Are you retired or planning to retire soon?
Just over the past year, after our Money Matters segment featuring our conversation with brazen IRS phone scammers, we’ve become even more determined to raise awareness regarding criminal activity aimed at people over 50.
But just how common are such scams?
From first-hand accounts relayed to me by clients and friends, to almost daily reports in the media, the amount of money being stolen from pre-retirees, retirees, and the elderly, along with the sophistication of the criminals, continues to surprise even me.
How much money are we talking about?
For the last five years, the most commonly cited estimate of the dollar amount of fraud perpetrated against people over 50 came from a Met Life study first published in June of 2011.The study reported that phone and computer scams aimed at retirees and pre-retirees resulted in annual losses of $2.9 billion.
Obviously, that’s a lot of money. But a more comprehensive report has recently been completed that showed $2.9 billion is just a fraction of the money being taken. True Link, a Bay Area company that creates financial tools for people with disabilities, found that an astonishing $36 billion a year is being snatched by scammers who target people over 50.
The Domino Effect of Scamming
Perhaps the most frightening aspect of the scams seems to be how the criminals find you. One friend of mine has an elderly relative who was initially fleeced out of $20.00 via the US Mail, but who then began receiving more and more letters and phone calls (up to 40 combined each day), so that by the time the family caught wind of the onslaught, over $15,000 had been stolen.
That money is gone forever.
But, according to True Link, that’s precisely how it all begins. A mere $20 donated to a bogus charity may seem fairly painless, but via networking and the sharing of donor lists, once you get on the radar of these criminals, it’s like sharks sensing blood in the water; and you get targeted with increasing sophistication and relentless determination.
How to Protect Yourself from Scams
“Scams targeting Baby Boomers are the crime of the 21st Century.”
–The National Council on Aging (NCOA)
While there’s almost no limit to the types of scams that have been attempted, what follows are 3 approaches that, when it comes to people over 50, the NCOA reports are among the most common.
1) Medicare and Other Health Care Scams
Criminals specifically targeting retirees already have a pretty good idea about who your insurer is (Medicare), so posing as a health representative has proven to be a good way to get people to hand over personal information.
Another popular scam focuses on offering personal health services through a mobile clinic and then overcharging Medicare (or your auxiliary health insurer) 1000s of dollars for services that were never rendered.
A few tips to help protect you from healthcare scams, include:
- Never give your Social Security number to anyone.
- Never give your Medicare card number to anyone (outside of your doctor’s office).
- Don’t accept medical supplies from a door-to-door salesperson.
- Immediately report to your health insurance company anyone who implies that they can get procedures paid for that “are not typically covered” by insurance.
2) Phone Scams
Scams via the telephone are some of the most pervasive because, first, they can be carried out from anywhere in the world, second, their machines can dial thousands of numbers a day, and, third, the perpetrators of phone scams use technology that makes the origin of the calls nearly impossible to trace.
A few pointers to protect you from phone scams, include:
- Refuse to provide any personal information (even your name) over the phone.
- Never agree to a wire transfer.
- Never engage with a caller who says they are from the IRS.
- Never say “Yes” to a robo-call (they can record your “Yes” and use it against you).
3) Computer Scams
Like telephones, computer scams are cheap, fast, and the number of potential targets is virtually limitless. Highly knowledgeable hackers sit around and email people like you all day hoping you’ll either let your guard down and give them the information they seek, or you’ll absently click on a bogus link so they can infect your computer with a virus and steal your personal information.
To protect yourself from computer scams, according to U.S. News, you should:
- Pay for items in person (especially when purchasing via Craigslist).
- Change your passwords every 60 days.
- Use different passwords for each account.
- If an online purchase doesn’t arrive on time, follow up immediately.
- Before wiring money to “bail out” a nephew in Las Vegas, make sure it’s legit.
- Avoid shopping over unprotected Wi-Fi offered in public places like coffee shops.
- Password protect your mobile phone.
There are numerous reasons why retirees and people over 50 are considered easier “marks” for criminals than younger people. While it’s generally true that mature people have more money than younger people, it’s also true that people over the age of 50 weren’t brought up with computers and technology, and, having been raised in a vastly different era, are sometimes more trusting than the youth of today.