Financial Scams are Picking Up

Unfortunately, for many of us, this is not a new topic.  Scams and fraud have been around since the beginning of man, but the volume and the complexity of the scams being perpetrated have greatly increased in recent years.  Specifically talking about Financial Scams targeting seniors, they have become so prevalent that they’re now considered “the crime of the 21st century.” Why? Because seniors are thought to have a significant amount of money sitting in their accounts.  Some do and some don’t.

Per the National Council on Aging, “Financial scams often go unreported or can be difficult to prosecute, so they’re considered a “low-risk” crime. However, they’re devastating to many older adults and can leave them in a very vulnerable position with little time to recoup their losses”.  They also state that “over 90% of all reported elder abuse, including financial fraud, is committed by an older person’s own family members, most often their adult children, followed by grandchildren, nieces and nephews”.

According to Federal Trade Commission data, 1.1 million frauds were reported in 2017, with 21% of the fraud victims suffering a financial loss. Fraud losses for all ages totaled $905 million in 2017, with a median loss of $429 per victim. Retirement-age fraud victims tend to lose more money to scams than younger victims. The median fraud loss was $500 for victims in their 60s, $621 for victims in their 70s, and $1,092 for victims 80 and over.

Here are some of the financial scams and fraudulent activities being targeted towards retirees and seniors:

• Medicare Cards.  Medicare recently completed its replacement of all old Medicare cards that had social security numbers on them with a new paper card, sans social security numbers.  Scammers are calling people to ask if they received their new card and to “verify” their personal information, as well as saying they can mail a more durable plastic card for a small fee.  There is no plastic version!

Another variation has scammers calling people telling them they have a small balance on their old card, and if they provide their bank information to the scammer, that balance can be transferred to their bank account.Hang up – Medicare doesn’t make phone calls.

• Social Security.  Scammers will call to let you know that there is a problem with your account or that your benefits are being suspended due to some fraudulent activities with your Social Security number.  They will then give you a “Social Security fraud department” telephone number to call to resolve the issues and get your benefits going again.  DO NOT CALL.  Social Security does not make telephone calls to tell people their benefits are being suspended.
• Utility Bills.  Focusing on the lower to lower-middle income areas, scammers are calling utility customers threatening to cut off electricity, gas, water or telephone services.  Payments are often being made via credit cards, as well as with gift cards and reloadable cash cards.  DON’T PAY.  Utility companies will reach out to delinquent customers via snail-mail to let them know they are behind in their payments.  Beware -scammers are starting to email and snail-mail authentic looking FAKE bills to unsuspecting customers.  To avoid this, it’s best to set up an on-line account and make electronic payments to the utility companies.
• Fake Family Emergencies.  Many grandparents know what their grandkids are doing, but to get a call from a person claiming to be a “lawyer” or a “personal friend” of a niece or nephew can be very disturbing.  Especially when the caller is claiming that their niece or nephew is in trouble and needs money to be wired immediately.  Various versions include the stranded at an airport in a foreign country, or one with an immediate need to post $500 bail for a DUI.   Scammers are getting very convincing since they can use social media to learn names and details of close family members.  The first thing you should do is hang up, call the family member in question or their parents, and find out if the emergency is true.

Bottom Line: Make sure you are aware of possible scams, and if something doesn’t seem right then it probably isn’t.

This blog is created and authored by Chuck Henrich (Content Creator) and is published and provided for informational and entertainment purposes only. The information in the Blog constitutes the Content Creators own opinions and it should not be regarded as a description of services provided by Southwest Michigan Financial, LLC. The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.  It is only intended to provide education about the financial industry.  The views reflected in the commentary are subject to change at any time without notice.

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