"The No. 1 thing about fraud and the elderly is they are generally living on fixed incomes and drawing down their assets. The house is doing OK, but they don't know if their money will last as long as they do," says Jean O'Neil, director of research and evaluation at the National Crime Prevention Bureau in Washington, D.C.
This, she adds, is followed second by health problems, either their spouses' or their own, "which makes them see a need for more money than planning ever suggested."
And third, while older folks may be cash poor, they have accumulated lots of assets--homes, antiques, gems--making them very attractive to con artists. "Layer on top of that an interest in making a profit, which is central to how we work in this society," says O'Neil, "and it's not hard to understand how people can get taken." And why even as baby boomers age, they will face the same situations.
"The elderly often are perceived by con artists as more trusting, less aware of their surroundings, and easier to manage because of their age," says Diane Terry, senior director of the Fraud Victim Assistance Department at TransUnion, one of the country's top credit reporting agencies. If older consumers are victims of fraud, they often don't report it. "They're terrified that their children or other family members will deem them incompetent and try to take over their assets. Every one of us knows we don't want to lose that freedom; we want to be independent," says O'Neil.
While it's easy to picture a shady operator preying on anonymous victims, too often the elderly know the person who's lifting their savings. Older consumers face more medical issues and may visit more doctors, medical facilities, or have the need for in-home care, says Terry. When people are admitted to a facility or sign up with a physician, they give out all the information that they'd put on a credit application. This makes it tempting for an unscrupulous employee, a caregiver or housekeeper, or even a relative to either steal the information or steal directly from the person.
In September 2003 the Federal Trade Commission (FTC) released a survey stating that 27.3 million Americans have been victims of identity theft over the past five years, 9.9 million people in the past year alone. An earlier FTC report indicated that 10% of identity theft victims are age 60 or older. Identity thieves use the information to open new accounts, misuse checking or saving accounts, rent housing, obtain medical care or employment, or obtain government records such as tax returns. Some thieves even use stolen identities when being charged with crimes.
The FTC offers these tips to protect yourself and elderly relatives:
"People who don't know about consumer rights, frauds, and scams are more likely to wind up being victimized," says O'Neil. "The one thing that absolutely makes you a target is being caught the first time--these companies share and sell names." For protection:
Vigilance is key when trying to avoid getting taken, and older consumers have to be especially careful. Robert Allen Kosbie, CPA, and owner of Financial Growth Systems Network, in San Diego, has this advice:
Ramon Machado, CPA and certified fraud examiner at Deloitte & Touche, LLP in Los Angeles says, to avoid being taken, get all offers in writing, check out the seller through such organizations as the Better Business Bureau, find out how they got your name, don't be pressured, and finally, if it sounds too good to be true, RUN.
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