Why do scammers target the elderly? Many elderly grew up in a time when it was considered impolite to hang up the phone or turn down someone in need; as well, many of them have sizable nest eggs that criminals want to pillage.
According to a recent survey by the Investor Protection Trust, more than seven million Americans over 65—that's about one in five—have been the victim of financial fraud of some kind.
Fraudsters often come across as genuine and likable (mostly at first), despite the fact that they are hardened and unfeeling criminals who don't care what pain they inflict on people.
Though the elderly are stereotyped as lonely and financially incompetent, that is not always so. Even knowledgeable elders get swindled, because criminals are often masters of persuasion. And often, they simply wear people down through relentless targeting.
Perpetrators aren't always strangers, either. A sizable percentage are actually friends, family members, or neighbors, and they prey on seniors who have memory problems, a reluctance to seek justice, or declining mental capacity.
Types of elder fraud
Scammers have a wealth of possibilities at their disposal:
Mortgage fraud and reverse mortgage fraud
Health and anti-aging products, and prescription drugs
Health insurance or Medicare fraud
Telephone fraud—charity scams, fake accidents, sums of money to share, etc.
Free lunch seminars
Funeral and cemetery fraud
Annuity or investment fraud
Charity scams, especially in the aftermath of major natural disasters
False medical bills
Offering fake medical tests at locations around town
New "best friends" who are giving "financial advice" (but are actually taking money)
How can you spot it?
Elder fraud has many of the same signs as any other fraud, including heightened sales pressure, an appeal to urgency, a demand for immediate payment, an assurance that you don't need to check out the opportunity with anyone, and an assurance that you don't need to get any information about the company before doing business with them.
But it is also tailored to the elderly, so expect to encounter products or services more popular among the elderly.
How to avoid it, and how to respond if you are defrauded
Resist any pressure to act quickly or make decisions right now. A legitimate salesperson will respect your decision to think it over.
Research any "opportunity" online by discussing with knowledgeable friends or by consulting an investment advisor or attorney.
Don't wire money based on a request made over the phone … especially overseas. You will likely never hear from the requester ever again, and you won't get your money back.
Don't sign blank insurance claim forms.
If you have been defrauded, or if you suspect you have, file a complaint. You have several options:
The Internet Crime Complaint Center
The Federal Trade Commission
The Financial Fraud Enforcement Task Force
The law is well attuned to elder fraud and investigates on behalf of the elderly. Doctors are often aware as well, especially when one's mental state is suspect.
This content was created in partnership with the Financial Fitness Group, a leading e-learning provider of FINRA compliant financial wellness solutions that help improve financial literacy.
Read more information and tips in our Planning section