Most Common Financial Scams and How to Avoid Them

There are at least 5 million cases of financial scams in the United States each year, and the aging population is the most likely to be affected. Here is a list of the top 10 most common senior scams:

 

1. Medicare/ Health Insurance Fraud

The scam: Medicare recipients will be receiving a new Medicare card between April 2018 and April 2019, but scammers will be posing as Medicare agents or health care providers and telling seniors that they need to purchase a replacement card.

What you can do: You can report scammers to 1-800-447-8744, or submit a complaint online to the Office of the Inspector General of the U.S Department of Health and Human Services (https://oig.hhs.gov/)

 

2. Funeral and Cemetery Scams

The scam: Scammers attend funeral services and take advantage of the grieving family members by claiming that the deceased owed them money. Some funeral homes may also scam family members by overcharging them for services.

What you can do: Research funeral homes and average prices for the area you live in. Do not pay before getting additional information or supporting documents.

 

3. Grandparents Scam

The scam: Scammers call seniors and impersonate their grandchildren in order to convince them to send money via Western Union or Moneygram. Seniors may receive a follow-up call by someone impersonating a police officer asking for additional funds.

What you can do: Do not give out personal information over the phone or send money to unknown sources.

 

4. Sweepstakes and Lottery Scams

The scam: Seniors receive a call saying they have won the sweepstakes or lottery, and to claim the winnings they must pay or share personal information. Seniors may also receive a fake check in the mail with deposit instructions, and the scammers collect money for fees and taxes before the check bounces.

What you can do: Never hand over money for a prize you supposedly won.

 

5. Counterfeit Prescription Drugs

The scam: Scammers may offer better prices on specialized medications, which may be fake and can cause harm to individuals who take them.

What you can do: Ask your pharmacist for generic alternatives, skip your insurance and pay for the medicine in cash, ask your doctor for cheaper alternatives, and look at warehouse clubs like Costco, Publix, Sam’s Club, or Walmart.

 

6. Sweetheart Scams

The scam: Scammers target lonely seniors online by pretending to be a love interest. After gaining their trust, they will ask for financial gifts, plane tickets, or other travel opportunities to the United States, and then they will disappear without a trace. Many sweetheart scammers will pretend to be military service members stationed overseas.

What you can do: Be careful of people who tell you a story that may not make sense, or ask for money soon after you correspond with them.

 

7. Telemarketing/ Phone Scams

The scam: Scammers may solicit money for a fake charity, pretend to be with the IRS, pretend to work for your bank (and may have your bank’s caller id), or will say that a family member was in an accident and needs money to be wired.

What you can do: Do not call back an unknown number, know that the IRS will only contact you by mail, never send money to an unknown source, and research the charity before donating.

 

8. Internet Fraud

The scam: Pop-up browsers will offer downloads for virus scanning software.

What you can do: Beware of pop-up browsers, warn your family about the scam, if you are not sure if it is a scam go directly to the business’s website, and buy your virus and malware protection software at a store instead of an a website.

 

9. Homeowner Scams

The scam: Fake personalized letters may be sent to your house on behalf of the County Assessor’s Office offering to assess the value of the home for a fee, or fake contractors may solicit seniors by offering a free service and then finding fake problems that cause seniors to spend thousands of dollars.

What you can do: Contact the County Assessor’s Office and ask if they sent you a notice, and ask for proof of the contractor’s business license and get a second opinion.

 

10. Fake IRS

The scam: Scammers impersonating the IRS in emails or phone calls will inform seniors that they are due a tax refund or have unpaid taxes. Seniors may be threatened to be arrested if they do not pay immediately.

What you can do: While the IRS does use debt-collection agencies to call people who are behind on their taxes, make sure you never send money over the phone. They also cannot threaten to have you arrested for unpaid taxes.

 

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