Quick summary
When it comes to scoping potential victims, experts say con artists tend to look for individuals who are home during the day to answer fraudulent telemarketing calls, retired people who are hoping for one more shot to increase their nest egg, and those who will be too proud to admit they were "had" and report that they were victimized to the authorities.
Sound like anyone you know?
Older adults are widely acknowledged to be frequent targets of financial scammers. According to a recent survey by the Better Business Bureau, nearly 30 percent of all fraud victims are over the age of 65. Don't feel paranoid if you're worried that your parents or other family members may fall victim to fraud -- you're just being prudent.
Fortunately, there are a number of steps you can take to reduce the chances your family will be victims. Here are some of the most prevalent frauds and ways to help protect the people you care about.
Telemarketing fraud
Telemarketing fraud is probably the most common scam of all. Shady marketers may call the older adults in your family to hawk investment schemes, vacation clubs, or sweepstakes plans, and then pressure them to sign up immediately because the offer is only good for a limited time. Often these marketers will demand some kind of up-front investment or fee to participate, which is always a red flag that the caller is not on the up-and-up.
You can warn your older family members to not give out any personal information or credit card numbers, or otherwise buy anything from anyone over the phone. Some older people have a harder time hanging up on obnoxious salespeople because they don't want to be rude. If this is the case with your loved ones, get them a phone equipped with Caller ID so that they simply don't have to pick up unless they recognize the number of the caller. Also, make sure their phone number is registered with the national Do Not Call registry, which will significantly cut down -- if not eliminate altogether -- the number of telemarketers calling their home.
We recently discovered that my 90 yr. mother of Lewiston, Idaho, loaned over $80,000 to a friend. He had taken her to her bank, Sterling Savings & she closed a money market acct. for over $60,000 & wrote a personal check for $20,000. Both accounts had my name on them & the bank did not alert me. They said since the checks were made out to another financial institution, Potlatch Federal Credit Union in Lewiston, they didn't feel it was anything to be concerned about. The money was deposited into an account in the friend's name & by the time we discovered the withdrawals, the money was gone. We contacted the friend & he said they had signed a promisary note, though at first, Mom could not recall signing anything. We met with him & he showed us the note & she had signed it. We set up a ammortization schedule & we got copies of their signed note. We can only hope that he continues to pay toward the loan & we don't end up losing Mom's savings. The banks were very helpful in helping me discover where the funds went but still didn't feel that anything had been done incorrectly by them. "It's her money & she can do what she want with it." Also, as a result of her seeing her low balance in her bank statement she felt she could not afford to pay the premium for her long term care insurance & the policy she has been paying on for 25 yrs. has lapsed. Just when she may need it the most. She has always been very independent & not agreeable to let us take over her finances in anyway. Although she did agree to sign a durable power of attorney for me since this fiasco occured, she could still sell the house or her car or whatever without our advise/approval to anyone who made a sweet sounding offer. She tends to live in the fiscal sense of 30 yrs. ago, and if someone were to offer her some cash, I'm afraid she might go for it. How can we prevent this from happening? Any advise?
Bankers can set up a checking account that is funded by a second checking or savings account, so that the first account has a small amount in it, say a month's expenses. In the event someone tries to withdraw from that first account, they are limited from taking the elder's life savings. It can keep an unscrupulous worker in the elder's home from stealing unlimited funds by check or from having the forgetful elder write unlimited checks to that person. Additionally, setting up internet access to the accounts can allow you to monitor activity and make account transfers from virtually anywhere, thereby helping your family member manage their account.
This article was OK as far as it went, but there is much more to know. I just returned from a week's visit to my father who lives three times zones away. He had gotten scammed by numerous telemarketers and direct mail solicitors and was thousands of dollars in debt. I spent all of last week trying to get this straightened out. Following up on this article, I suggest the following: 1. Make sure your parents have caller ID and rehearse with them ways to answer, or NOT answer, their phone. I got my dad a phone at Radio Shack that has not only visual caller ID, but spoken caller ID. I programmed the phone with all of his friends' numbers. I worked with him to learn to ignore the phone unless he saw and heard that the call was from someone he knew. I also put a yellow sticky note on the phone with a script in case he answers the phone: "Thank you, but I'm not interested. Take me off your mailing list. Good-bye." 2. Get your parents to go to the bank with you, sit down with a banker. Make the accounts Joint Accounts. Sign up for online Alerts that tell you, daily, what the account balance is, what checks have been written, etc. Get the banker to be your advocate, asking your parent how things are going and monitoring when your parent makes a large withdrawal. The banker told me that they cannot legally prohibit withdrawals, but they can ask, "Are you sure you want to make that large a withdrawal?" Give the banker your phone number and encourage them to call you if they are concerned about activity on the account. 3. Set a low limit on checking accounts and credit cards. 4. When fraud occurs, call the Fraud Division of the credit card company and bank. I was able to recover approximately $2,000 in charges because I told them that my dad had signed up for these things that were unknown companies, had never used the services, etc. It is easier to do it through the bank than trying to cancel these services with individual companies, many of which have no listed numbers or websites. 5. Enlist a local, trusted, person to check in with your parent to look at incoming mail. 6. Stay on top of accounts for a month or so to make sure everything has been credited back and that your parent is no longer making unwise choices. I know that this is a life-long "job" for me now, but at least I was able to get a handle on it before it got any worse.
Perhaps it would be wise to have a little list by the phone for your parents to use in case a call like this is received. What's the name of the outfit again? Phone number? Name of supervisor? Or even just advise them to hang right up. If they get continual calls, they can file a complaint.