Financial Scams Targeting the Elderly
Of course, older Americans may fall victim to any type of financial fraud. However, senior citizens are often targeted for particular types of fraud, based on certain common characteristics and concerns. For example:
Since most Americans in their mid-sixties or older have Medicare coverage, posing as a Medicare representative is an easy way to collect personal information from older people. Once collected, this information may be used for identity theft, or may result in fraudulent claims submitted to Medicare for services allegedly provided to the victim.
Financial security is a concern for people of all ages, but those who are no longer earning a living can be particularly vulnerable to false claims about investment prospects. This is especially true when the person offering the investment “opportunity” has taken the time to get to know the older person and gain his or her confidence.
Violation of Trust or Fiduciary Duty
Unfortunately, a large percentage of elder financial abuse is perpetrated by family members and caretakers. This type of abuse may take on many forms, such as embezzlement, pressuring the older person to sign over assets or simply taking advantage of the older person’s trust for personal gain.
Reverse Mortgage and Home Equity Scams
Home equity is many Americans’ largest asset. Senior citizens who paid off their homes during their working years have earned the security that asset brings, but are a popular target for financial predators. These scams take on different forms, but center around persuading older people to take equity out of their homes, often for purposes such as unnecessary home repairs.
This is just a sampling of the financial pitfalls facing older people in New Jersey and around the country. The problem is so widespread that pending legislation in New Jersey would criminalize specific forms of financial elder abuse and U.S. Senator Kirsten Gillibrand (D-NY) is pushing for a federal agency to crack down on scams targeting the elderly.
Often, though, the best line of defense is education of the elderly and those who care for them.
Protecting Yourself Against Fraud
Telephone and Internet phishing scams—operations designed to elicit personal information such as social security numbers and bank accounts—are common. One of the simplest and most effective ways to avoid this type of fraud is simply to decline to respond directly to the caller or through a link provided in email. Instead, obtain a telephone number from a trusted source such as your telephone directory or the agency’s own website and call to determine whether they actually need information from you and how you can safely provide that information.
Housing Repair and Other Service Scams
Before investing in expensive repairs or signing on for long-term services on the word of a stranger, do some research. If a free inspection yields the news that your roof needs immediate replacement, invest in a second opinion from a trusted local provider or ask a friend or relative experienced in that industry to get involved in the process. When long-term care or similar services are offered, have an attorney review the contract and research the company through the Better Business Bureau and other reliable sources.
Protecting Your Loved Ones Against Scams
Remember that isolation and unfamiliarity with technology and certain tech-era business practices make many older Americans vulnerable to scams. Checking in regularly with older relatives, offering to assist with financial and technological issues and staying alert to new people in their lives, changes such as an influx of cash, frequent purchases or unexpected home repairs and other deviations from their normal patterns provides your elderly loved one with an added layer of protection.
Milvidskiy Willis LLP provides estate planning, elder law and special needs planning services to New Jersey residents. If you need information or assistance in one of these areas, please contact us.