THE BLOG
10/02/2013 01:19 pm ET Updated Jan 23, 2014

Seniors: Be on High Alert for Scams

I look forward to the day when we no longer need to warn senior citizens about scams designed to separate them from their hard-earned money. I'm not holding my breath, however.

According to the FBI, senior citizens make attractive targets for con artists for a variety of reasons:
  • They're more likely to have a nest egg, own their home and have good credit.
  • Seniors are less likely to report fraud because they don't know where to report it, don't realize they've been scammed, or are too ashamed at having been duped -- possibly fearing they won't be trusted to manage their own finances going forward.
  • When elderly victims do report crimes, they often make poor witnesses because of faulty memory; plus, it sometimes takes months to realize they've been victimized.
  • Seniors are more susceptible to products promising increased wealth, cognitive function, virility, physical conditioning, anti-cancer properties and so on.

Here's a roundup of common types of scams targeting seniors and how you can avoid them:

Telemarketing schemes. Be wary, even if callers appear legitimate. Caller ID "spoofers" pretending to represent your bank, credit card company or government agencies may try to trick you into revealing personal information under the pretext of fixing a security breach. When in doubt, hang up and contact the organization yourself.

Other common telemarketing scams include:
  • You've supposedly won a free prize but are asked to pay for handling, postage or taxes. By law, you never have to pay for any legitimate prize.
  • Get-rich-quick schemes, like those involving Nigerian princes trying to smuggle funds out of their country using your bank account in exchange for a cut of the amount.
  • The "Grandparent Scam," where someone pretending to be your grandchild calls in a panic, claiming to have been arrested or injured (often abroad) and asking you to wire them money -- and not tell their parents because they're embarrassed.
  • Soliciting funds for fake charities, especially after natural disasters.
  • Companies offering seniors free medical equipment or services. After you provide your Medicare number, they forge a doctor's signature and bill Medicare for unneeded goods or services you never actually receive.
  • Some particularly brazen thieves will even offer to help you recover money you've lost to other scammers (who are often part of the same operation).
Although direct telephone contact is common, scammers also use mailers, email, texts and advertisements to lure potential victims into contacting them for further information. A few tip-offs these offers -- whatever the channel -- might be bogus:
  • The offer sounds too good to be true.
  • High-pressure sales tactics -- they won't take no for an answer and have sensible-sounding answers for your every question or hesitation.
  • You must make a decision "right now" because the offer will expire soon.
  • Claims that you are one of just a few people eligible for the offer -- sometimes millions of similar offers are made, simultaneously by "robo-caller" machines backed up by live operators.
  • Your credit card number is requested for verification. Never provide credit card or other personal information by phone, letter or email unless you made the initial contact.
  • You are urged to provide money quickly and not given time to consider the offer.
  • There is no risk. All investments have some risk, except for U.S. government obligations.
  • They refuse to provide detailed written information.
  • You are asked to trust the telemarketer. Like your mother always said, "Don't trust strangers."

If you suspect fraud, contact your state Attorney General's office or file a complaint with the Federal Trade Commission. Also, see my previous blogs, Don't Get 'Spoofed' by Rogue Callers and How to Stop Annoying Telemarketer Calls, for more tips on spotting fraudulent calls.

Unsolicited advice. Watch out for phony door-to-door "home inspectors" who try to pressure unsuspecting homeowners into accepting unneeded repairs or who "case the joint" for valuables while supposedly inspecting for damage.

Similarly, "storm chasers" frequently descend on neighborhoods damaged during natural disasters. They pretend to represent government assistance workers and try to gain access to your personal identification or account information under the guise of repairing damage. (See my previous blog, Avoiding Post-Disaster Scam Artists.) Show them the door.

Another popular scam involves offers to repair your bad credit rating -- for an up-front fee. Remember: No one can remove accurate, unfavorable information from your credit file, so work with your creditors directly if there's a problem.

Retirement investment scams. Many people approaching retirement are deluged with offers to attend free-lunch financial seminars that promise to significantly boost their retirement savings returns. While some are legitimate, others use high-pressure sales tactics to steer seniors into risky, fee-heavy investments or annuities, or sell them products they don't need or that are impractical for their situation.

Before entrusting your savings with anyone (particularly from an unsolicited offer), do your homework. AARP has a good article on avoiding "free-lunch" scams, with pointers on questions you should ask any investment advisor, as well as red flags to avoid. The Securities and Exchange Commission's For Seniors site is another good resource.

The Federal Trade Commission has a Scam Alert Blog that exposes the latest scams, as well as a site where you can file a complaint if a business doesn't make good on its promises or cheats you out of your money. Another good resource is the National Council on Aging's Top 10 Scams Targeting Seniors.

Please Note: The FTC's website is currently down because of the government shutdown. The links shown above should be operable again once that situation has been rectified.

This article is intended to provide general information and should not be considered legal, tax or financial advice. It's always a good idea to consult a legal, tax or financial advisor for specific information on how certain laws apply to you and about your individual financial situation.