How to Avoid Senior Financial Scams
It’s a sad reality in today’s world that many seniors are vulnerable to financial scams. The Bloomberg reports that the elderly collectively lose $37 billion annually as a result of scams, as scammers often prey upon them due to their vulnerability. They are targeted by faux telemarketers claiming they’ve won a prize that can only be claimed by sending over their information and money by online scammers, fake insurance companies, and even their own families. Seniors often have difficulty protecting themselves against these scams, as they may have trouble determining whether someone is legitimate or merely trying to get their money.
One of the worst stories comes from a woman named Marjorie Jones, an 82-year-old blind woman who lived alone and had hundreds of thousands of dollars, her entire life savings, stolen from her as a result of a financial scam. She first received a call telling her that she had won a prize and could earn her prize once she had paid a certain fee. However, over the next couple of weeks, the calls kept coming, and she ended up draining all of her savings as a result of the scam. Marjorie was one of the 5 million seniors in America who are annually exploited financially.
The term “Age-Associated Financial Vulnerability” was coined to define the unwise financial decisions that certain seniors tend to make that ultimately put them at risk for financial losses that may alter their quality of life. Even if your loved one was financially savvy when they were younger, as they age their financial judgment may dwindle before their everyday judgment does. So also if they appear to be fully capable of making sound day-to-day decisions, their capability for making sound financial decisions may not be as strong. Financial security for seniors is an incredibly important thing, and so you must ensure that your loved ones do not become vulnerable.
We’ve provided you with our best financial advice for seniors by compiling a list of some of the most common scams that target them. Being able to distinguish these scams and knowing what you can do to prevent them from happening will help you keep your loved one safe and financially secure.
1. Health Insurance Scams
One of the leading financial scams that seniors are targets for is Medicare or other health insurance scams. Because every US citizen over the age of 65 qualifies for Medicare, many scammers conduct Medicare scams and will go after them to try to get their money or information for a fake insurance plan. Sometimes they will go door-to-door, place phone calls, or even send emails, and so it is essential to be vigilant and look for warning signs that they are a fraud. If your loved one is asked that they need to share their Social Security number, pay a specific fee, or if there seems to be anything potentially suspicious, they may be being scammed. To ensure their safety, make sure to thoroughly research and investigate any new health insurance plans or Medicare technicalities beforehand.
2. At Home Scams
Seniors can also fall victim to scams surrounding their homes, whether it’s through mortgage scams or contractors who overcharge for unnecessary work. For mortgage scams, scammers will offer the senior a property assessment to determine the value of their home. However, they will only “access” their homes after the senior has paid a fee, and once they’ve received the money, no real assessment takes place. Another type of scam occurs when contractors offer to do repairs on a senior’s home, claiming that there is something that needs immediate fixing. They count on elderly folks simply trusting them and allowing them to “repair” something that may have been just fine before. Then, the contractors often increase the price of the bill, thinking that the seniors won’t catch that they’re being overcharged. If your loved one mentions that they need something in their house fixed or are looking to have their property reassessed, make sure that the people they’re using are legitimate and trustworthy and genuinely have your loved one’s best interest in mind.
3. The Grandparent Scam
Probably one of the worst of them all, the grandparent scam preys upon seniors who merely want to look after their family. Many seniors will do anything to help their family, and so they are vulnerable to scammers who use their love for their family and manipulate it as a way to get money from an unsuspecting grandparent. Often, the senior will receive a call from an unknown number with the person on the other line saying “Hi Grandma/Grandpa, do you know who I am?” Assuming that the senior will say a name, thus giving the scammer a fake identity and established trust. Then, the “grandchild” will ask their grandparent for money for something that they claim their parents can’t know about, and the senior, who wants to help out their grandchild, will send over the money to the scammer. If your loved one receives a call or even an email from a supposed family member asking for money, have them double check with that family member.
While it’s very upsetting that scammers may try to take advantage of your loved ones, you still have the power to do everything you can to make sure that they don’t fall victim to these scammers.