Beware of Scams in Retirement: Forewarned is Forearmed

By Liz Loewy, EverSafe General Counsel

There’s an old saying in law enforcement: If you want to find fraud or corruption, you simply have to “follow the money.” Today, 67% of the nation’s deposits are held by Americans who are 50 or older, according to the AARP, making them an attractive and lucrative target for exploiters. In addition to seniors’ inclination to save money, many are vulnerable to fraudsters due to age-related physical and cognitive challenges. The combination of wealth and cognitive impairment can be devastating, creating the perfect environment for fraud.

Experts refer to elder fraud as our nation’s hidden epidemic. Becoming knowledgeable about current scams is critical and may be your best defense.

Common Scams

The following list represents just a sampling of current scams known to law enforcement. Keep in mind that dozens more exist, and variations on the same scheme crop up every day.

1. Telemarketing Abuse: Perhaps the most prevalent type of fraudulent activity affecting older consumers involves inappropriate telemarketing. Products or services are offered by telephone, with a hard-sell approach. The recipient of the call, if he or she understands the offer at all, is not given the opportunity to decline or end the call politely. A few points should be kept in mind:
   • Telemarketing calls are generally a common and acceptable practice in business. If they involve dishonest or aggressive tactics, the caller should be reported to the Better Business Bureau, the FTC or, in extreme cases, to law enforcement. Refrain from answering calls from unknown and blocked numbers.
   • There are legitimate companies in the marketplace that can legally purchase and sell personal information, shopping preferences, and even some particulars related to financial history.  Consider placing your phone number on the Do Not Call Registry. Take steps to opt out of having this information made available for marketing purposes.
2. Grandchild/Traveling Friend “I’m in Trouble” Scam: In this all too common scenario, the scammer reaches out, usually via phone call or email, to a grandparent. The caller pretends to be their grandchild or friend, and then outlines an urgent and dire situation (e.g., car accident, stolen wallet, arrest), usually occurring in another state or country, and pleads for quick cash to resolve the emergency. The purported “grandson” may beg his or her grandparent not to get him in trouble by telling his mother or father. Naturally, these requests for money are almost always fraudulent. If a call or email like this is received, no personal information should be shared and funds should not be transferred. A close family member or friend should be contacted immediately in order to confirm the scam.
3. Advanced Fee and Lottery Scams: You may learn that you are a lucky winner of a lottery, sweepstakes, or other contest you don’t recall entering. In order to collect the prize money or receive the gift, you must first pay taxes “up front,” or perhaps forward “installment fees” or “insurance payments.” Or, you may be asked to simply pay the wire transfer fee in order for funds to be placed directly into their account. Fraudulent emails may be embellished with sad stories about an ailing relative, unfailingly polite language, and references to inheritance – but there is always the promise of a big payoff. In reality, the scammer is simply attempting to obtain personal and financial information so that he or she gets the big payoff – your cash.
4. Charity Scams: In these schemes, callers from phony charities collect “donations,” alleging that contributions will be spent helping veterans, children or even the police. There is often an upswing in these kinds of calls after a natural disaster. It’s important to inform family members that cons often hide behind phony charities and decisions to donate should not be made without researching the organization and discussing the contribution with a trusted family member or friend.
5. Asset Recovery Scam: The Consumer Financial Protection Bureau’s (CFPB) Office for Older Americans recently publicized information about a new scam in which older adults who were previously defrauded are being targeted a second time by purported “asset recovery” companies. Victims are charged a fee, in advance, for professional assistance in recovering lost funds. The sham companies often con victims into believing that they have special access to law enforcement or the Federal Trade Commission. Victimized relatives should be educated on the existence of these phony asset recovery companies.  
6. Computer Tech Support Scam: Another new scam involves victimizing individuals who are online. Scammers call and indicate that they’re from a “computer company,” with a warning that they’ve detected a malicious virus on the user’s computer. These “computer security technicians” may obtain personal information, sell a “support contract, “or “diagnose the problem” by having the customer visit a website that appears to be performing a diagnosis - but instead installs malicious software on their computer.

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