This blog is about financial scams that target seniors, but let me start with a few facts about this large and growing population.
- 10,000 baby boomers are turning 65 everyday
- There are 46 million Americans ages 65 and older today (2016). In 1880, there were 1.7 million. By 2060 there are projected to be over 98 million.
- By 2056 those 65+ will outnumber those younger than 18.
- 58% of adults 65+ are married; 11% widowed.
- 25% of older adults live alone.
- The oldest seniors are the largest growing group.
- Average life expectancy – women 81 years, men 76 years.
- 2/3 of all people 65+ in the history of humanity are alive today.
- Only 22% of those over 65 need some form of Long Term Care service.
- Annual Long Term Care costs in Arizona range from $36k to $87k depending on setting and services needed
- Falls are the leading cause of accident injury in the US, resulting in 2.8 million injuries treated in emergency departments annually 800,000 hospitalizations and more than 27,000 deaths.
- Alzheimer’s Disease is the 6th leading cause of death in the US and 5th leading cause in Arizona.
- 1 in 3 older adults have Alzheimer’s or another dementia at time of death.
- In 2015, 9 million American 65 and older (19%) were employed, 64% of them worked full time
- In 2014, half of all older households received less than $36,895 in yearly income from all sources
- For the 81% of people 65 and older who were fully retired, the median income (2014) was $18,096
Here are the top 9 concerns for people 65 and older:
- Fear of falling
- Memory loss
- Affordable dental care
- Understanding changes in Medicare
- Maintaining and repairing home
- Transportation costs
- Affordable assistive devices
- Depression and/or anxiety
- Enough income for basic needs
90% of all abusers are family members or trusted others. It is reported that financial exploitation costs older adults in the US $2.9 billion per year. 17% of older adults (6.8 million) identify having been taken advantage of financially in terms of an inappropriate investment, unreasonably high fee for financial services, or outright fraud. Only 1 in 44 cases of financial abuse is ever reported – so true prevalence and cost are much higher.
Top 10 Financial Scams Targeting Seniors
1. Medicare/health insurance fraud – perpetrators may pose as Medicare representative to get older people to give them their personal information or they will provide bogus services at makeshift mobile clinics and use personal information they provide to bill Medicare and pocket the money.
2. Counterfeit prescription drugs – on the internet where seniors go to find better prices for specialized medications. Victims purchase medications that may not help and is some cases may be unsafe.
3. Funeral & cemetery scams – scammers read obituaries and call or attend the funeral service of a stranger to take advantage of he grieving widow or widower by claiming the deceased had an outstanding debt with them. The scammer will try to extort money to settle these fake debts. Another tactic is for a funeral home to add unnecessary charge to the bull such as an expensive casket.
4. Fraudulent anti-aging products – they offer fake Botox or bogus homeopathic remedies that do nothing.
5. Telemarketing – scammer use fake telemarketing calls to prey on older people. Examples include:
- Pigeon drop – scammer tells individual that (s)he has found a large sum of money and is willing to split it if the person will make a ‘good faith’ payment. Often a second scammer is involved posing as a lawyer, banker or other ‘trustworthy’ stranger.
- Fake accident ploy – scammer gets senior to wire funds on the pretext that the person’s children is in the hospital and needs the money.
- Charity scams – money is solicited for fake charity – often after a natural disaster.
6. Internet fraud – pop-up browser window simulating virus-scanning software fool the victim into downloading a fake anti-virus program (at a cost) or an actual virus that will give information to scammers.
- Email/phishing scams – senior receives email message that appears to be from a legitimate company or the IRS asking them to ‘update’ or ‘verify’ their personal information.
7. Investment schemes – pyramid schemes (Bernie Madoff) count on a number of seniors to be victims and fables of Nigerian princes looking for partners to claim inheritance money.
8. Homeowner/reverse mortgage scams – personalized letters that look official containing public information state that a tax is due but with a reassessment (for a fee) the tax will be gone. Revers mortgage scams – offering unsecured reverse mortgages that can lead property owners to lose their homes.
9. Sweepstakes and lottery scams – scammers ask for a payment to unlock the supposed prize. Often seniors will be sent a check that can be deposited but will take a few days before this fake check is rejected. During this time the scammers collect the fees or taxes on the prize.
10. Grandparent scam – scammers call senior and say something like: “Hi grandma, do you know who this is?” Once the scammer connects, they usually ask for money for a financial problem (rent overdue, payment for car repairs …) to be paid by Western Union or MoneyGram – which doesn’t require ID to collect. They often say “please don’t tell my parents, they would kill me.”
If you suspect you’ve been a victim – report it – you may help protect others. You can contact the Adult Protective Services 877-677-1116 – eldercare.gov
I appreciate any feedback for our Values Investors podcast. Please contact me if you have any comments, questions, and suggestions. You can comment here or contact me through Facebook, Twitter, email (firstname.lastname@example.org), or call 520-325-0769. Click here to schedule a free meeting with Bill Holliday, CFP.
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