The Fate of Social Security

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Financial Scams to Avoid

According to the FBI, seniors are still the top target of scam artists. The main reasons for this is that a senior citizen likely owns their home and has retirement money set aside. Also, the elderly are less likely to report fraud out of fear or embarrassment. Unfortunately, the list of current scams circulating the country is long and covers many different arenas from travel, to health insurance, and even funeral home fraud.

Phishing

Phishing is normally attempted via email or a phone call. The thief attempts to trick its victim into revealing critical information they can use to tap into the victim’s bank accounts or credit cards. In a recent phishing scam internet thieves posed as the IRS and requested personal and financial information. In the past year over 1,500 different versions of this phishing scam have been reported. Here are a few examples of phishing scams targeting American’s seniors.

Economic Stimulus Rebate Scams

In truth, the only way to receive an economic stimulus payment is via your tax return. Yet some criminals are contacting seniors and telling them they are slotted to receive an economic stimulus rebate, but first they will need to give out their bank information. This scam is usually performed over the phone or in an email. The IRS wants all taxpayers to know that they never contact people by phone or email to discuss economic stimulus payments.
Medicare Fraud

Unscrupulous medical equipment manufacturers will offer seniors free medical equipment, but request that they give them their Medicare information first. The manufacturers then use a fake signature to bill Medicare for the “free” merchandise and charge the victim of other items as well.

Product Scams

Senior women are the prime target for product related scams. Thieves call the homes of seniors offering fake products, prizes, free travel, even medications. Scam artists often use pressure tactics to frighten their victims into giving way their credit card information by telling them the offer is too good to ignore and only valid for one day.

Advance Fee Schemes

An advance fee scheme has components of a phishing con with a dangerous twist. Scam artists contact seniors with a fake investment opportunity or lottery winnings supposedly worth significant amounts of money. Next, they pretend to help their victims obtain financing, so they can take advantage of their bogus offer. The con artist then collects a finder’s fee, also known as an advance fee, along with sensitive financial information. Victims are usually pressured to sign a contract agreeing to pay the finder’s fee and in some cases this contract is legally binding. Even without giving away financial information the victim could still be out thousands of dollars for the finder’s fee.

Reverse Mortgage Scams

The FBI and the U.S. Department of Housing and Urban Development are alerting seniors to be especially careful when researching a reverse mortgage. The number of seniors seeking a reverse mortgage has sky-rocketed in recent years and that has not gone unnoticed by career criminals. Phony banks and lenders begin the con by contacting seniors via phone, email, post, and free seminars. They then utilize high-pressure tactics to convince seniors to sign contracts with their false company; handing over all their financial information. The scam artists steal the hard-earned equity in the homes of their victims and use it for their own investments.

Protecting Yourself and Your Investments

There are some simple tips that will help you avoid being a victim of a scam. Remember to respect your instincts and never let anyone pressure you into making a financial commitment without getting a qualified second opinion first.

  • Do not respond to unsolicited advertisements via email, regular mail, or a phone call.
  • Do not sign anything that you do not fully understand.
  • Hang up the phone the moment someone asks for your credit card number, social security number, Medicare number, or other financial information.
  • Seek your own reverse mortgage from a nationally recognized bank or financial institution.
  • Double check any email that asks for financial information even if it appears to be from a legitimate company.
  • Remember if something sounds too good to be true it probably is.
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