As society’s most vulnerable, senior citizens are often targets of fraud and financial scams. The following is a list of scams commonly targeted at seniors:
Prize and Sweepstakes Frauds
Usually this scam begins as a congratulatory phone call or letter informing an individual that he or she has won a large sum of money, but that there are fees, taxes, or shipping charges before one can claim the “prize”. In the end, the prize never comes, or the items that do are essentially valueless.
According to Lois Greisman, an Associate Director in the FTC’s Bureau of Consumer Protection, nearly 12,000 older consumers complained to the FTC in 2004 that they had lost almost $35 million in fraudulent sweepstakes/prize winnings, with the median loss being around $2,000. She goes on to explain, “these frauds can be devastating to consumers who sometimes cash out retirement funds to claim their purported prizes”.
A fraudulent investment scam occurs when a company or individual “guarantees” an amazing return on an investment, business opportunity, or other “no-risk” venture, but disappears with the funds, leaving the investor high and dry.
Home or Auto Repair Scams
A stranger knocks on your window offering to fix your roof, garage door, or dent in your car. After you hand over the payment, the work is either not completed, poorly done, or was not necessary in the first place. Some scammers even try to bill later for work that was never performed.
Charitable Donation Scams
Scam-artists will create fake charities touting good deeds to secure your donation. The best way to avoid this trap is to only donate to charities you are familiar with, or consult the Better Business Bureau (BBB), which maintains updates on legitimate national and local charities. The BBB can be found online at www.give.org .
Loan or Mortgage Fraud
These scams usually involve “predatory” lenders (typically from the non-bank industries) employing misleading sales tactics to provide high-cost loans to consumers in need of cash. Oftentimes, this includes older homeowners who are concerned about paying bills. Senior borrowers are pressured into refinancing the loan multiple times, incurring substantial processing fees. Those who have collateralized their homes and cannot afford to repay the loan resulting in foreclosure.
Here, the scammer will go through records at the local courthouse to obtain a list of homes in the area that are facing foreclosure. He/she will then approach the homeowner offering help. Instead of helping the homeowner avoid foreclosure, the con artist executes a fraudulent deed transfer and literally steals your house. Seniors who have been victimized by such scams are oftentimes too embarrassed and ashamed to report them.
This scam preys on unsuspecting seniors by exploiting their more trusting nature. Unlike the scams above, it doesn’t involve selling anything, but rather, the fraudster is asking for assistance, and in the process gains access to valuable personal and bank account information, draining the account dry.
AIDIKOFF LAW is an Elder Abuse litigation firm in Los Angeles, CA. Call us at (800) 981-5932 for a free consultation.