Senior Scams Hit Victims With $2.9 Billion in Annual Losses

Thursday, 16 Jan 2014 09:19 AM

By Michelle Smith

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Seniors are prime targets for scammers and their tactics are getting bolder and more treacherous, warns USA Today.

Financial abuse of people over 60 costs victims about $2.9 billion per year, according to MetLife's research.

Seniors need to be more vigilant and a good way to start is to know about popular scams.

There's the advanced fee scam, also known as the lottery scam, where perpetrators call and inform victims they won a prize. To access their winnings, the victims are told they must first pay for fees, taxes or insurance, Angela Byers, financial crimes section chief for the Federal Bureau of Investigation, tells USA Today.

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The victims never get their winnings after paying the up-front costs because they never played the lottery in the first place, she says.

With the grandparent scam, Byers explains that the perpetrator will call, posing as a grandchild in a crisis situation.

The caller says he urgently needs money, which often needs to be wired to another country. The caller is often crying and begs the victim not to tell his alleged parents. After the victim wires the money, the perpetrator will call back seeking more, Byers says.

“People are so willing to help their grandchildren, they will do whatever. They don't ask questions,” Doug Shadel, AARP Washington state director and expert on senior fraud, tells USA Today.

Marion Summers, senior fraud expert and independent consultant, explains how seniors are often duped with the medical scam.

The scammer calls saying a company is running a special on medical equipment, such as a heart monitor or wheelchair. To take advantage of the deal, the victim is asked for a deposit, personal information or his Medicaid number.

Not only does the medical equipment never arrive, but the perpetrator has your personal information, says Summers. People need to be as protective of their Medicaid information as they are of their Social Security number, she told USA Today.

Since low interest rates mean savings are barely growing, some seniors are desperate to find yield. Instead, many fall victim to financial scams, CNBC reported.

In one case, Kathleen Rehl, author and a certified financial planner, explained that her elderly aunt realized her CDs were yielding very little. When they matured she gave the money to her friend's nephew supposedly to purchase “a huge amount” of Iraqi dinars. Not only did the man vanish, effectively scamming Rehl's aunt, but he also used the scheme to swindle his own aunt.

Seniors are also susceptible to charity scams, CNBC says.

The victims believe they're in contact with legitimate organizations. But the scammers' e-mails actually contain malware, which steals identifying information. Or, sometimes perpetrators call, exacting pledges and credit card information.

With roughly 10,000 Americans turning 65 every day, financial fraud targeting seniors is growing increasingly common, CNBC warns.

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