Elderly adults lose billions of dollars through financial fraud. To scam a person, you need three conditions to be in your favor:
- Someone who trusts you because of you having something they want
- A plan to transition the resources and control from others to you
- A plan to prevent victims from recovering the losses
Some schemes involve more risk than others, but it’s all about who you scam. A tough target can make the task impossible, while an easy target— the elderly— gives an opportunity.
Some seniors are as easy to fool as a kid. Except that seniors have money and children don’t. Would you rather scam a skilled businessman or a forgetful veteran? Most would choose the latter.
Grandparent Scams: Exploiting People’s Weaknesses
The elderly have gone through a long life and career journey. After decades of work, a retirement plan is just what they need.
Many grandparents expect retirement to be a relaxing destination where you can back off and, well, enjoy life. But many scammers want to take advantage of that calmness, catching them off-guard.
In elder fraud, a con man creates a relationship of trust to abuse of their financial control. The scammer makes easy money, and the senior is left with life-long financial problems.
Millions of elders face this problem, losing a conservative $2 billion a year.
Why The Elderly?
Many weaknesses make the elderly a scammer magnet. Although these aren’t 100% accurate, the following partial truths explain why seniors get into so much trouble.
- Elders are more likely to trust a stranger. Isn’t it ironic? Those who have earned the most experience are more prone to believe the wrong person. The reason could be loneliness or decreased cognition.
- Legacy. Seniors don’t care about themselves as much as helping others. This natural inclination creates a blindspot for bogus charities and pigeon drop scams, for example. And because seniors don’t want to look dumb, their shame blocks them from reporting the scam.
- Forgetfulness. As people age, their cognition decreases. It’s easier to miss patterns, forget past mistakes, and say: “this time could be different!”
- Purpose. The oldest seniors used to live alone with no friends and nothing to do with their time. It can quickly become depressing unless you feel valued in society. Elders who want to prove that significance may fall for get-rich-working-from-home schemes.
- They look at money differently. Retirement plans compensate for the previous decades of work. Veterans stop earning their money and start receiving it. We aren’t saying elders should work harder, but you’re more prone to risk money when you didn’t earn it.
- Scammed again. Unfortunately, falling for a scam puts you on a “sucker’s list,” which leads to more scams. Perhaps the con man has told them to keep the matter in secret, or they’re too ashamed to talk and report it, hence never getting real help.
Once we know the weaknesses, we can create systems to cover those blind spots. What should we do?
Examples Of Elderly Scams
Should we have a familiar monitor for all their movements? Controls won’t be enough to save them from the many senior scams out there. Some people play with emotions, others with financial confidence.
#1 Credit Card Protection
The con man visits the elder himself or makes a phone call. In the deal, he exposes the dangers of losing your credit card and identity theft. If the elder buys their card loss protection program, the agent can recover it anytime in case of loss, in theory.
Unsuspecting seniors fall for the fake membership, which costs around one dollar a month. You give them your card details and enjoy your protection. If you ever lose it, you call their number, and they send you the card.
But there’s no guarantee you will recover the card with the money in it. You can trust your financial data to the right institutions, but scammers will use it to steal your money and accounts.
The senior may find himself with a bad credit report, more debt, and lost social benefits, even linked to illegal businesses.
Here’s our Guide To Credit Card Fraud and Credit Fraud Alerts.
#2 Money Laundering
Criminals need someone’s help to launder their illegal money. The elderly make them rationalize:
“They don’t have much time left anyway. They can handle the risks.”
“No-one will believe that an eighty-year-old has murdered two families. He doesn’t look like a criminal, so he won’t get caught. It’s a win-win!”
“I showed him the scheme, and he wanted to join himself. I didn’t get involved.”
Whatever the excuses are, mobsters get the money laundered, and the elderly are responsible for their crimes. The police force doesn’t care about the details; the linked person will face fines and jail time.
If we avoid that scenario, money laundering can be profitable for the elderly. They can make several thousand as “fund managers” or helping fake charities.
#3 Bogus Charities
A good looking man knocks at your door to sell a charity program. They show (forged) certificates and false collaborations with well-known foundations. That tricks you into believing their organization must be just as legit.
What you find is a phantom agent that disappears forever once he gets his donation. No receipt, no follow-ups, nothing.
Others may pose as real charities with reward programs to pull the pigeon drop scam. They look for seniors in the mall, the parking lot, or public plazas. “Is this purse yours?” It’s packed with cash.
They talk about how it will help their charity. Then, they make you the impossible offer: help our charity with, say, $200, and we will give you all this cash as a goodwill symbol.
The money is fake, just as the charity is. How to avoid fake charities?
#4 Travel Scams
When traveling to cultural cities, it’s not rare to find aged tourists in every corner. What better way to retire than living experiences in far countries?
If you have bad luck, the unknown may turn into a scam. You won’t have to look far to spot fake hotels, taxi scams, bogus travel agents, and so on. We doubt you’ll lose all your money on one tragic scam. But the tricks are widely practiced in some cities.
If you’re not careful, those unexpected losses add up quickly.
Learn more about Travel Scams here.
#5 Investment Scams
You have aged and earned a ton of experience. Why not use it in your favor in the stock market? Don’t worry about the technical side of it; some kind agents will guide you on your way to make millions! For a fee.
To name a few:
- Advance fee fraud. Fake prime banks that offer memberships to seniors.
- Fake HYIPs. Earn +1%ROI a day by putting in your money and doing nothing.
- Selling worthless programs using affinity groups.
Read our guide about securities fraud.
#6 Fake Medication
Pharmaceuticals create profitable businesses. Better health? Different story. Effects depend on the person who takes the medication. Some make no effect, and others do more harm than good.
Elders who barely make ends meet will look for the best medication, preferably at the lowest price. What if you buy from unofficial providers? Risk of dangerous drugs.
Not only they waste money. They take a manipulated pill that may change their lives for the worse.
Read our guide about counterfeit medication.
Also, here’s a complete guide to healthcare scams.
Preventing Senior Fraud: What Can We Do?
Con men never scam without being several steps ahead of the victim. When it comes to the elderly, it’s a fact most won’t recognize the threat.
On the other hand, we can’t always be behind them tracking their movements. They can only get so much help from honest people like you and me. What should they do?
#1 Prepare Yourself
Think of a senior who never fell for a scam nor knows anything about that. If a con man approaches him, he will lack the tools and experience to prevent the worst.
Although it’s basic, nobody should involve in an opportunity without knowing the risks involved. As a senior, you may use a checklist of red flags to look out for whenever they present you with an opportunity.
Don’t hesitate to raise awareness for your older family members.
#2 Have A Trusted Person Revise Your Finances
Investors have advisors, professional athletes have coaches, and entrepreneurs have mentors. It doesn’t hurt to have someone help you along the journey who wants what’s best for you.
This person should monitor you every few days only to make sure everything goes fine. Picking that trusted friend can be difficult; consult with others to choose it. Don’t just pick the first “advisor” that knocks at your door.
#3 Get An Opinion Before Taking Action
A preventive person can follow up on the elder to keep them safe from scams. But if the senior is not preventive, the person can’t protect them when they’re away.
“Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.”
Understand that people are wired very differently. You will find much more insight by asking others rather than making decisions by yourself. Consulting isn’t a weakness, but a smart practice.
Use some rules to guide your criteria:
- If they want you to act NOW, it’s a scam.
- If they want you to keep it private, it’s a scam.
- Wrong until proven right. If they can’t prove it, scam!
Someone you trust won’t have to prove anything to you. But if you don’t trust someone, they’ll have to verify. That logic will guarantee you’re always right.
The Bottom Line
The best thing you can do as a senior or anyone is to question everything. Do not simply assume that the person on the other end of the phone or email is who they say they are. Ask them about their company, where they are located, their license information.
Then take your time and verify that the provided information is accurate and not fake. Do not act impulsively.
When you do this and you are dealing with a scammer you may very well hear a click and a dial tone. If they are legit they will be able and willing to prove it to you.
Seniors aren’t powerless. With enough awareness, the elderly can protect against people’s bad intentions, and keep on the calm life they deserve to live.