do not pay an entire amount for a repair or home remodeling project up front. A good rule of thumb is to pay only 1/3^rd for the company to begin work.
9. If it sounds too good to be true, it is. Do not let a desire for a better nest egg prevent you from using good judgment.
10. Pick up your mail as soon as it is delivered, and do not leave outgoing bills in the mailbox. Take them directly to the post office, have a relative do it for you, or pay securely online.

Tips for Family Members and Caregivers

1. First, as a trusted family member or senior caregiver, be on the watch for unusual activity around the senior’s home. Some home service scammers have been thwarted simply because someone asked them what they were doing on the property. Watch for signs that the senior may have fallen prey to a scam artist, such as new magazine subscriptions or new knick knacks around the house.
2. Review the senior’s accounts, including bank accounts and investment accounts for unusual fees or charges. And ensure that you fully understand and have checked out the legitimacy of any investment vehicles, such as IRAs, stocks and mutual funds.
3. Register the senior’s phone number with the National Do Not Call Registry at 1-888-382-1222 or www.donotcall.gov.
4. Check out any company the senior wants to do business with through the BBB at www.bbb.org. If you want to hire a repair service or handyman, you can obtain a list of accredited services through the BBB.
5. Obtain a shredder and ensure the senior shreds any documents with identifying personal information.
6. Help to set up Social Security or pension benefits so they are direct deposited into the senior’s account.
7. Screen all caregivers who are hired to assist the senior or provide in home care.

Additional Resources

The following websites provide excellent information on how to spot scammers and how to stop them in their tracks:

• The Minnesota Attorney General’s office: http://www.ag.state.mn.us/. View the Scams section for detailed information.
• The Better Business Bureau: http://www.bbb.org. You can research companies to determine their rating and whether they have complaints filed against them.
• The BBB’s Consumers page: http://minnesota.bbb.org/consumers/. This website page contains a number of resources including a Top Scams page.
• Adult Protective Services, such as those offered by the Minnesota Department of Human Services: http://www.dhs.state.mn.us/. Go to the Aging page, then look for Adult Protection to learn about how to report financial or other exploitation of seniors.
• Hoax Slayer: http://www.hoax-slayer.com. This site provides more information on common hoaxes and scams.