Scamming the Elderly – Protecting Yourself Against Fraud
Americans got 26.3 billion automated calls in 2018, an increase of more than 45% over 2017. The prevalence of scams and fraud has grown as the internet allows people more access to the lives of others, and some groups of Americans are hurt more than others. One of the most susceptible groups is people over 55.
Here are some of the most common scams targeting older generations, as well as ways to protect yourself against them.
Healthcare and Medicare are extremely helpful tools to protect against large medical expenses, but they can also be an enormous liability if they turn out to be fraudulent. On April 9, 24 people were charged and arrested in a $1.2 billion health care scam that spanned several continents. This fraud involved companies that made medical products like braces and splints, who paid off doctors to prescribe products that were not medically necessary.
Legitimate Health and Medicare systems can also be manipulated and misused. If someone gets a hold of your Medicare card, they can use it to steal your identity and commit Medicare fraud. This is extremely costly both to you and the provider.
What you can do:
1. Guard your Medicare and Healthcare cards like they are credit cards. With them, people can steal your identity.
2. Carefully monitor all costs, benefits, and stipulations of your healthcare plans. This will help you spot any red flags that could prove the system is fraudulent.
3. Get a second opinion. If at any point you believe a doctor, healthcare provider, or other professional is attempting to mislead you, seek the guidance of a third party.
This is by far the most common type of fraud committed globally. The caller will pretend to be calling for something in need of immediate attention, and will often say that the matter must be handled over the phone call. Around April 15, I received a fraudulent phone call from someone impersonating an agent of the IRS. They claimed that I had committed tax fraud and that police were being deployed to my home. To “keep from being arrested” I was asked to pay the outstanding tax liability of $1,000 by credit card over the phone. It’s typical for phone scammers to make you believe you are in legal danger in order to solicit an immediate response.
What you can do:
1. In the specific IRS example, remember that a government official will always be able to identify you by name, birth date, and often even social security number. If they can not provide any of this information, the call is almost definitely a scam.
2. Delay the transaction. Scammers usually require a transaction to be made during the phone call, but this is rarely how it works in legitimate business. Say something like “Now is not a good time” and request a callback number. If they fail to provide one and are unable to justify the rush, they are most likely trying to scam you.
The “Grandparent” Scam:
This is perhaps the most sadistic scam around. To execute this fraud, a scammer (imitating a grandchild) calls a grandparent and says “Hi grandpa! Can you guess who this is?” When the grandpa guesses, the fraudster has created an identity without any prior knowledge. The scammer then asks the grandparent for money for an emergency expense, such as being short on rent or unexpected car trouble. They then beg the grandparent to not tell their parents (“they’ll be so mad at me!”), thereby swearing them to secrecy and covering the fraud.
What you can do:
1. My main recommendation is to store the contact information of your grandchildren as much as possible. If they are calling from a strange number (especially out of state, blocked, or out of country), ask them why they are using that line. Pay close attention to any inconsistencies in the grandchild’s story. This will help you catch a scammer, but if it is your grandchild, it might also help you learn about the truth of their situation. They may be in more trouble than they let on, so this will help no matter what.
2. Ask to call them back. You can hang up and immediately redial, but if the call has been routed, which scammers do but your grandchild would never, you won’t be able to reach them again.
It is always best to exercise caution in all aspects of your financial life, and this becomes doubly important on the internet and over the phone. If you or someone you know has been a victim of fraud, call the Adult Protective Services at (213) 351-5401. You should also contact the police and alert your financial advisor.