It’s sad, but true: Seniors are often targets of financial fraud, and it is costing them big.
According to the Certified Financial Planner Board of Standards, the average senior victim of fraud loses about $140,500. That’s a fairly significant amount of money, especially considering that many seniors are living on a fixed income.
If you have older relatives, it’s important to be on the look out for financial abuses and outright fraud.
Here are some of the senior fraud and scams to be on the watch for:
Social Security and Medicare Scams
One of the ways that many seniors are scammed is through fraudsters claiming to be associated with Social Security and Medicare.
Seniors are very interested in their Medicare benefits and Social Security checks. Playing on fears, scammers sometimes contact seniors, telling them that a check has been held up, and asking for personal financial information.
Another tack is to insist that seniors have more benefits coming, as long as they fill out paperwork that asks for personal financial information.
Watch out for these types of scams, and warn elderly relatives. Before providing any information, seniors should go through official channels independently.
However, there is fine print with the check. If the check is cashed, or deposited, it results in an agreement for a monthly “subscription” of some sort. Many seniors unwittingly give schemers a chance to withdraw a set amount of money from the account each month. This can become quite problematic down the road.
Investment Ponzi Schemes
Another issue is the Ponzi scheme.
Many seniors get caught up in the promise of investments that can turn their nest egg into something really substantial. Seniors are encouraged to cash out their retirement accounts in order to invest in something that offers high returns.
Often, seniors are reeled in by “free lunch” seminars that promise a good meal. While eating, seniors are pitched the investment scheme.
Other schemers find seniors at church, or at community centers.
It’s important to be on the watch for these types of scams, and remember that if it seems too good to be true, it probably is.
While some financial advisors and investment advisors might not be doing something that is a true scam, they might not be looking out for seniors’ best interests.
In order to get better commissions, some advisors might push seniors toward products that aren’t best suited to their needs. The advisor makes plenty of money, but the senior doesn’t see the same sort of returns.
Be on the look out for these types of financial advisors. Find out what kinds of commission an advisor receives, as well as how commissions are earned. Be wary of those who earn commissions when they recommend certain products and services.
Seniors and those close to them need to be on the watch for these types of schemes. Some are quite convincing, but it’s better to be skeptical. You never know when someone is actually out for your cash.