Scam of the day – September 1, 2017 – Texas passes legislation to protect seniors from financial exploitation

Financial exploitation of the elderly is a significant problem in the United States today.  Recognizing this problem in 2016, the North American Securities Administrators Association (NASAA) passed a model act entitled “An Act to Protect Vulnerable Adults From Financial Exploitation” which in varying forms was enacted into law by four states in 2016 and more in 2017 with Texas becoming the latest state to pass such a law.  The Texas version of the law became effective today.

The law requires various financial professionals such as brokers and in some instances, bankers to report suspicions of elder financial exploitation coupled with the authority to temporarily delay disbursements of funds while the suspicions are investigated.  The states passing these laws are taking important steps to protect their elderly citizens from becoming victims of scams, such as mystery shopper scams and phony lottery scams.

TIPS

Seniors have long been a favorite target of scammers both because they have money and are often more trusting of scammers which makes them more vulnerable.  In fact, recent studies have shown there is a part of our brain that controls skepticism that becomes less viable as we age thereby making the elderly more susceptible to scams.

If your state is not one of the states that has passed or is considering this model legislation, I urge you to contact your state legislators to pass this law.

Scam of the day – April 18, 2017 – New study about seniors and susceptibility to scams

A recently released  preliminary study by researchers at Cornell University published in the Journals of Gerontology concluded that naturally occurring changes in the brains of older people makes them vulnerable to financial exploitation.  The changes noted were in a part of the brain that alert us when facing a risky situation as well as another part of the brain that controls the ability to read social cues.  This deterioration of the brain can and is exploited by scammers to swindle older people.

A previous study by the University of Iowa also found changes in another part of the brain during aging that controls belief and doubt that would make older people less skeptical and therefore more likely to be a scam victim.

According to a study by the MetLife Mature Market Institute the cost of financial exploitation of the elderly is approximately 3 billion dollars annually.

TIPS

If you have an elderly family member who may be undergoing a decline in mental acuity, it is important to take specific steps to help prevent them from becoming a victim of financial exploitation.  First, it is important to recognize that many elderly victims of financial exploitation are victimized by their own family members or caregivers.  Keeping personal financial information and account information safe and secure is an important first step to take.  It is also important to regularly monitor the accounts of seniors.  Limits on access to funds such as through debit cards that can be customized to monitor spending, block certain types of transactions and set spending limits can be useful to some people.

Scam of the day – August 8, 2015 – FTC sues Lifewatch

 

Scams involving medical services have been a staple of scam artists since the earliest days of time and seniors are frequently targets of scams so when you put the two together, you have the perfect storm for scams.  Although there are many companies that offer medical alert systems for seniors, there are many scammers that sell these services to unwary seniors.  So how do you tell the sales pitch for a scam medical alert company from the sales pitch for a legitimate medical alert company?  One way to tell is if the sales pitch comes via an illegal prerecorded robocall.  Since robocalls are illegal, obviously a company selling you their services through this type of call has little regard for the law and you should have little regard for that company.  One such company, Lifewatch is presently being sued by both the Federal Trade Commission (FTC) and the Attorney General of Florida who allege that the company violates the law not only through illegal robocalls, but also by alleging that the system is free and already been paid for by a friend or family member when that is untrue.  They also are accused of misrepresenting that their product has been endorsed by AARP, which it has not.  Finally, they are accused of telling prospective customers that they won’t be charged anything (on the product they have already been told has been prepaid) until they activate the device.  The truth, according to the FTC, is that Lifewatch charges people immediately.

TIPS

Since robocalls are illegal, if a product is being pitched to you in a robocall, you can’t trust the company so why should you buy the product?  As for medical alert services, if you are considering buying one, you should first check with your physician and then check out the company with the FTC, the Better Business Bureau, your state attorney general and even by just putting the name of the company into a Google search with the word “scam” and see what come up.

Scam of the day – May 4, 2014 – Precious metals scams

Congressional hearings last week highlighted the problem of scam artists  fraudulently selling gold and other precious metals to people, many of them elderly.  Often these scams start with a telemarketing call to the victim in which he or she is told “inside” information about an upcoming rise in the prices for gold, silver or other precious metals.  The victims are then goaded into buying the metals at an inflated price and then must often pay additional commission and storage fees that result in the victims losing thousands of dollars.  Since 2001, it is estimated that precious metals fraud has cost consumers 300 million dollars.  Although the Commodity Futures Trading Commission and the Federal Trade Commission both have jurisdiction in the advertising and sale of precious metals and have shut down some scammers, their record in protecting consumers from precious metal scams is lacking.

TIPS

No one should ever purchase an investment unless they fully understand the investment and no one should ever make an investment decision based solely on a telemarketing call.  Precious metals can be a part of a legitimate investment portfolio, however, this is a sophisticated investment that should only be done by people who are fully educated and informed not just about the investment itself, but also the brokers and others selling the particular investment.

Scam of the day – April 6, 2013 – Elder financial abuse scams

The problem of financial abuse of seniors was highlighted again recently with the upholding of the conviction in New York of Anthony Marshall for scamming his own mother, socialite and philanthropist Brooke Astor.  Marshall exploited his mother’s failing mental health to steal money from her and also forged her name on a Will leaving her assets to him.  The crime of financial scams perpetrated on elders is one that it is not just committed by outside scammers who exploit the vulnerability of seniors with money, but also by people close to the seniors, such as caretakers, friends and family.

TIPS

It is important for family members to assist older family members with their finances to avoid this type of financial exploitation.  For seniors who are of sound mind and wish to manage their own affairs, the assistance can be merely a matter of “quality control” in which the trusted family member or members monitor bills, payments and investments.  For seniors less able to manage their affairs, the assistance should include control over finances and should also include the involvement of more than one person in order to avoid conflicts of interest or the very type of exploitation which you wish to avoid.

For more information about senior scams and how to prevent them, you should check out my book “A Guide to Elder Planning.”  A link to Amazon is provided elsewhere on this blog.

I also invite you to check out the vast number of scams contained in the archives of scamicide.com which can be accessed directly from the bottom of the blog where it says “older entries.”