Contributed by Colleen O’Neill, CPA, Chief Financial Officer at The Hickman
While seniors make up 11 percent of the population, they represent 30 percent of consumer fraud cases and 50 percent of telephone fraud. The reason for their susceptibility to fraud is due to several factors:
- A lack of comfort with communication technologies among some seniors is exploited by scammers.
- Many seniors, who have had a lifetime to acquire resources through homeownership and investments, have a relative degree of wealth that can be targeted.
Below are fraud prevention tips for seniors:
Know the Tricks
The National Council on Aging identifies 10 major scams that involve seniors:
- Health care/Medicare/health insurance fraud
- Counterfeit prescription drugs
- Funeral and cemetery scams
- Fraudulent anti-aging solutions
- Telemarketing scams, including fake charity scams
- Internet fraud
- Investment schemes
- Homeowner/reverse mortgage scams
- Sweepstakes and lottery fraud
- The grandparent scam, in which a fake grandchild calls for money
Many of these schemes are not reported because of embarrassment. In some cases, the victim may not even know he or she has been scammed.
There are many resources that can be used to help seniors prevent and report fraud, some of which will be presented below, but first there must be a general awareness among both the seniors and their loved ones. A “buyer beware” attitude or a level of consumer skepticism can go a long way. As the adage goes, “If something seems too good to be true, it probably is.”
Many seniors who are in their late 80s and 90s are from the “greatest generation,” and grew up with a level of trust and loyalty that many younger people do not have today. In addition, the financial services market has increased in complexity in terms of services and products, many of which are unfamiliar to some seniors.
Families also need to show vigilance in their loved ones financial affairs. Being the extra set of eyes or being willing to listen and advise, without judgement of the senior, provides a trusting relationship and can be a deterrent to scammers.
Apply the Tips
The following are just a few examples of specific tips for preventing fraud against seniors from the U.S. Federal Bureau of Investigation:
- Buy from companies you know and in which you have received positive references.
- Carefully read all contracts. If some items are unfamiliar, have children or an attorney review.
- Do not engage in transactions from phone calls or door-to-door salespersons.
- Never respond to an offer you do not thoroughly understand.
- Do not pay for services in advance of performance.
- Wait until you receive written material before giving to a charity, and inquire about the amount of money that actually goes to the charity or its major programs.
- Call the Better Business Bureau to determine if there have been complaints about a company.
- Always consult with your doctor before buying “miracle” nutritional supplements.
- Carefully review your insurer’s explanation of the benefits statement. Call your insurer and provider if you have questions.
- Never sign blank health insurance claim forms.
Vigilance against the most common types of scams can help prevent senior citizens from falling victim to fraud. Immediately contact police, FBI, and the Better Business Bureau if you have, or think you have, been a victim of a fraudulent act or identity theft.
Information is courtesy of the Pennsylvania Institute of Certified Public Accountants. Published in the Daily Local News on Monday, November 27, 2017