It would be nice if bad credit could be repaired with the wave of a magic wand or making a few of your payments on time. However, as a Federal Trade Commission’s Consumer Informa… Read More
While it might be trendy to say, “Ok, Boomer”, Baby Boomers are wising up to the realities of the digital age and the risks within it. 2020 is a great decade to be a senior, but scammers and fraudsters are becoming more sophisticated. Although the FTC reports that seniors and the elderly are proving doubters wrong and reporting online criminals and consumer fraud at ever-increasing rates.
There is still a catch:
Seniors who are scammed lose far more money than consumers from any other age group.
If you’d rather keep $2k in your pocket, this is how you can protect your home, family, and life savings. The only thing you should have to worry about in retirement is the next trip you want to take!
Next time you grow tired of people doubting your decision-making abilities, due to your age, let them know the facts.
People who are Baby Boomers on up are the least likely of ANY AGE GROUP to lose money to scams. Similarly to 2018, when consumers ages 60 and older spotted or encountered scams in 2019, they avoided losing money at twice the rate of those ages 20-29. Even better, the results of the FTC’s 2018-2019 report bolsters the idea that education and awareness campaigns do help.
Unfortunately, as you can see below, adults over the age of 80 had the highest median loss at $1,700.
Everyone from the AARP to the FBI, and FTC are spreading the word about senior financial scams. “Protecting Older Consumers 2018-2019” was not guesswork. It is a detailed October 18, 2019 report by the Federal Trade Commission that was given to Congress.
According to that report:
Older adults were nearly 20% less likely to report losing money to fraud than consumers ages 20-59. This suggests that older adults may be more likely to avoid losing money when exposed to fraud AND more inclined to report fraud when no loss has occurred - or a combination of those and other factors.
However, these statistics on their own do not solve the broader scope of the problem. Even as those reports make the case that older adults are less likely to fall for consumer fraud, 2019 has ushered in some very alarming statistics.
The amount of financial loss for seniors age 60 and up has increased, and people age 80 and up are losing so much money that it’s ruining their lives. Out of consumers who were age 60 and older, 256,404 reports were filed with the FTC for a cumulative loss of almost $400 million.
The amount of financial loss that people ages 20-59 experience versus people ages 60+ is staggering. Per both age groups, financial loss in categories such as romance scams and imposter (business) scams were equivalent or close. However, tech support scams, online shopping scams, prize/sweepstakes, fake check scams, and others were very different in how much was lost.
The median individual loss for people ages 60-69 was up by 20% for the same year. In individuals ages, 70-79, the (per person) median loss was up by 24%. Those who are 80 and over had it worse, with a median loss increase of 55%. These figures are devastating since that puts the median individual loss for people ages 80+ at $1,700 per victim.
Ring, ring! If your phone rings with an unidentified number, it might be safe to assume it’s a scammer. For people ages 60 and over, who received contact by phone, online, email, consumer-initiated contact, and mail, the list popular contract method is phone calls (190k). Out of those 190k fraud reports, 15k resulted in financial loss.
If that wasn’t enough to give you a few grey hairs, worrying about your friends, partner, parents, and grandparents might. The FTC knows that even with all their efforts to prevent and educate about scams, there are still fraudsters who will fall through the cracks and locate elderly victims.
If someone ages 60+ in your life (or yourself) is unlucky enough to lose money, how do they lose it? The most common method is through credit card payments (29%, equaling $42M in loss). However, the method which loses the most money is 15% of wire transfers, which equals $134M in monetary loss.
Losing money to a foreign or domestic scammer can wreak havoc on anyone’s life and may be particularly devastating to seniors on a set budget, with no new income coming in.
Cash is still a favorite of scammers, as it can be hard to trace. For people ages 70+, 25% of those who fell for a family and friend imposter scams gave cash, while only 4% of people ages 70+ gave money to other types of fraudsters.
How does the FTC compile their data?
It is through the Consumer Sentinel Report, which is 2018, collected almost 3.1 reports about fraud (1.5 million), identity theft (444,383), and “other” types of fraud (1.2 million).
As our world becomes more tech-based, older adults are online and using apps and technology more and more. This frequent use makes them most prone to scams involving tech support, prize/sweepstakes/lottery scams, and family and friend scams. Scams also happen when they pick up the phone. These are the seven most common scams that seniors fall for and what they are.
If you see a medical insurance plan offered for seniors, you might assume it’s legitimate, but scammers have found a way to trick those seniors age 65 and over. They pose as health, medical insurance, or Medicare representatives. Scammers use Medicare as their cover, and the AARP reported that Medicare fraud loss was at $60 billion in 2017.
This type of scam increases around the Open Enrollment period in the fall. These scammers and crooks are easy to please – they’ll be happy with your money or Medicare’s money! They might try and “verify” your information and then steal it and file for refunds or false claims.
Other times, they will sell your information, and someone will impersonate you – or they’ll obtain an expensive medication, services, and equipment under your name. This could result in your benefits being denied when you do need service or medical supplies! In a medical emergency, this could be a disaster! Health insurance scams might sign you up for additional services you don’t need or that don’t have any real benefit for you.
Arthur Bretschneider, CEO and Co-founder of Seniorly gives us insight on Medicare and health insurance fraud:
Because every American over the age of 65 automatically qualifies for social security, scam artists don’t have to do any research about what private health care company you subscribe to. So that makes it easier for them to set up Medicare scams.
Posing as Medicare representatives, these perpetrators get seniors to give them information on the phone, online, or sometimes at the front door. They may even offer bogus services with makeshift mobile “clinics”, then using the personal information they collect, bill Medicare, and pocket the money.
You receive a call or robocall about your computer, email account, wireless internet, or computer virus scan. The caller asks if you’ve been experiencing any delays or hesitations on your device or network. Since you don’t realize you’re dealing with a potential fraudster, you’ll likely say “yes”, as most people experience those problems from time to time.
Other times the caller may explain that you’ve been hacked or are at risk for a data breach, and they’re calling to secure your account. Unfortunately, none of this is accurate, and the individual you’re dealing with is trying to gain access to your system and your money.
There are several ways they do this. If they’re a hacker – wanting to thieve your identity – they might instruct you to give out personal information, download malware, or allow remote access to your computer.
Once that happens, they can hack your personal data such as credit card information, social security number, driver’s license number, and more. Other tech support scams use common computer problems as a reason to trick you into paying – over the phone or online – for unneeded, unnecessary tech support services.
The caller might have you perform a basic task while they’re on the line and say they are diagnosing or even repairing your system. They will push for you to pay them by gift card, prepaid card, cash reload card, or to transfer money through an app.
Their goal? They want you to pay by methods that will quickly generate for them and be difficult for you to reverse or undo!
Allan Buxton, Director of Forensics at Secure Forensics offers his insights on tech support scams:
Seniors are targeted primarily because they’re usually unfamiliar with modern technology. They lack experience with the Internet because they didn’t grow up with it and are therefore more easily confused with the terminology. More importantly, most scammers play the short game, pushing for an immediate resolution to whatever the problem is (buy our antivirus, pay your tax penalties over the phone, buy off the hit man), etc.
To avoid getting scammed, don’t buy into the rush. Slow things down. Ask for the issue in writing. Forget the penalties threatened, just tell them you’re not doing anything until you’ve run it past your lawyer, accountant, whomever.
Seniors on a budget might want to limit the fees and interest rate for their credit cards and loans, but credit card interest reduction scams aren’t the way to do it. Many consumers find their voicemail box full of these sorts of telemarketing spammer calls. The FTC knows that skeptical consumers are more likely to stay safe.
The truth is that most phone calls of this variety are scams. This is how it works. You will receive a sales pitch/claim that you’re talking to a representative for a legitimate company with a special relationship with insurance companies.
They will offer you reduced rates so you can (finally!) pay off your credit cards. Limited time offers are their big draw, and, because of this, the FTC has implored the public to recognize that consumers have the same ability and resources available to them, without getting help from a paid company.
The FTC’s Telemarketing Sales Rule does not allow companies to charge a fee before starting debt relief help. However, money placed in a specific bank account administered by an “independent third party” is allowable, should the company handle credit card payment transfers and maintenance.
Even in retirement, many seniors are interested in earning extra money. Unfortunately, scammers create schemes that will seem easy at first glance but are disastrous upon further inspection. These schemes can include pyramid scams, home medical billing, work at home business offers, envelope stuffing schemes, mystery shopping scams, government job scams, and more. You might be asked to pay a fee upfront to receive a list of business opportunities (most of which are illegitimate or useless) or redirected to a website which will phish your personal information.
The FTC wants consumers to beware that scam artists likely run most work at home opportunities and pop-up business opportunities. Classified ads also create fake job offers, beware of requests to pay for the job or deposit a check or overage and transfer the money to your employer.
Not only does the FTC want seniors to be careful, but MoneyGram and Western Union do too. All money transfer and wire services, along with financial institutions, know that consumers can and will be extorted from.
Seniors might wire or transfer money to someone they have a personal connection with online (via romance scams) or for an internet purchase (such as buying a vehicle). Sometimes seniors believe they’re sending money to a loved one or relative when it’s a scam artist posing as their grandchild and their fake attorney or police officer.
Other times, seniors receive a check in the mail and are asked to transfer the funds. As it is a counterfeit check, it may not be realized until you deposit it, transfer funds, and get charged bank fees and deducted the sum you transferred. The short version of this long story is to beware of money transfers as it can be a form of fraud.
You hear about a fantastic property or rental. It’s near your grand-kids and offered at a great price. The owner sends you pictures of the property and the address. You drive past, and it’s precisely what you’re looking for. Since the owner is traveling for work and out of the area, they ask for you to submit your information and send them a deposit via cash through the mail, through money wire or app transfer.
Unfortunately, several things can happen. When you submit your credit report and app by email, you will expose all your information to the fraudster. They might use it to open fake financial accounts in your name or sell your information. Either way, you have then been a victim of identity theft. Or, they keep any money you send them.
The property was never theirs, to begin with, and a foreign scammer usually runs the scam. Other real estate scams can involve reverse mortgage scams that won’t be the best offer available and may allow you to lose equity in your home. Property tax fraudsters sometimes send out fake letters to make it sound as though the letters have been sent on behalf of the County Assessor’s Office to charge a fee for property reassessment.
An excellent way to think of negative option marketing is “buy now and pay forever”. This type of scam works when customers don’t say “no” on the phone. Instead, the consumer agrees to something free and straightforward, such as a one time sample or credit report.
Once they access the report, they are suddenly signed up for ongoing paid fees. This type of scam can happen when you buy any product that signs you up for ongoing delivery monthly, until or unless you opt-out. A book club might send you a book, and then, if you don’t return it, you owe them money.
Or, perhaps you buy a product and don’t realize an extra box is checked, which has now signed you up for additional services or items. Automatic billing is often part of negative option marketing. Even companies that people trust take advantage of this type of billing.
Doesn’t everyone want to look and feel their best? However, anti-aging and health claims trick seniors into useless products, overpriced products, or products that will keep renewing monthly without their consent – similar to negative option marketing. These products can even be dangerous, such as fake Botox or products that serve no actual value but are marketed and sold as healthy.
Anti-aging and health claim scams typically tell lies, and false claims are used when advertising. The goal of the scammer is to collect cash from people and make them trust the sales associate they’re buying from. This type of scam strikes everyone age 40 and up. Still, seniors may not realize the fraud until they’ve already lost significant amounts of money.
Seniors in 55+ communities get a postcard claiming to be from the government, stating that there is an approved final expense life insurance program that is now approved by the government to help pay for a senior’s final expenses. These final expenses usually mean funeral costs for when they pass for as much as $15,000 approved.
They are then told they have to complete a form within five days of receiving this letter, which asks for personal information. The application also requires a “small fee” to be able to qualify for the final expense life insurance. With the personal information and fee, scammers can then perform identity theft and steal even more money from these innocent seniors.
The following are recent, relevant settlements with the FTC related to senior scams. Each of these examples provides seniors and their families with cautionary tales about what to look for, avoid, and how to handle similar situations.
Like anyone, seniors are susceptible to misleading advertising, such as with the FTC’s case against Hite Media Group, LLC. The FTC settled with the defendants at Hite Media Group, LLC, over their fraudulent grant scheme. The con targeted seniors and those with disabilities who wanted help with personal expenses.
The only “help” those consumers were offered was upfront fees that could be anywhere from hundreds to thousands of their hard-earned money! Hite Media marketed the money these individuals paid as giving them a “grant”.
Per the FTC’s claims, a settlement was reached, and the courts ruled that one lead associate at Hite Media Group, Michael De Rosa, and his other coworkers were permanently restrained and enjoined from advertising, marketing, promoting, or offering for sale, or assisting in the advertising, marketing, promoting, or offering for sale of, any Grant Product or Service, whether directly or through an intermediary.
Scams can come in a variety of forms; in this case, the company made false or misleading statements to obtain or maintain a Merchant Accounts and pretend to be “competent” about goods and sales offers.
When we warned you about sweepstakes scams, we had good reason. The FTC and the State of Missouri recently settled their March 2019 case against the company, Next-Gen, which impacted and targeted older adults. Sweepstakes scams at Next-Gen included, according to the settlement, “distribution of deceptive sweepstakes, games of skill, sweepstakes newsletters, and other prize mailers to consumers.”
The Defendants had to agree to give up $30 million in cash and never work in any prize promotion business again. Restitution/refund money will be used to help the victims since the settlement mandated the return of over $21 million, along with luxury homes, a yacht, personal property, and a high priced Bentley.
While one would hope that seniors would be treated with respect and honesty from the companies or individuals they trust and rely on, the FTC’s court settlement with LifeWatch states that the company was “abusive and deceptive”. Most frightening, the company sold and promoted safety equipment, including alarm systems such as Safe Home Security Inc. and MedGuard Alert, Inc.
According to court filings, the defendants used robocalls to call numbers that had not signed up or agreed to calls and marketed their products. They used a pitch or script which promised “free” medical alert systems when that was not the case. The judgment was for $25.3 million. The defendants were ordered to pay $8.9 million, and they cannot market or sell or telemarket products or services again.
No one wants to receive robocalls, but many of us don’t have a choice. Life Management Services, Inc. kicked it up a notch when it came to robocall scam. They eventually settled with the FTC and the Florida Attorney General’s office as they had attempted to “bombard” consumers with “bogus credit card interest rate reduction services”. They would try and sell these using a specific debt-elimination script for consumers age 60+.
The FTC.gov guide reports:
The settlement permanently bans 17 Life Management defendants from engaging in telemarketing and debt relief services. It also imposes a judgment of $23.1 million against them, jointly and severally, which will be suspended after they turn over virtually all their assets.
The ringleader of the scam, Kevin Guice, paid the most with a “permanent injunction” and monetary “relief” against him.
While young people can just as easily fall for this next scam, its subject matter left seniors most at risk. Triangle Media Corp dealt in the world of anti-aging scams. Their crime would not last forever, as they recently had to turn over $9 million in assets to the FTC, in what was considered a “worldwide negative option scam”.
The company would offer a free trial of anti-aging products (cream) and supplements, but the “free” part was untrue, and people would lose money. To protect consumers long term, those listed as Defendants on the case were barred from similar or future illegal conduct.
When you receive an email with typos or misspellings, it is safe to assume that it’s likely not what it seems or claims to be. This is also true when the language appears to have been created by a foreign scammer and not from a legitimate organization.
Holly Zink from Safeguarde gives us a few signs to look out for scams:
When a deal or opportunity seems too good to be true, it usually is. Be wary of anyone saying they have a once in a lifetime deal for you, especially if they ask for your personal information to get it.
The number on scam red flag is when someone says you need to send them money before getting something. Lottery scammers often use this technique on the elderly.
In scam and phishing emails, scammers will often copy an actual company website to make their offer seem legitimate. Some signs the site is fake are that it doesn’t have social media icons, and the site is not secure. By doing a simple Google search of the company, you can see whether or not it’s the official site or fake.
However, some scams (via phone, email, or web) can be sophisticated and look like duplicates of real government bodies, businesses, or professional sites. Due to that confusion, use the following additional tips to determine cons from actual companies!
Don’t give out your credit card, personal, or banking information over the phone. Assume that any unusual calls you receive might not be what they sound like. Even if the caller says they are from an official organization, ask for a call back number and verify it is correct online. Do not trust a phone number just because it appears in caller ID, as scammers can use caller ID spoofing to cause fake numbers to look like they are from a genuine organization.
You will never be asked to pay a fee for a legitimate prize. If you receive a call about an award of winnings, ask for follow-up in writing and check the fine-print and websites associated with the prize.
Links in emails or on websites are called hyperlinks, and they can say a word or location different than the actual web address or URL. Watch out for web pages that impersonate legitimate sites – government sites end in .gov.
You should also share your experience and report any fraud or suspected fraud to the FTC:
Luka Arežina Co-Founder of Data Prot has this to say:
Statistics show that by March 2019, more than 14 billion data records have either been lost or stolen online, which is even more reason to be extremely cautious online.
One of the most common ways for hackers to access your data online is through public WiFi networks. A lot of free networks have deficient safety, which makes them ideal for different types of breaches.
One of the ways you can protect yourself from these types of attacks is to either avoid public networks or limit your activity online in case you don’t have a choice but to use them. This means avoid online purchases or any type of activities that will expose your credit card number, passport, and ID information, or sensitive passwords.
Sarah Feldscher, Founder & CEO of Total Senior Services in Saint Louis, MO offers us the following tips:
You should also heed these tips:
Do you feel confident about avoiding scams, the more you’ve learned? Financially secure people often have enough money in the bank to take risks, but scammers can drain all of your accounts, deplete your life’s savings, and put your housing at risk. This can also impact your credit and risk identity theft. When you receive a suspected or suspicious phone call, immediately hang up the phone or do not reply.
Report internet scams, phone scams, or suspected scams, mainly when they result in financial loss. Contact your police department if you feel your safety is at risk or if you receive threats, and file a report. Most importantly, learn how to prevent all this from happening in advance through an algorithm based search.
Just like the Federal Trade Commission makes it their mission to research the rate of consumer fraud, Social Catfish makes it our mission to educate the public. You are not alone when you encounter fraud or cons, on or offline. Search phone numbers you receive calls from, email addresses that message you, photographs, names, and usernames at Social Catfish.
We help people who suspect they’ve been scammed or conned gather the data they need for law enforcement or to send over to the FTC. Find out who you’re dealing with, through a high powered algorithm-based search, today: