At first glance, it looked like a local contractor was doing a good deed for the elderly in underserved Chicago communities. Mark Diamond would seek out aging African-American homeowners on Chicago’s West and South sides, and offer them the opportunity to fix up their homes through a free government program.
In reality, however, Diamond was signing them up for reverse mortgages and running off with the cash without doing zilch, according to WGN. Over the summer, a judge found Diamond guilty of scamming some 47 homeowners out of a total of $2.3 million.
Sadly, this home repair scheme is one of many scams targeting seniors across the nation. In a 2010 telephone survey, one fifth of Americans over age 65 reported that they had been subject to some sort of financial fraud or abuse.
Older adults are susceptible to exploitation or abuse for many reasons. For one, they may lose some of their financial savvy, but not their confidence This means they many rush into transactions that might not be in their best interest. What’s more, lower levels of cognitive function and decreased psychological well-being among some older adults make them susceptible to financial victimization.
Fraud also persists because many victims feel ashamed about being taken advantage of. They tend to hide their experiences of victimization from trusted caregivers and even their closest family members. If you or a loved one are targeted by fraud, it’s important not to let shame turn to silence — talking about elder fraud is the only way to reduce the stigma.
To guard against fraud, educate yourself and your loved ones on common scams that repeat themselves over and over. The homeowner/reverse mortgage scam is among the most prevalent, according to the National Council on Aging. Others include:
- Insurance fraud: Regardless of age, it’s easy to be fooled over the phone. Perpetrators may pose as a Medicare representative to get older people to give them their personal information.
- The grandparent scam: This one really tugs at our heartstrings. Someone will call posing as the person’s grandchild, and claim they’re in a bad situation and they need money immediately. The caller will often say they can’t tell their parents out of fear of getting in trouble. What’s a loving grandparent to do? The best course of action is to say no, and contact a family member about the call.
- Investment scams: Bernie Madoff’s pyramid scheme may perhaps be the most well-known of its kind, but there are many smaller investment scams that can drain older adults of their hard-earned retirement savings.
If you care for an older adult, AARP has some great tips for protecting your loved ones, including unlisting their phone number and checking their annual credit reports to ensure they haven’t already been targets of fraud.
The hard truth is that we’re all vulnerable to scams and identity theft, at any age. If you’re looking for new ways to protect yourself, Steve Schmidt of Undo Identity Theft is your man. Check out some of Schmidt’s best practices and suggested resources for taking proactive measures against credit card fraud, medical records violations and more.
1. Monitor all you statements on a regular basis. This includes utility bills, bank accounts, investment and retirement accounts.
2. Take precautions against Medicare fraud. If your Medicare card has your Social Security number on it, make a photocopy and black out the first five digits of your SS#. Also, never give out Medicare information over the phone or in answer to an email.
3. Protect against check washing fraud. If you write checks, make sure that you use a pen with dark pigmented ink. Also, don’t carry your checkbook. Just bring the number of checks you will need at one time, and store your checkbook in a safe place.
4. Don’t put mail in your mail box with the flag up. Instead, use a locked mailbox for incoming and outgoing mail or bring mail to the Post Office.
1. FBI: Fraud Target: Senior Citizens
2. FTC: Senior Identity Theft: A Problem in This Day and Age:
3. US Senate Special Committee on Aging Fraud Hotline or call toll-free at 1-855-303-9470
4. Scam Detector: 100 of the latest fraudulent activities: