By Lauren Hill
A recent study performed by MetLife on financial elder abuse reported that losses from the financial fraud of seniors in 2010 soared to a staggering annual total of $2.9 billion. This total showed a 12 percent increase from 2008. Studies like this one seem to indicate that con artists have recognized vulnerabilities among seniors that make them a prime target. With a lifetime of savings and homes that they often own outright, seniors make tempting prey. In addition, seniors often are more trusting, are more concerned with not being rude to solicitors and salespeople, and are less likely to report fraud when it does happen. To combat this growing trend, it is essential that senior become educated on some of the most common types of fraud aimed specifically at seniors and ways to avoid them.
1. Health Care Fraud
The health care fraud of seniors often takes the form of various parities who offer “free” products or services to seniors. After the products or services are delivered, however, a senior’s medical insurance company or Medicare is billed for the full cost. Common scams include “free” medical equipment, fake tests or labs, or unnecessary services.
Seniors can avoid falling victim to health care fraud by making sure to keep their insurance and Medicare numbers safe. They should never sign a blank insurance or medical authorization form and should only give their identification numbers to those parties who have provided a legitimate medical service. It is also important that seniors keep accurate records of all medical services and compare them to insurance explanation of benefits statements.
2. Prescription Drug Fraud
With the costs of prescription drugs skyrocketing, many seniors on fixed budgets are looking for ways to save money. As a result, more and more seniors are turning to online retailers or other sources to purchase the medications they need. Unfortunately, however, some of these drug distributors sell counterfeit or poor quality medications.
To combat prescription drug fraud, seniors should only purchase medications online from licensed distributors that carry the Verified Internet Pharmacy Practice Site seal of approval. Moreover, they should never buy promotional or deeply discounted medications. As an additional rule, seniors should always inspect their medications and report any packaging or pills that look suspicious.
3. Unsolicited Home Improvement Fraud
A typical scenario for a home improvement fraud involves workers that go door to door diagnosing repairs that need to be performed on a home and offering to take care of them right away. Frequently, the repairs suggested are completely unnecessary. Once the work has been performed, the bill is often significantly higher than expected or the work is poorly done.
Seniors should always be suspicious of door-to-door salesmen making claims regarding home repairs that need to be done immediately. Instead, seniors should only work with licensed and insured contractors that they contacted directly. If a salesperson comes to the door claiming that a home repair needs immediate attention, seniors should decline the work and then call at least three trusted contractors independently for quotes.
4. Telemarketing or Telephone Fraud
Telemarketing and telephone fraud takes many forms. Sometimes it may be an announcement that a large sum of money has been won but can only be claimed if a certain sum of money is wired to cover taxes and insurance. It could also occur following a well publicized natural disaster when someone calls claiming to be raising money to help those impacted by the tragedy. Finally, one of the most common types of fraud that occurs over the telephone involves a call from a fake credit card company claiming that a person’s credit card has been used improperly or stolen and sensitive financial information is necessary to clear up the problem.
One of the easiest ways to deal with con artists looking to steal money from seniors over the phone is for seniors to have a personal policy of never giving money or personal information to someone over the phone. Furthermore, seniors should remember that anything that sounds too good to be true probably is.
5. Internet Fraud
Common types of internet fraud include non-delivery of merchandise and credit card, internet auction, investment, business, and the notorious Nigerian Letter fraud. Each of these types of internet scams involves websites or businesses that create legitimate looking websites or emails with the sole purpose of stealing money. The Nigerian Letter fraud scenario, in particular, involves a formal looking email from a foreign government requesting help with depositing a large amount of money in an overseas account. It often promises a sizeable lump of money in exchange for a person’s account information or a fee.
Research is probably the best defense against internet fraud. Seniors should investigate feedback ratings from online sellers and whether or not businesses have been rated by the Better Business Bureau. It is also important to research contact information and addresses to make sure that they are legitimate. Finally, purchases should be made using a credit card because fraudulent charges made on a credit card can often be disputed and resolved.
6. Investment Fraud
Many seniors understand the value of wise investing when planning for retirement. Unfortunately, however, many unethical scams have also been perpetrated on seniors in an attempt to get them to invest in fraudulent investment schemes. Pyramid schemes, “Ponzi” schemes, letter of credit, and prime note bank fraud are examples of common types of investment fraud. Unfortunately, all too frequently these investment schemes are pitched to seniors from people they trust in their community or church groups.
Seniors would be wise to remember that get rich quick schemes are almost always fraudulent. If someone promises an outrageous return on investment, it is probably a scam. There is wisdom in seniors having an unbiased third-party financial advisor to discuss all investment opportunities with before purchasing.
Unfortunately, there are numerous additional ways in which con artists make their living off of unsuspecting seniors. As seniors get the message about the various types of financial schemes to be aware of, however, they may be better able to detect a fraudulent scheme before falling victim and keep their money safe.
Lauren Hill holds family close in her life. Protecting and loving her parents in their golden years is something she takes very seriously. Lauren writes for a Richmond, Virginia company offering caregiving support in the way of local resource lists, care lounge for connecting with other caregivers and many other tools for navigating the world of caregiving. You can find Lauren on Google+.