Wednesday, March 4, 2015

Senior Scams Continue

Scammer Bernie Madoff
They've been issuing scam warnings on the radio, and again seniors have been targeted. I've been reading about retirees being victimized by nefarious plots to part them from their money for as long as I can remember. My state has even passed laws that up the penalties against criminals who assault, abuse, or cheat seniors. But still the scams continue. The National Council on Aging (NCA) says these scams are so prevalent they are considered "the Crime of the 21st Century," and provides a list of the 10 most common senior scams.

The FBI provides even more comprehensive information about how seniors are being defrauded these days. But this is just a sampling. There are many other, sometimes fiendishly clever, ways criminals try to part grandpa from his money. And sadly, all too often the scammers are even our relatives or neighbors.

You think you've heard it all, but I once attended an FBI seminar about financial abuse and scams, and I found out I hadn't. It was fascinating! For one thing, I had no idea so many Americans had actually fallen for those all-caps Nigerian e-mail pleas to help relatives of the heads of small African nations get large amounts of cash out of their countries, for a promised hefty cut, of course. OK, we all figured that one for a scam and stayed away, didn't we? But the FBI outlined some other recent scams that were breathtakingly clever, and might have fooled me.

The scams that most surprised me involved folks who got involved with overseas businesses. They may have been "hired" for a job or made a purchase. Now the really perverse thing is that this scam actually relies on the honesty of the target, who is sent a large check by the scammer, far larger than warranted by their supposed business arrangement. The honest target contacts the scammer to report the overpayment. The scammer apologizes and tells the target to just cash the check and then send them a personal check for the difference. No problem. Of course the honest target does so right away, only to discover a few weeks later that the scammer's big check bounced. But the check sent to the scammer, often pretty large, has already been cashed, and as a result, the target has been hit by the bank with an overdraft and a bunch of fees. This can be a hugely expensive lesson to learn. Don't assume that just because your bank accepts the scammer's check and doesn't report back immediately that it has bounced, that it is valid. Overseas checks, especially, can take a very long time to clear, but meanwhile your bank may give you access to the deposit, leaving you vulnerable down the line to overdraft and all kinds of penalties. Yikes!

I guess seniors, especially, are seen as easy targets and worth exploiting. We were raised in a kinder, politer, more trusting era, one pretty much free of identity theft. Too, some seniors are lonely and get in trouble when they are pulled into friendly conversation with callers on the phone, or with the amiable guy who shows up at the door offering to do a minor repair for a song. And we're not always up on how things work these days, and end up giving official-sounding callers our social security numbers, birth dates, and even bank account and credit card numbers. Because we're likely to have money in the bank and to own our homes, we're seen as easy marks.

In my area, two different types of scams have been occurring recently. In the first, someone comes to your home and knocks on the door and identifies himself as being from a utility or home repair company. He scares you by telling you about some manner of threat to your property, and asks you to come outside so he can show you. Alarmed, you go outside with him, leaving your door open or unlocked. Meanwhile, his partner, whom you may not have even seen, enters your home and quickly goes through taking anything of value that he can find and carry away quickly... wallets, money, credit cards, small electronics, silver, jewelry. Victims typically don't realize they've been robbed until after the "helpful" scammers are long gone.  This is called a "distraction burglary" and although it's a very old technique, apparently it still works very well.

The other type of scam actually resulted in a local cab driver receiving an award for thwarting it. This driver picked up an elderly gentleman, who asked the driver to take him to a bank and wait. The old guy entered the bank, withdrew a large sum of money, returned to the cab, and asked to be taken to another location. The cab driver became suspicious and began questioning his passenger. Turns out the old fellow had received a phone call from someone who claimed to be an IRS agent and threatened dire consequences if a supposed tax debt was not immediately paid off in cash. The "agent" instructed him to bring the money to him at a certain public location in order to avoid more drastic enforcement action. The cab driver, realizing immediately that his passenger was being scammed, instead took him to the nearest police station and helped him file a report.

It's definitely neither frugal nor conducive to a happy retirement to have your bank account cleaned out or your stuff stolen! I've made it a practice to not allow workmen or others into my home if I don't know for sure who they are. I keep my doors locked and if someone comes to my door, I don't invite them in. I keep in mind that "official" utility or other ID is easily faked. I assume the guy at my door is likely an imposter. I don't talk to phone solicitors at all, nor to people who come to my door, unsolicited, to offer their services. And when I do need to have workmen in the house, I make sure I've not left anything of value lying around. Besides my purse, I keep checks hidden and make sure my computer is off and the card file I use to store passwords is tucked away on a back shelf far from the computer. People can do a lot of mischief with stolen checks, or your bank or credit card information and passwords!

Still, no matter how careful you are, there are always very clever criminals out there plotting creative new ways to part seniors from their money. A relative of mine lost a seven-figure amount, his retirement nest egg, because his investment fund adviser, who got him such good returns over the years, turned out to actually be running a Ponzi scheme. We all heard about Bernie Madoff, but there are plenty more of these scammers operating all over the country, and when they eventually get caught, you lose all or most of your money.

So to preserve your resources in the face of all this fraud, I guess you just have to be very conservative and more than a little suspicious. Sadly, the financial industry has become one of the biggest collections of criminal enterprise in our nation, and it doesn't look like there is political will to stop them. It's not just the Bernie Madoffs, either. Fall behind on a mortgage or credit card payments, and you'll be the target of your bank or credit card company's voracious grab for what's yours, in the form of huge punitive fees, underhanded accounting, and deceptive foreclosure tactics.

We've just got to be very, very careful out there.

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