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Senior Fraud Prevention
Why Do Older Adults and the Elderly Fall For Scams?

Recently, the United States Attorney's office brought charges against six defendants in the Manhattan Federal Court in the Jamaican Lottery Telemarketing Fraud Scheme Targeting Elderly U.S. Citizens.

According to the allegations in the Manhattan federal court: "The defendants participating in the fraudulent scheme told dozens of elderly victims in the United States that they had won substantial cash prizes in an international sweepstakes lottery, but that in order to claim these prizes, they first needed to pay tens of thousand dollars in fees and taxes. In fact, there was no sweepstakes lottery and the victims never received any cash prize, even after victims sent cash and checks totaling up to $100,000 each to the defendants and their co-conspirators in Jamaica."

Senior Scams
Senior Scams

The co-conspirators bought lists containing information about elderly U.S. citizens, called them, and informed them that they had won the lottery. All the victims had to do to get their prizes was to send payments for certain "taxes" and "fees."

The victims were then instructed to send the money to the defendants by wire transfer or U.S. mail. Victims who sent money were often contacted again by the Jamaican co-conspirators and instructed to send additional money in order to claim their prizes. After receiving money from the victims, the defendants transmitted the funds to their Jamaican co-conspirators either through wire transfers or by carrying cash to Jamaica. See the press release.

Why do our elderly citizens fall prey to scammers?

Experts say a root cause is isolation and loneliness, especially the ones who receive little monitoring or have little interactions with family and friends. The elderly are hungry for social interaction and will talk with anyone with a pleasant-sounding voice and engaging manner. The senior loves the attention and enjoys connecting. Scammers know what to say to gain trust from the older adult.

Cognitive decline is another factor because about one-third of the elderly who are over 85 have issues with dementia. How do scammers find the phone numbers of the elderly people? They buy lists from magazine subscribers since there are no restrictions on selling the names and personal information.

Another factor is financial worry. The elderly are prime targets for being worried about money and if they'll have enough to pay living expenses. So, that puts them at risk for financial windfalls.

Unfortunately, some older adults can't think quick enough, leaving them vulnerable to scams.

Who can help intervene and make sure elderly loved ones are safe from scams?

The family.

Senior Exploitation

Richard Eisenberg a writer for Forbes, recently interviewed William R. Henry, Jr., the co-author of The Crown of Life Society, an intriguing new novel about elder financial abuse. The name of the article is, "How To Keep A Parent Safe From Financial Abuse,"

Eisenberg asked, "What concerns you most about the financial abuse of elderly?", Henry said, "That people are so busy, exploitation often goes under the radar. And there's been a "don't ask, don't tell" mentality when physicians, attorneys, and financial advisers deal with elders. If they don't suspect a problem, they won't ask questions that might uncover a problem and lead to a red flag."

In the article, Henry explains that law enforcement and Adult Protective Services don't know what's going on under their noses. They do their best and very dedicated to elderly safety - but by the time they hear about fraud problems, it's too late after the damage is done.

Henry confirmed that it's up to families to prevent senior scams and fraud that's happening to older parents.

Types of Scams

Types of Elderly Scams
Types of Elderly Scams
  1. Advance fee fraud or "419" frauds
  2. Debt relief scams
  3. Exploitation by a financial institution employee
  4. Fictitious relative
  5. Financial institution examiner impersonation fraud
  6. Identity theft
  7. Misappropriation of income or assets
  8. Pigeon drop - a trick to mark or "pigeon" to give up a sum of money to secure the rights to a larger sum of money.
  9. Power of Attorney fraud
  10. Reverse mortgage scam
  11. Sweetheart scam - trick using feigned romantic intentions towards a victim, gaining their affection, and then using that goodwill to commit fraud. It involves access to the victims' money, bank accounts, credit cards, passports, e-mail accounts, and/or national identification numbers or by getting the victims to commit financial fraud on their behalf.
  12. Telemarketing or charity scams
  13. Unsolicited work

How to help:

Bring up financial concerns, wills, medical directives, etc., and then ask, "Have you changed anything recently?"

Financial exploitation happens in varies ways, discuss with your loved one the various scams that are of high risk:

  • Illegal use of adult's funds, property or assets
  • Cashing checks without permission
  • Forging an older person's signature
  • Stealing an older person's money or possessions
  • Coercing an older person into signing document(s) like contracts or Wills
  • Improper use of conservatorship, guardianship, or Power of Attorney

When hiring a caregiver for home care.

Do criminal background checks on caregivers that your loved one hires for help. When caregivers are in the home, the elderly are susceptible to fraudulent activity. Of course, not all caregivers take advantage of older adults, but it's a good idea to prepare and do proper due diligence. Hide financial and legal paperwork, income statements, and expensive jewelry and other worthy assets.

Caregiver and Family Member Methods of Financial Exploitation

  • Theft of the victim's money or other cash-equivalent assets.
  • Borrowing money with no intent to repay.
  • Cashing or keeping some portion of the person's pension, Social Security or other income checks without permission.
  • Using the victim's checks or ATM, debit or credit cards without permission.
  • Transferring title on, or re-encumbering, real property of the vulnerable adult.
  • Opening or adding their name to banking accounts without the elder's permission

The Red Flags that Scream Fraud - Family Should Keep Close Watch

  1. Changes to Accounts and/or Documentation
  2. Recent changes or additions of authorized signers on a vulnerable adult's financial institution signature card.
  3. Statements sent to an address other than the vulnerable adult's home.
  4. Vulnerable adult has no knowledge of a newly issued ATM, debit or credit card.
  5. Sudden unexplained transfers of assets, particularly real property.
  6. Sudden appearance of previously uninvolved relatives claiming their rights to a vulnerable adult's affairs and possessions.
  7. Discovery of a vulnerable adult's signature being forged for financial transactions or for the titles of his or her possessions.
  8. Refinance of the vulnerable adult's property, particularly with significant cash out or with adding new owners on the deed and, most particularly, without the new owners shown as co-borrowers on the loan.
  9. A set of "out-of-sync" check numbers.
  10. A sudden flurry of "bounced" checks and overdraft fees.
  11. Transaction review shows multiple small dollar checks posting to the senior's account in the same month. This could be indicative of telemarketing or charity scams.
  12. Large withdrawals from a previously inactive account or a new joint account.
  13. Account use shortly after adding a new authorized signer.

Credit/Debit

Large withdrawals from a previously inactive account or a new joint account.

Abrupt increases in credit or debit card activity.

Sudden appearance of credit card balances or ATM/debit card purchases or withdrawals with no history of such previous use.

Read the BITS Fraud Protection Toolkit for more information.

For information on Telemarketing Fraud - Read the FBI Fraud Schemes.

Report Threats and Crime to the local FBI office.

Carol Marak
Carol Marak

After seven years of helping her aging parents, Carol Marak has become a dedicated senior care writer. Since 2007, she has been doing the research to find answers to common concerns: housing, aging and health, staying safe and independent, and planning long-term.