Frauds Against the Elderly: Hang Up the Phone, Lock the Door, Bury Your Checkbook!
Whether it's getting taken by a telemarketing scheme, overbuying magazine subscriptions in hopes of winning a sweepstakes, or having their identities stolen and thousands of dollars in charges being run up in their names, the elderly are plum targets for con artists. Here's a look at why they are targeted. And why it's not likely to change--as baby boomers continue to climb the age ladder.
"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.
Con artists perceive the elderly as more trusting, less aware of their surroundings, and easier to manage.
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.
While it's easier to picture a shady operator preying on anonymous victims, too often the elderly know the person who's lifting their savings.
The FTC offers these tips to protect yourself and elderly relatives:
Telemarketing schemesConsumers lose more than $40 billion a year to telemarketing fraud, according to the FTC. People age 50 and older are especially vulnerable and account for 56% of all victims. Scams include bogus prize offers, phone travel packages, phony charities, or get-rich-quick investment schemes.
According to the FTC, 10% of identity theft victims are age 60 or older.
"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:
Insurance scams"The troubled economy has spawned a large spike in insurance scams," says Jim Quiggle, director of communications for the Coalition Against Insurance Fraud, Washington, D.C. The scams, often run by insurance agents, feed on the desire of many older Americans to make up for lost income during the recent economic downturn. Slick sales pitches promise suspiciously good deals, such as:
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:
People older than age 50 are especially vulnerable and account for 56% of all victims.