In spite of all of the negative headlines these days, there is a wealth of good that has come from the communities during these trying times. Healthcare professionals and essential workers continue to lead the frontlines as we progress through the events of the COVID-19, Coronavirus pandemic.
While individuals and communities rally together to bring some sense to these tense times, there are unfortunately some bad agents who prey on good intentions. In just the first nine days of April, Business Insider reports that the Federal Trade Commission (FTC) has received over 7,200 complaints concerning scams or fraud related to the Coronavirus.
In a time where everyone must be vigilant in staying physically safe, it is also important to protect your online identity and to be able to identify and avoid such fraudulent activity. At My Financial Coach, we feel it is important to stay ahead of trends, and often with the help of our Subject Matter Experts we are able to connect you with relevant information that could help protect your online identity as well as your pocketbook.
We are excited to bring another well thought out guest article that could not be more timely from Wealth Legacy Group®, Inc. Their Founder and Chief Visionary Officer, R.J. Kelly and team of experts have written extensively on a number of subjects covering everything from wealth building, estate & legacy planning, and retirement among so many other financial planning topics.
The following article, which originally appeared on Wealth Legacy Group’s website titled “Don’t Be A Victim of Elder Fraud Abuse”, serves as a preview of the value that their team of professionals can bring to thinking through the many complexities of managing your information and protecting your online identity.
One of our clients recently informed us that his 81-year-old father, who we’ll call “Anthony” (not his real name), had been the victim of fraud. Anthony is an avid computer user; last year his computer screen froze and displayed a message offering to fix the issue and protect his computer for $300. Anthony signed up for the service. Two months later, Anthony received a phone call offering him a full refund because he had not used the service; he was instructed to send them $700 in gift cards because they were not authorized to send a check for less than $1,000. More requests for money followed and Anthony dutifully purchased more gift cards from several different grocery and convenience stores. Eventually, Anthony figured out he was being scammed, filed a police report and contacted the FBI and Federal Trade Commission to investigate the matter. He also had to bring his computer to a store to have them remove the malicious malware. All told, Anthony lost more than $10,000 on the scam and felt angry and upset that he could be so naïve.
This article is very long because there are so many swindles which target senior citizens. We are only scratching the surface as we will only discuss the top ten scams.
Elder fraud is on the rise. According to the Consumer Financial Protection Bureau’s February 2019 report, elder financial exploitation quadrupled from 2013 to 2017!
Why would someone target the elderly? Scammers target older people because they tend to be more trusting, polite and financially secure. Many are lonely and con artists are willing to spend hours of time on the phone to convince seniors they deeply care about them. The fraudsters target the elderly because they believe there is less chance of getting caught since senior citizens are less likely to report a crime because of shame or embarrassment.
No one is immune from elder fraud abuse. One of the more popular scams, as discussed below, is the Jamaican lottery scam. The gentleman from Jamaica who called William Webster in 2014 said he won $72 million in a Jamaican lottery. All Mr. Webster had to do to claim his prize was pay $50,000 in taxes and handling charges. The scammers do their homework before even calling their victims. The fraudster said he knew Mr. Webster had been an attorney and a judge, served in the U.S. Navy, worked for Homeland Security, and even played on a basketball team. While the con artist obtained a good deal of background information, he missed two important job positions: Mr. Webster had also served as the Director of the CIA and FBI and recorded the scammer’s initial phone call and subsequent calls.
Mr. Webster contacted the FBI, and with their help, the fraudster was eventually brought to justice and began serving a nearly six-year jail sentence in February 2019. While the initial calls to Mr. Webster and his wife were initially pleasant, they quickly turned threatening. The scammer eventually made death threats. If you would like to hear an interview with Mr. Webster about the whole ordeal as well as snippets of some of the recorded calls, please click on this YouTube video.
Without further ado, here are the top ten scams which target the elderly . . . .
The number one elder fraud in the Senate’s Committee on Aging Report was the IRS impersonation scam. Fraudsters impersonating IRS officials claim the victim owes money and pressures them to settle immediately. The calls often use a “spoofed” caller-ID so it appears they are calling from the “Internal Revenue Service”, along with the “202” area code for Washington D.C., or a local police department. The con artists claim the victim owes back taxes and penalties and threatens retaliation, such as arrest, foreclosure, or deportation if payment is not immediately made. They request payment by certified check, credit card, electronic wire transfer, prepaid debt card or gift card. Fraudsters have been increasingly asking for iTunes gift cards.
The sad fact is that if victims make an initial payment, they will often be told that new discrepancies have been found in their tax records, which must be satisfied with another payment.
Don’t fall victim! The IRS will never call you to demand immediate payment. If there is a question about your return, you’ll receive a letter, and there is a process to appeal any disputed amount.
Although Congress passed the Do-Not-Call Registry in 2003, brazen telemarketers and scammers continue to disturb Americans with robocall technology. Robodialers can be used to distribute prerecorded messages or connect the call to a live person if the victim answers the call. IRS scammers may use this tactic, too.
Robocalls often originate overseas, and phone numbers are usually spoofed to hide their true identity. Have you recently received a recorded call from someone whose phone number has your prefix? If you don’t recognize the number, it’s likely spoofed and not really local.
The Federal Trade Commission warns against giving out personal information in response to an incoming call. But identity thieves are clever. They often pose as bank representatives, credit card companies, creditors, or government agencies. They hope to convince victims to reveal their account numbers, Social Security numbers, mothers’ maiden names, passwords, and other identifying information.
If you are unsure of who you are talking to, simply hang up the phone. Call the phone number on your account statement or visit the website for the company or government agency and contact them to see if they really need any information.
According to the Federal Trade Commission, the number of sweepstakes scams increased by 45% between 2013 and 2017. Fraudsters usually contact the victim by phone or mail and tell them they have won or have been entered to win a prize. The victim is required to pay a fee to collect their winnings or improve their odds of winning the prize. In Mr. Webster’s situation discussed above, he was told to pay $50,000 in taxes and handling charges before he would supposedly receive the $72 million in Jamaican lottery winnings.
The scammers tell their victims not to share the good news with anyone so it will be a surprise when their families find out they have won a sweepstakes or lottery. Victims are told to send money by prepaid debit cards, electronic wire transfers, money orders and even cash.
How do fraudsters even learn of potential victims? Scammers buy expensive “lead lists,” which identify potential targets. Satellite maps are used to describe the victim’s homes and to make the callers appear to be familiar with the area. In 2015, a 25-year-old Jamaican national living in the U.S. was convicted of selling “lead lists” and was sentenced to 20 years in prison.
While the percentage of successfully scamming someone is usually one in a hundred-plus attempts, computer-based scams have a much higher success rate. Computer tech fraud affects victims of all ages, but elders are often the most vulnerable to these scams.
One of the most common ways this scam works is the fraudster tries to gain the victim’s trust by pretending to be associated with a well-known technology company, such as Microsoft or Apple. (Please note, Microsoft or Apple will never call to inform you they have detected a virus.) They then falsely claim the victim’s computer has been infected with a virus. The scammer obtains permission to have remote access to the victim’s computer, and obtains personal information, credit card and bank account numbers so they can be “billed” to fix the computer virus.
Another common way this scam works is when a pop-pop window appears on your computer screen and says to contact a tech-support agent. Fraudsters use the pop-up window to hack into a victim’s computer, lock them out and require them to pay a ransom to regain control over their computer. This is the same scheme that bilked 81-year-old Anthony, who we discussed above, of more than $10,000 last year.
Bottom line: Do not give control of your computer to a third party who calls you out of the blue. Don’t give them your credit card or bank account information.
According to the Government Accountability Office, seniors lose an estimated $2.9 billion each year due to financial exploitation. Older Americans are particularly vulnerable to financial exploitation because financial decision-making ability can decrease with age. Most victims are between ages 80 and 89, live alone and require support with daily activities. Abuse may arise from family members, paid homecare workers, those with financial responsibilities (such as bankers, attorneys, financial advisers or legal guardians), or strangers who defraud senior citizens through mail, telephone or internet scams.
The elderly are often reluctant to initiate a criminal prosecution against a relative. This leaves a civil lawsuit as the only possible remedy, which can be expensive with attorney’s fees and costs. Furthermore, there is no guarantee that the relative will pay the judgment if the case is successfully litigated.
“Hi Grandma/Grandpa, guess who?” When you respond, “This sounds like ‘Sally’,” the fraudster will pretend to be the victim’s grandchild or will say “she’s” in trouble and needs money to help with an emergency, such as getting out of jail, paying a hospital bill, or leaving a foreign country. If you send cash, expect “her” to call you again, asking for more cash. The scammer plays on victim’s emotions to trick the grandparent into wiring money to them.
Grandparents who have fallen for this scam, in retrospect, wish they would have asked the con artist some simple questions that only their true grandchild would know how to answer.
More and more Americans are taking to the internet to find a partner. While some find love, others find financial heartache. After establishing an online relationship, the scammer will invariably ask for money for a variety of things. It could be for travel expenses so they can visit the victim, medical emergencies, hospital bills for a child or relative, visa or other official documents, or losses from a temporary financial setback. Despite telling their victims they will never ask for money again, something always unexpectedly comes up, resulting in more requests for money.
Some of the warning signs to be wary of are individuals who claim the romance was destiny or fate. Be cautious if an individual declares his or her love but needs money from you to fund a visit. Or they claim cash is unexpectedly needed to cover an emergency. These are all huge red flags.
In the usual case, the scammer calls the victim and says they are from the Social Security Administration. They ask for personal information, such as Social Security number, date of birth, mother’s maiden name, or bank account information. The fraudster will go to great lengths to obtain Social Security numbers and may use the guise of helping to obtain a new Medicare card, completing a disability application, or applying for a piece of medical equipment.
Here are a few helpful tips to avoid the Social Security impersonation scam:
Social Security will not call to ask for your bank account information or your Social Security number
There will never be a fee charged to obtain a Social Security card
Social Security numbers do not get “suspended”
Call the Social Security Administration’s Inspector General at (800) 772-1213 to verify the caller or request
Similar to the IRS and Social Security Impersonations discussed above, the impending lawsuit scam involves fraudsters claiming to be from local, state or federal law enforcement agencies. They often use a “spoofed” caller-ID so it appears they are calling from the sheriff’s department or local police department. The victim is commonly informed that a warrant has been issued for their arrest and unless they pay a fine, they will be immediately arrested. The failure to report for jury duty is often used as the grounds for the arrest warrant. In immigrant communities, the scammers often say the victim has errors in their immigration paperwork and faces immediate deportation unless they pay a fine.
This was the most common type of consumer complaint in 2016, with nearly 400,000 complaints. Identity thieves drain bank accounts, make unauthorized credit card purchases and damage credit reports. Scammers also defraud the government by using stolen personal information to submit fraudulent billing to Medicare or Medicaid, or apply for and receive Social Security benefits to which they are not entitled.
Placing a freeze with the major credit bureaus helps prevent credit cards or loans from being taken out in your name. If you believe you are a victim, call the companies where the fraud occurred, place a fraud alert with the three main credit bureaus (Equifax, Experian and TransUnion), and file a report with your local police department.
If you suspect elder financial abuse, the American Bankers Association suggests the following steps:
Since fraudsters are targeting senior citizens, they need to be extra careful when dealing with the public, whether it is through phone calls, mail or the internet, as well as with any people who are helping care for their health or finances. Our mission is to help you reach your financial goals. We are proactive in our recommendations. But sometimes, a good defense is the best offense. It’s heartbreaking to hear stories of theft. We don’t want you or a loved one to become a victim and another government statistic . . .
Written by Brian M. Mahoney – August 2019
In-House Counsel, Wealth Legacy Group, Inc.
Wealth Legacy Group®, Inc.