There are countless ways to commit elder fraud, but many of the scams have similar typology and victimology. In fact, names, telephone numbers and addresses are frequently sold to a “sucker list,” for other scammers to purchase. This can happen when a person takes the bait for even one scam, such as submitting personal information to win an all-expenses paid vacation.
The typical elder fraud victim is more than 50 years old, will often be at home during the day and may be physically or mentally disabled. He or she will likely have a “nest egg,” own his or her own home, have good credit, and may have recently lost a spouse. Victims of elder fraud will be less knowledgeable about regulations and laws regarding finances, and are therefore less likely to report an incident.
Scammers will often pose as trustworthy helpers of some sort – a telemarketer, tradesperson, doctor or caregiver. Scammers can also be family members or close friends with substantial financial troubles due to gambling, unemployment or substance abuse problems.
Financial scams targeting the elderly often involve medical care, trust-gaining activities, and false sweepstakes.
Some scammers will sell counterfeit prescription medicines at discounted prices. Others will convince an elderly person that a piece of medical equipment, such as a diabetes testing apparatus or a breathing aid, is a necessary purchase. One interesting scam is called the “rolling lab” scheme. To perform the rolling lab scheme, a scammer may approach an elderly person in a pharmacy or hospital waiting room. The scammer will then convince him or her to undergo fake or unnecessary tests, which will then be billed to the insurance agency.
Long-term scams may take years to carry out, but will have high rewards. These are “sweetheart scams.” In the sweetheart scam, a fraudster will gain a very close relationship to a wealthy elderly person. Given some time and influence, the fraudster will convince the victim to provide access to bank accounts, transfer power of attorney, or beneficiary of assets.
Deception may also be used to secure personal information and finances in the form of fake sweepstakes submissions, and donations to false charities. For example, when NGOs and charities popped up after the 2010 earthquake in Haiti, a special scam was dubbed the “Help for Haiti Hustle.” Scammers preyed on unknowing elderly victims, wanting to donate or help response efforts. Likewise, scammers may spam potential victims with endless giveaway and sweepstakes offers. Once the victim has responded with personal information (name, telephone number and address), that information will be sold to sucker lists, resulting in more fake offers and scamming opportunities.
Although those described above are threats to be aware of, one of the most common and simplest schemes is the Grandparent Scheme. This has been around for many years, but has improved significantly since social networking sites have become popular. A scammer will look up personal information about a young person on Facebook or LinkedIn, then use that information to trick his or her grandparent into sending money by telephone or email. A more in-depth description of various renditions of the Grandparent Scheme is available on the FBI’s Stories website.
This is not an exhaustive list of elder fraud scams. However, they do have similar characteristics and can be identified by a number of red flags. These include unusual or large withdrawals from bank accounts, checks that have suspicious signatures, forming sudden close relationships, newly executed documents (such as a will or power of attorney), changes in beneficiary or authorized signers on accounts, large numbers of entry forms for contests, and untreated health issues.
There are a number of resources available online for elderly persons or those close to potential victims of fraud. A list of websites is provided below, and keeping an eye out for the red flags mentioned above can help to prevent instances of elder fraud.
The Grandparent Scam:
http://www.fbi.gov/news/stories/2012/april/grandparent_040212
National Council on Aging:
http://www.ncoa.org/enhance-economic-security/economic-security-Initiative/savvy-saving-seniors/top-10-scams-targeting.html
Resources for Fraud Against Older Adults:
http://www.fraud.org/learn/older-adult-fraud
Fraud Protection Resources:
http://www.stopfraud.gov/protect-yourself.html
