Castle Wealth Group

September 24, 2017

Protecting the Elderly from Financial Scams

Seniors are often the target of financial scams for a variety of reasons. Scam artists target elderly individuals because they are often lonely and have more time to talk to random callers or respond to unsolicited emails. In addition, many seniors are trusting, compassionate, and may not be aware of the various ways a scammer can use personal information to steal money from them. It is important to protect your loved ones from scam artists who want to steal their money and their identities.

Common Financial Scams Aimed at Seniors

Thousands of scam artists are constantly working to develop innovative ways of stealing money and information from seniors. In most cases, the scam artist creates a sense of urgency that compels the senior to act immediately to avoid further trouble or peril. Some common financial scams that you need to discuss with your loved ones include:

• Grandparent Scams — This scam pulls at the heartstrings of any grandparent. The caller pretends to be the person’s grandchild calling because the grandchild is in trouble. The scam artist tricks the individual into revealing the grandchild’s name at the beginning of the conversation and strings along the senior to reveal other information. In most cases, the grandchild has been in an accident, arrested, or has another urgent need requiring money immediately or something else dire will occur. The grandparent is asked to provide a credit card or debit card over the phone to “help” the grandchild. Advise your loved ones to verify the identity of any caller by asking that person a question only that person would know (e. siblings middle name, the name of family pet, etc.). If you cannot verify who is calling you, you should ask for a call-back number, hang up, and call a relative who can verify what is happening BEFORE you supply any information to the caller.
• Reverse Mortgage Scams — Reverse mortgages are being advertised as a solution for elderly homeowners who need financial assistance. While a reverse mortgage may be a good option for some seniors, some companies are not reputable. Before agreeing to any mortgage or signing any documents, your loved one needs to understand the “fine print.” It helps to have a trusted attorney, who you hire, to review the documents before signing them.
• The Government is Calling — Another popular scam is for a caller to state that he or she is with the government calling because of unpaid parking tickets, taxes, or failing to appear for jury duty. The caller threatens to take further action, such as arresting the senior or seizing property, if the fine is not paid Of course, the caller accepts all forms of payment by telephone. Remind your seniors that the government does not do business by telephone — government agencies send letters. The best thing to do is hang up without talking to the individual. After hanging up, the senior can call the government office referred to by the caller directly or ask a relative for help.
• Pre-Paid Funeral and Burial Plans — “You can prevent your children from dealing with the burden of how to pay for your funeral costs by prepaying at today’s rates.” This is just one of the reasons scam artists use to convince elderly adults to prepay burial costs. While some of these plans are legitimate, the industry is also full of scam artists who collect the money and “disappear.” If your loved one wants to prepay costs, work with a local funeral home that has been in business for many years and read the fine print regarding what happens if the business ceases operation before your loved one passes.
• Immediate Questions — A somewhat new scam begins with a call asking, “Can you hear me?” or “Are you the homeowner?” Any question that can elicit a “yes” response can be used in this situation. The purpose of the call is to obtain an affirmative response to the question so that the response can be recorded and used in various ways. In many cases, the scammer already has personal information and desires to have your voice recording to approve changes or credit charges. If you dispute the transaction, the scammer has your recorded “approval.” If someone begins a telephone conversation with a question, hang up or ask questions in response. Do not affirm any information on the telephone unless you are absolutely sure who is calling.
• Healthcare Scams — Medicaid, Medicare, Social Security, your health insurance provider, nor your doctor will every need you to provide your personal information by telephone. Hang up and call the provider yourself to determine if this was a legitimate call.

Tips for Avoiding Senior Scams

It is good to review this information with your loved ones on a regular basis. Seniors can forget how to handle various situations. Remind your loved one that:

• Offers that appear to be too good to be true are usually a scam of some type.
• It is never safe to give personal information over the telephone, especially financial information, to unsolicited callers.
• If a caller tries to threaten you or create a sense of urgency, you should immediately be suspicious of the caller’s true intentions. Never give information to callers until you confirm who is calling you.
• Some charities are not charities at all. Some organizations only give a small percentage of the money they receive to help those in need. Before donating to charity, it is best to research the organization to determine how it benefits those in need.

Ways You Can Protect Your Loved One from Scams

There are several steps you can take to help protect your loved one from scams. Financial scams and financial abuse is a form of elder abuse, and it is against the law. Report any suspected abuse to the authorities, major credit bureaus, and financial institutions immediately. Steps you can take to help prevent this type of elder abuse include:

• Durable Powers of Attorney allow you to review your loved one’s financial statements and accounts on a regular basis to look for signs of fraud or financial abuse.
• Revocable Living Trusts can protect assets, avoid probate, and make managing finances and property easier for seniors.
• Irrevocable Trusts can also help prevent fraud because even if a scam artist tries to trick a senior into signing over authority or title, it is not valid because the trustee legally controls the property. Furthermore, some trusts can help with Medicaid planning.

For more information about estate planning documents and tools that can help protect the elderly from scams, contact The Elder Care Firm of Christopher J. Berry, CELA at 888-390-4360.