Older Americans are targeted for fraud because they
are the mostly likely demographic to have money in savings, own their home, and
have excellent credit… all of which a fraudster will attempt to take advantage
of. Also, seniors are less likely to report fraud.
Common Scams Targeting Seniors
Financial scams targeting seniors have become so prevalent
that they’re now considered “the crime of the 21st century.” Why? Because
seniors are thought to have a significant amount of money sitting in their
Financial scams also often go unreported or can be difficult
to prosecute, so they’re considered a “low-risk” crime. However, they're
devastating to many older adults and can leave them in a very vulnerable
position with little time to recoup their losses.
It’s not just wealthy seniors who are targeted. Low-income
older adults are also at risk of financial abuse.
And it's not always strangers who perpetrate these crimes.
Over 90% of all reported elder fraud is committed by an older person’s own
family members, most often their adult children, followed by grandchildren,
nieces and nephews, and others.
Review our list below, so you can identify a potential scam.
#1. Health Care/Medicare/Health
Every U.S. citizen or permanent resident over age 65
qualifies for Medicare, so there is rarely any need for a scam artist to
research what private health insurance company older people have in order to
scam them out of some money.
In these types of scams, perpetrators may pose as a Medicare
representative to get older people to give them their personal information, or
they will provide bogus services for elderly people at makeshift mobile
clinics, then use the personal information they provide to bill Medicare and
pocket the money.
Keep in mind:
Do not allow people into your home uninvited.
Do not give personal information to salespeople that have
initiated the interaction. Always keep all personal information, such as your
Medicare number confidential, just as you would a credit card or a bank account
Whenever you have a question or concern about any activity
regarding Medicare, call 1-800-MEDICAR.
#2. Counterfeit Prescription Drugs
Most commonly, counterfeit drug scams operate on the
Internet, where seniors increasingly go to find better prices on specialized
This scam is growing in popularity—since 2000, the FDA has
investigated an average of 20 such cases per year, up from five a year in the
The danger is that besides paying money for something that
will not help a person’s medical condition, victims may purchase unsafe
substances that can inflict even more harm. This scam can be as hard on the
body as it is on the wallet.
#3. Funeral & Cemetery Scams
The FBI warns about two types of funeral and cemetery fraud
perpetrated on seniors.
In one approach, scammers read obituaries and call or attend
the funeral service of a complete stranger to take advantage of the grieving
widow or widower. Claiming the deceased had an outstanding debt with them,
scammers will try to extort money from relatives to settle the fake debts.
Another tactic of disreputable funeral homes is to
capitalize on family members’ unfamiliarity with the considerable cost of
funeral services to add unnecessary charges to the bill.
In one common scam of this type, funeral directors will
insist that a casket, usually one of the most expensive parts of funeral
services, is necessary even when performing a direct cremation, which can be
accomplished with a cardboard casket rather than an expensive display or burial
#4. Fraudulent Anti-Aging Products
In a society bombarded with images of the young and
beautiful, it’s not surprising that some older people feel the need to conceal
their age in order to participate more fully in social circles and the
workplace. After all, 60 is the new 40, right?
It is in this spirit that many older Americans seek out new
treatments and medications to maintain a youthful appearance, putting them at
risk of scammers.
Whether it’s fake Botox like the one in Arizona that netted
its distributors (who were convicted and jailed in 2006) $1.5 million in barely
a year, or completely bogus homeopathic remedies that do absolutely nothing,
there is money in the anti-aging business.
Botox scams are particularly unsettling, as renegade labs
creating versions of the real thing may still be working with the root
ingredient, botulism neurotoxin, which is one of the most toxic substances
known to science. A bad batch can have health consequences far beyond wrinkles
or drooping neck muscles.
Perhaps the most common scheme is when scammers use fake
telemarketing calls to prey on older people, who as a group make twice as many
purchases over the phone than the national average.
While the image of the lonely senior citizen with nobody to
talk to may have something to do with this, it is far more likely that older
people are more familiar with shopping over the phone, and therefore might not
be fully aware of the risk.
With no face-to-face interaction, and no paper trail, these
scams are incredibly hard to trace. Also, once a successful deal has been made,
the buyer’s name is then shared with similar schemers looking for easy targets,
sometimes defrauding the same person repeatedly.
Examples of telemarketing fraud include:
The Pigeon Drop
The con artist tells the individual that he/she has found a
large sum of money and is willing to split it if the person will make a “good
faith” payment by withdrawing funds from his/her bank account. Often, a second
con artist is involved, posing as a lawyer, banker, or some other trustworthy stranger.
The Fake Accident
The con artist gets the victim to wire or send money on the
pretext that the person’s child or another relative is in the hospital and
needs the money.
Money is solicited for fake charities. This often occurs
after natural disasters.
#6. Internet Fraud
While using the Internet is a great skill at any age, the
slower speed of adoption among some older people makes them easier targets for
automated Internet scams that are ubiquitous on the web and email programs.
Pop-up browser windows simulating virus-scanning software
will fool victims into either downloading a fake anti-virus program (at a
substantial cost) or an actual virus that will open up whatever information is
on the user’s computer to scammers.
Their unfamiliarity with the less visible aspects of
browsing the web (firewalls and built-in virus protection, for example) make
seniors especially susceptible to such traps.
One example includes:
A senior receives email messages that appear to be from a
legitimate company or institution, asking them to “update” or “verify” their
personal information. A senior receives emails that appear to be from the IRS
about a tax refund.
#7. Investment Schemes
Because many seniors find themselves planning for retirement
and managing their savings once they finish working, a number of investment
schemes have been targeted at seniors looking to safeguard their cash for their
From pyramid schemes like Bernie Madoff’s (which counted a
number of senior citizens among its victims) to fables of a Nigerian prince
looking for a partner to claim inheritance money to complex financial products
that many economists don’t even understand, investment schemes have long been a
successful way to take advantage of older people.
#8. Homeowner/Reverse Mortgage
Scammers like to take advantage of the fact that many people
above a certain age own their homes, a valuable asset that increases the
potential dollar value of a certain scam.
A particularly elaborate property tax scam in San Diego saw
fraudsters sending personalized letters to different properties apparently on
behalf of the County Assessor’s Office. The letter, made to look official but
displaying only public information, would identify the property’s assessed
value and offer the homeowner, for a fee of course, to arrange for a
reassessment of the property’s value and therefore the tax burden associated
Closely related, the reverse mortgage scam has mushroomed in
recent years. With legitimate reverse mortgages increasing in frequency more
than 1,300% between 1999 and 2008, scammers are taking advantage of this new
As opposed to official refinancing schemes, however,
unsecured reverse mortgages can lead property owners to lose their homes when
the perpetrators offer money or a free house somewhere else in exchange for the
title to the property.
#9. Sweepstakes & Lottery Scams
This simple scam is one that many are familiar with, and it
capitalizes on the notion that “there’s no such thing as a free lunch.”
Here, scammers inform their mark that they have won a
lottery or sweepstakes of some kind and need to make some sort of payment to
unlock the supposed prize. Often, seniors will be sent a check that they can
deposit in their bank account, knowing that while it shows up in their account
immediately, it will take a few days before the (fake) check is rejected.
During that time, the criminals will quickly collect money
for supposed fees or taxes on the prize, which they pocket while the victim has
the “prize money” removed from his or her account as soon as the check bounces.
#10. The Grandparent Scam
The Grandparent Scam is so simple and so devious because it
uses one of older adults’ most reliable assets, their hearts.
Scammers will place a call to an older person and when the
mark picks up, they will say something along the lines of: “Hi Grandma, do you
know who this is?” When the unsuspecting grandparent guesses the name of the
grandchild the scammer most sounds like, the scammer has established a fake
identity without having done a lick of background research.
Once “in,” the fake grandchild will usually ask for money to
solve some unexpected financial problem (overdue rent, payment for car repairs,
etc.), to be paid via Western Union or MoneyGram, which don’t always require
identification to collect.
At the same time, the scam artist will beg the grandparent
“please don’t tell my parents, they would kill me.”
Other scams targeted at Seniors: