Telemarketing Scams Target Seniors

It started innocently enough. A 79-year-old woman in La Mesa, Calif. first answered an ad in a catalog, which invited readers to call a number for a chance at a $100 prize. Next, she started receiving several magazine subscriptions. By that time, the crooks had her name, her phone number and her address. Letters started arriving, telling her she was eligible to win half a million dollars, although the numbers grew to almost two million in unclaimed prizes.

Of course, to receive the money she had to send fees, which constantly increased. Within two and a half weeks, she lost more than $98,000 and then another $27,500 in a second scheme—taking her life savings, her credit line, her car, her jewelry and her peace of mind.

“When I got into it and lost some money, I had to win it back. I couldn’t face my kids and say I had lost all this money. The more I lost, I just got deeper and deeper in it,” she told the UT San Diego.com. “I have ‘sucker’ written in red letters across my forehead. . . . I’m so embarrassed.”

Tips for Detecting Scams New ways to fraudulently part you and your money seem to be springing up every day. The Cincinnati Better Business Bureau (BBB)recently reported that a “Wave of Telemarketing Scams Target Seniors” (Feb. 8, 2013), including pushy telemarketing calls from businesses trying to sell personal emergency alarm systems that guard against a long list of dangers, such as break-ins and medical emergencies. It claims that you can get an alarm system worth several hundred dollars installed for free and you’ll only be charged a monthly fee of about $30. Often these are phishing scams that seek credit card numbers and personal information. The Cincinnati BBB offers tips for detecting scams. Be suspicious if the offer:

  • Tries to create a sense of panic. In this case, the call alarms seniors by describing a situation where they are incapacitated at home and cannot call for help. Also watch out for calls that push for immediate action.
  • Promises something for free . . . that really isn’t. Be wary of “free” offers that ask you to pay a handling fee or other charges.
  • Implies an endorsement from a well-known organization. In this case, the call claims the alarm system is endorsed by the American Heart Association and the “American Diabetic Association,” which is really the American Diabetes Association. Others claim a good Better Business Bureau rating, but this can be checked on BBB.org.
  • Contains errors. Just as scam emails often contain misspellings and grammar errors, fraudulent calls refer to organizations, such as the “Diabetic Association.”
  • Doesn’t have a legitimate mailing address and website

Seniors lose $35 million each year trying to claim fake prizes, according to the Federal Trade Commission (FTC). Scam operators target seniors more than other age groups because they are most likely to have a “nest egg,” to own their home and/or to have excellent credit—all of which make them attractive to con artists. Many who grew up in the 1930s through 1950s were generally raised to be polite and trusting. On top of that trusting nature, older Americans are less likely to report a fraud because they don’t know who to report it to, are too ashamed at having been scammed or don’t know they have been scammed. Even if the elderly victims do report the crime, they often make poor witnesses, because of memory problems, a fact that con artists exploit (“Common Fraud Schemes,” FBI).

 Also, senior citizens are interested in and susceptible to products that promise increased cognitive function, virility, physical conditioning, anti-cancer properties and so forth.

 Ways to Avoid Being Scammed

 To avoid ploys to steal your money through prizes and sweepstakes, here are some tips:

  • Ask to receive the offer in writing. Legitimate sweepstakes companies will give you written information about how a contest works, and reading it carefully and at your leisure will make the offer more comprehensible.
  • Don’t rush a decision. So-called limited time offers should not require an immediate decision. A caller from a legitimate business will not rush you.
  •  Never pay to play. It’s illegal for a company to require you to buy something or pay a fee in order to win or claim a prize.
  • Buying something doesn’t improve your chances of winning. It’s illegal for a company to suggest that your chances will be better if you make a purchase.
  •  Never give personal information to someone on the phone unless you initiated the call and have confidence in the person or agency receiving the call. Legitimate business callers will not ask you for this information over the phone.
  • Don’t give the company money for taxes on your prize. Taxes will be deducted from your winnings or you will pay them directly to the government.
  • Don’t pay shipping costs for claiming any prize. If the caller offers a free gift but you first need to pay a handling charge or pay taxes on the prize, that’s a red flag.
  • Guard your credit card and bank account numbers. No legitimate sweepstakes company will ask for this information. If you win, your social security number may be required for tax reporting purposes, but you shouldn’t provide that information unless you’re absolutely sure that you entered the contest and you know the company operating it.
  • Be on guard for imposters. Some con artists use company names that are identical or very similar to well-known, legitimate sweepstakes operators. Tell them that you’ll get back to them and contact the real companies to ask if there is any connection.
  • Be wary of offers to send you an “advance” on your “winnings.” Some scam operators send you a check for part of your winnings, instructing you to deposit it and then wire payment to them for taxes, bonding or some other phony purpose. After you wire the money, your check bounces because it turned out to be an elaborate fake.
  • Don’t be fooled by official-looking mail. It’s not necessarily legitimate just because the envelope is marked “urgent” and the contents look impressive. One clue that you haven’t really won is if the letter was sent at bulk mail rates. That means that thousands of other people are also “winners.”
  • Be especially cautious about foreign sweepstakes companies. Many fraudulent sweepstakes companies that target U.S. consumers are located in Canada or other countries, which makes it much more difficult for law enforcement agencies to pursue them.

Other Types of Fraud

 In addition to telemarketing scams, many other types of fraud are often directed against seniors, such as Medicare fraud (see “Medicare Fraud —How to Protect Yourself,” Senior Spirit, April 2012), and bank fraud (see “Keeping Your Bank Account Safe From Fraud,” Senior Spirit, May 2011).

 According to the FTC, nearly 25 million Americans are victims of consumer fraud each year. According to newspaper reports, senior scam victims in the U.S. hand over at least $2.6 billion to crooks every year, with as many as one in every five seniors losing money.

 Some of the more recent scams are listed below, courtesy of the Savvy Savings Seniors Scam Toolkit (from the National Council on Aging).

 Charity scams: In one case, professional con artists ask the elderly to help the victims of a recent natural disaster by providing credit card information and other personal financial information, including bank account numbers and Social Security numbers. Most states require charities to register with the state, which reports how they use donations.

 Counterfeit drug scams: Some online “pharmacies” advertise cheaper yet “more effective” medications than a reputable pharmacy provides, but when the drugs arrive, they are often useless imitations.

 Magazine subscription scams: Scam artists offer “free” or “special” deals on particular magazines for “dollars a day,” but these subscriptions last for multiple years.

 Jury duty scam: A caller claiming to be a jury coordinator says an arrest warrant has been made against you because you failed to show up for jury duty. If you protest that you never received a summons for jury duty, the scammer asks for your Social Security number and date of birth so he or she can verify the information and cancel the arrest warrant. The fraud has been reported so far in 11 states, including Oklahoma, Illinois and Colorado.

 Sources:

National Consumers League, www.nclnet.org
National Crime Prevention Council, www.ncpc.org/resources/files/pdf/fraud/senfraud_rev4.pdf
Milestones e-news, www.pcacares.org/Milestones_Main_Web_Details.aspx?story=563P4G22K38
South Carolina Lieutenant Governor’s Office on Aging,http://aging.sc.gov/legal/Pages/SeniorFraud.aspx
Scambusters, www.scambusters.org/senior_scam.html