According to Fraud.org, a project of the National Consumers League, 26 percent of scam victims are aged 55 and older. Lonely or unprotected retirees are easy targets for fraudsters, who often prey on retirees’ need for companionship or cash.
“They can be desperate for company, money, or stability, and when people are desperate in any kind of situation they do desperate things,” says Sharane Gott, president of the Better Business Bureau in Acadiana, La.
Here are five scams that target retirees:
1. Lottery and sweepstakes scams. The fake check scam is the most common across all age groups, according to Fraud.org’s Top Scams of 2013 report. For retirees, this scam usually comes in the form of a so-called “lottery win.” A victim is notified that he or she has won the lottery and needs to pay taxes up front. The victim receives a fake check, which he or she deposits into a bank account. Then the victim wires money to the scammer for the supposed tax charges. The fake check bounces, and the victim loses the money that was wired to the scammer—in addition to whatever amount is owed to the bank for the fake check.
“Stating a person is a winner provides a strong incentive. Scammers use fictitious addresses, take the cash, and never provide any winnings because there are no winners,” says Gott.
These scams usually occur over the phone, and scammers may call several times a day to build a relationship and earn a victim’s trust. The National Consumers League notes that nearly one-third of all victims of telemarketing scams are age 60 and older.
2. Phony debt relief services. “A lot of baby boomers are still struggling with debt. They don’t want to pass that to their kids, so they fall for debt relief scams,” says Gott.
Despite having some savings, many retirees have credit card or mortgage debt, according to the AARP. Debt relief scams promise to lower monthly credit card payments with an upfront fee. Once the scammers get the fee, they don’t provide the service. Debt scammers use an emotional appeal by promising a debt-free future to ensnare victims.
“With this one, you have to stick with the rule of thumb: If it sounds too good to be true, it probably is,” says Gott.
3. Traveling worker scams. Scammers use door-to-door tactics to build trust and convince a victim that his or her house needs serious repair. Under pressure, the victim pays up front and the scammer leaves with the money, never intending to provide any services.
According to Gott, retirees may have a hard time not answering the door or phone. He says, “Baby boomers and older adults are typically much more trusting.”
The other reason for targeting this age group is the perception of wealth. “Older adults are thought to have a significant amount of money, which often attracts scammers or even a retiree’s own family members,” says Maggie Flowers, a senior program manager of economic security for the National Council on Aging.
4. Grandparent scams. Receiving a call from a loved one in danger is frightening. By impersonating a grandchild, scammers often get retirees to wire them money. The scammer doesn’t even have to know the grandchild’s name because the victim supplies it. When a victim asks the scammer—who calls sounding very flustered—“Is that you, Bill?” the scammer will respond with a story. “Yes, it’s me, Bill! I’m in jail and I need help, but please don’t tell my parents!”
The grandparent may not talk about the situation if he or she doesn’t want to embarrass the grandchild, leaving family members out of the loop. Gott warns that if anyone tells you to act urgently, that person should be questioned, even if it is a family member. If the situation involves your money and personal information, there’s always time to deliberate.
5. Computer takeovers.
In this scam, a person claiming to be a representative from a reputable company such as Microsoft or Norton calls to say a virus is hacking a victim’s computer and asks for remote access to fix it. If that is granted, the scammer can then easily gain access to sensitive personal information stored on the computer that can be used to commit identity theft. The scammer may also charge a fee for the fraudulent services being provided.
To prevent this scam, ask the representative to send written information and check out the business online or with the Better Business Bureau. “Chances are, if they won’t provide it in writing, it’s a scam,” Flowers says.
Other scams retirees commonly fall for include government benefit scams, in which con artists impersonate a government representative calling with questions about medical or tax information, and online romance scams.
To help prevent a scam, never give out personal information or send money on request. If there’s any cause for suspicion, file a report with the Federal Trade Commission or contact the Internet Crime Complaint Center. If a scammer already has access to your information, change your phone number and credit cards.
“A really quick fix for phone scammers is Caller ID,” Gott says. “That way, you don’t even pick up the phone.”