Financial scams are an unfortunate fact of life. While no one is immune from them, seniors can be especially vulnerable. Many scammers target seniors, assuming they are not tech savvy or that they have high balances sitting in checking and savings accounts. In fact, a recent report from AIG Life and Retirement reveals senior citizens in the U.S. lose about $37 billion per year as a result of financial scams.
Whether you’re a senior citizen yourself or have friends and family who are, you should be aware of some of the most common senior financial scams:
According to the National Council on Aging, seniors make two times more purchases over the phone than the national average, which leaves them especially vulnerable to telemarketing scams. While there are infinite variations of these kinds of scams, recent ones include:
- Grandchild Needs Money – Someone calls a senior claiming to be the person’s grandchild who’s stranded or injured and needs to have money wired to them. They’ll often start the call by saying, “Grandma (or Grandpa), do you know who this is?” When the person responds with a name of one of their grandchildren, the scammer is off to the races. If you receive a call like this, simply hang up. You should also ask your grandchildren to identify themselves by name when they call so you know it’s really them.
- Charity Scams – There’s always some version of this scam going around, but they always spike after a national tragedy or international disaster, like the recent Nepal earthquake. If you feel moved to donate to any cause, do so on your own, rather than responding to a phone call soliciting funds.
Unsolicited Home Repairs
Usually working in teams of two or more, scammers go door-to-door in neighborhoods with high populations of seniors and claim they’ve spotted an urgent home repair issue they can fix. They demand payment in cash up front, then proceed to do shoddy, unlicensed work that often creates a problem where there wasn’t one to begin with. If someone you haven’t contacted yourself comes to your door offering home repair, tell them you already have a trusted handyman who does that work and send them on their way.
Reverse Mortgage Scams
The popularity of reverse mortgages has skyrocketed in recent years, opening the door to fast-growing financial scams targeting seniors. Scammers offer seniors unsecured reverse mortgages and promise homeowners cash or a vacation home (neither of which actually exist) in exchange for the title to their property.
Learn more about how a reverse mortgage really works and whether it’s a good choice for you or your loved one.
If you feel you or your loved one has been the victim of a financial scam or ID theft, there is help available. First, file a police report, and in the case of identity theft, visit the Federal Trade commission’s website and follow their detailed instructions for creating an identity theft report.