Everyone is subject to fraudulent scams and con games. Because older people are frequently targeted, it is important for them to be aware of the frauds and scams that threaten their financial security.
Financial abuse is one of the fastest growing forms of elder abuse and takes many forms. It occurs when someone takes money that should have been spent for the elderly person. Financial abuse sometimes goes unreported because the perpetrator is a family member or “friend.”
Types of Financial Exploitation
- Misuse of credit cards, ATM cards or joint bank accounts;
- Mismanagement of income/assets;
- Cashing checks without authorization;
- Abuse of Durable Power of Attorney;
- Appropriation or theft of benefit or pension checks;
- Transfer of assets under duress;
- Obtaining money or possessions by threat, force, deceit or trickery;
- “Loan checks” sent by Credit Card Company that are stolen and forged by others. Always tear them up if you don’t plan to use them. They are also treated as cash and carry a higher rate of interest than a charged item.
Indicators of Financial Abuse
Friends, family and others should be alert to:
- Abrupt changes in the elderly person’s lifestyle (for example, an unexplained inability to pay her bills);
- Great disparities between the amount of money and assets the elderly person has and her living conditions;
- Sudden withdrawals of large sums of money from accounts;
- New acquaintances who promise to provide care, or who give implausible answers about the elderly person’s financial situation.
- Family or friends who pay extraordinary interest in the older person’s assets or belongings.
Scams and Frauds
Telemarketing scams and mail fraud
- Fast-talking telemarketers and perpetrators of mail fraud often promise gifts if you sign-up right away for products or services.
- Check out all unsolicited offers.
- Do not agree to buy anything or to send in money over the telephone.
- If it sounds too good to be true, it probably is!
Theft of wallet or credit card
- Protect your Social Security, bank and credit card numbers.
- Tear up all receipts with your credit card number before throwing away.
- Don’t bring too much cash or all your credit cards when you go shopping.
- Hold your bag securely under your arm.
“The Pigeon Drop”
The con artist claims to be willing to split found money with a person if he/she will make a “good faith” payment by withdrawing funds from bank account.
“The Fake Accident Ploy”
The con artist gets the elderly person to withdraw money on the pretext that the elder’s child or another relative is in the hospital and needs the money.
Medicare/Medicaid Fraud and Abuse
- Check your Medicare Summary Notice (MSN) to see that all billed services were, in fact, provided.
- Call Medicare contractor’s phone number on the bottom of the notice or contact the State Health Information Assistance Program in your state if you have a question about the services listed on your notice. (Check the Medicare Handbook for phone number listed under State Health Insurance Assistance Program (SHIP) program.)
- Also check MSN to see if the provider is billing for exactly what was provided, not for a more complicated or more expensive service.
Prevention and Intervention:
- Direct Deposit of benefit checks will prevent checks from being stolen from the mailbox.
- Paying by check is always safer because the payment can be traced.
- Never turn cash over to anyone.
Tell a caller or the person at your door that you need time to consider their offer. Say “No” or just hang up.
Web Resources for More Information:
The National Consumer Law Center Consumer Concerns for Older Americans: Helping Elderly Homeowners Victimized by Predatory Mortgage Loans (www.nclc.org/images/pdf/older_consumers/consumer_concerns/cc_elderly_victimized_predatory_mortgage.pdf)
AARP: Guide to avoid predatory mortgage lending (www.aarp.org/money/wise_consumer/financinghomes/a2002-09-16-ConsumerAdvocacyHomeLoans.html)
Legal Counsel for the Elderly: Avoiding Scams, Abuse and Exploitation (www.uaelderlaw.org/scams.html)
National Center on Elder Abuse(www.elderabusecenter.org)