According to a recent AARP study, an estimated $28.3 billion is lost to elder fraud scams each year. The study found that 72% — or more than $20 billion — is taken by individuals who are known to the victims, like family members, friends, or advisers.
This blog post will examine 10 of the most common elder fraud scams. Namely, how they work, and what to do if you find yourself or a loved one falling for a scam. Before we get into specific types of scams, there are some general hallmarks of the Scam Industry that you should be aware of.
- Pressure to act immediately.
- Pressure to keep information secret.
- Use of scare tactics.
- Requests for sensitive or personal information.
- Demands for money, typically in a form that is difficult to recover, such as cash, wire transfer, gift card, pay app or cryptocurrency.
- Specific instructions on how to make the financial transaction. These may include a demand to stay on the phone line with the caller while making payment arrangements.
- An offer that sounds too good to be true.
Types of Scams:
Job and Money-Making Scams:
How Job and Money-Making Scams Work:
You see an ad saying you can earn big money, even working from home. Another ad offers help starting an online business — with a proven system to make money. Maybe you uploaded your resume to a job search website, and someone contacts you for an interview — but first, they want your driver’s license and bank account numbers.
If you respond to these opportunities to work from home, you’ll get requests for money — for training or special access — but you’ll never get the job. If you buy the proven system, you’ll get pressure to pay more for extra services. But you won’t get anything that really helps you start a business or make money. And if you give the caller your driver’s license and bank account numbers, they might steal your identity or your money.
What to do in the event of a Job and Money-Making Scam:
Stop. Check it out. Never pay money to earn money. And don’t share personal information until you’ve done your research. Search online for the company name and the words “review,” “scam,” or “complaint.”
Health Insurance Scams:
How Health Insurance Scams Work:
You get a call or see an ad offering you big discounts on health insurance. Or maybe someone contacts you out of the blue, says they’re from the government, and asks for your Medicare number to issue you a new card.
Scammers follow the news. When it’s Medicare open season, or when health insurance is a big story, scammers get busy contacting people. They want to get your Social Security number, financial account numbers, or insurance information.[1]
Think about these questions. Is that discount insurance plan a good deal? Is that “government official” really from the government? Do you really have to get a new health insurance card? The answer to all three is almost always: No.
Here’s what to do in the event of a Health Insurance Scam:
Stop. Check it out. Before you share your information, call Medicare (1-800-MEDICARE). Do some research, and check with someone you trust.
“You’ve Won!” Scams:
Here’s how “You’ve Won!” Scams Work:
You get a call, letter, email, or text saying that you won! Maybe it’s a vacation or cruise, a lottery or a sweepstakes. The person calling about your prize is so excited. They can’t wait for you to get your winnings.
But here’s what happens next. They say there are fees, taxes, or customs duties to pay. Then they ask for your credit card number or bank account information. Or they ask you to pay with cash, gift cards, wire transfers, or cryptocurrency.
If you pay a scammer or share information, you lose. There is no prize. Instead, you get more requests for money, and more false promises that you won big.
Here’s what to do in the event of a “You’ve Won!” Scam:
Keep your money — and your information — to yourself. Never share your financial information with someone who contacts you and claims to need it. And never send anyone cash or pay with gift cards, wire transfers, or cryptocurrency.
Home Repair Scams:
Here’s how Home Repair Scams work:
Someone knocks on your door or calls you. They say they can fix your leaky roof, put in new windows, or install the latest energy-efficient solar panels. They might find you after a flood, windstorm, or other natural disaster. They pressure you to act quickly and might ask you to pay in cash or offer to get you financing.
But here’s what happens next: they run off with your money and never make the repairs. Or they do shoddy repairs that make things worse. Maybe they got you to sign a bad financing agreement that puts your house at risk.
Here’s what to do in the event of a Home Repair Scam:
Stop. Check it out. Before making home repairs, ask for recommendations from people you trust and check that the companies have licenses and insurance. Get three written estimates. Don’t start work until you have reviewed and signed a written contract. And don’t pay by cash or wire transfer.
Charity Fraud Scams:
Here’s how Charity Scams work:
Someone contacts you asking for a donation to their charity. It sounds like a group you’ve heard of, it seems real, and you want to help.
But how can you tell what’s a scam? Charity scammers want to get your money quickly. They often pressure you to donate right away. They ask for cash, gift cards, cryptocurrency, or wire transfers. Scammers often refuse to send you information about the charity. They won’t answer questions or explain how the money will be used. They might even lie and say you already made a pledge to donate.
Here’s what to do in the event of a Charity Fraud Scam:
Take your time. Don’t trust your caller ID. Scammers use technology to make any name or number appear on caller ID. Tell callers to send you information by mail. Do some research. Is the charity real? If callers ask you for cash, gift cards, cryptocurrency, or a wire transfer, it’s a scam.
[1] Click the following link to hear an example of a Medicare scam: https://youtu.be/51I-szr0JEY?si=uKYksunjtytCRJfY