Senior financial scams are long-standing issues that have impacted older adults for decades. But the way fraudsters take advantage of the elderly is continually evolving. More sophisticated scams are using new technology to trick elders into handing over their savings, destroying people’s financial security during their most vulnerable years of life.
The New York State Office of Children and Family Services estimates 5 billion American seniors are victims of financial scams every year and experts say the annual losses are $123 Million in New York State alone. Other experts estimate Americans are scammed out of $67.3 Billion each year as new scams continue to exploit our nation’s elders.
Financial scams target a wide variety of older adults and victims are often surprised when they realize they have been exploited. Senior women who live alone and have cognitive defects are the most common target of financial scams, while family members are just as likely to commit financial fraud as strangers or hired hands.
Unfortunately, every elder is at risk as even people without mental impairment are routinely taken advantage of, proving no person is safe from the greed behind financial fraud. Below are the top five senior financial scams to be aware of.
Scam #1 – Medicare and Health Insurance Fraud
Medicare and health insurance fraud is a simple scam in which a person falsely claims an elder received medical services that were not performed. The fraudster then collects reimbursement payments and pockets the money. Medicare fraud can limit a person’s ability to access medical services when they are genuinely needed and is a burden to taxpayers.
Medicare is a popular target for health insurance scams, as every American over the age of 65 is qualified. The person who commits the fraud only needs to collect a few personal details and then they’re able to submit the claims without the victim ever knowing.
Medicare fraud can be committed by family members, caretakers or even nursing home administrative staff. In some cases, health insurance fraud is executed as a phone scam, where fraudsters pose as government officials to gather the necessary details.
Scam #2 – Investment Scams
Investment scams can quickly destroy a person’s financial status. With investment scams, fraudsters pose as financial advisors to gain the trust of elders, promising to help them manage their financial assets to gain access to their funds. Once the fraudster is in control of an elder’s money, they either drain the account or invest in complex portfolios that benefit the advisor and not the elder.
Third parties traditionally committed investment scams, but they can also be executed by family members. In many cases, older adults trust younger family members to invest their money using new technologies and strategies they aren’t personally confident with.
Scam #3 – Funeral Home Scams
Seniors are also vulnerable to funeral home scams, in which scammers take advantage of grieving widows or widowers. These scammers often use obituaries to find new victims and learn about their families and then exploit them for financial gain.
One common funeral scam occurs when the scammer finds the living spouse and urges them to pay an outstanding debt. Another funeral scam is perpetuated by funeral home staff who knowingly sell services that are unnecessary or fictional. Because of the victim’s distress over losing a loved one, they often pay the requested amount without much thought.
Scam #4 – Marketing Scams
Marketing scams take numerous forms and may be executed by phone, email, mail or door-to-door sales. With marketing scams, fraudsters trick elders into purchasing a product or service that doesn’t exist, or will never live up to its claims.
By the time a person realizes that their purchase falls short of their expectations, the initial fraudster has disappeared and is impossible to track down.
Scam #5 – Fake Prescription Drugs Scam
Prescription drugs can be expensive, and many seniors are turning to the internet to source their prescriptions at lower prices. Unfortunately, scammers are aware of this behavior and have created fake e-commerce websites that pretend to sell prescription drugs.
Elders who purchase a prescription on one of these fakes sites will lose their money, share their credit card information with scammers and fail to receive the medication they require. Therefore, prescription drug scams can have extraordinary financial and health impacts.
Protecting Elders Against Senior Financial Scams
Elders who are appropriately taken care of and have a network of loved ones involved in their care are significantly less likely to be victims of financial fraud. Therefore, preventing isolation is an important safety measure for older adults.
Seniors and their loved ones also need to be educated on financial scams so they can spot these nefarious schemes. While it’s impossible to know about every scam, many follow similar patterns or models that make them somewhat easier for educated elders to detect.
Likewise, family members and caretakers aware of common scams and warning signs can actively protect their loved ones from this form of abuse. If you think you or a loved one may be the victim of senior financial scams on the part of nursing home staff or caretakers, contact the Nursing Home Abuse Center today for a free case review.