Frauds used against seniors 2

There is a lot of information about frauds and scams and how to protect yourself. What I found is that there is not a great deal of information about the frauds and scams that target seniors. So, as I was working on creating a workshop on this topic for seniors, I thought I would add the information to the blog. The more you know about frauds and scams, the less chance you have of becoming a victim.

Financial Fraud is the number two fraud used against seniors, and there are many variations of how this fraud works. The first scam is called a Pyramid Scheme

This fraud works as follows:

The senior is recruited and invests in a scheme, and is initially very successful and the fraudster starts to pressure the senior to recruit new investors who are expected to bring in more investors. Recruiting newcomers is more important than selling products. Investors who get in early take their profits from those who join later until finally there are no new investors and the most recent people to join lose their money.

The second variation on this fraud is called a Ponzi Scheme. This is very similar to the Pyramid Scheme. It works as follows:

The fraudster entices the senior by offering consistently higher returns than one would normally make at the bank or in the stock market. The senior places an investment with the fraudster and is encouraged to invest more and more of their savings. They are also encouraged to tell friends and family about the investment opportunity. What the fraudster is doing is paying returns to early investors from their own money or the money paid by subsequent investors rather than from genuinely earned profit.

The third variation of Financial Fraud used against seniors is called the Cryptocurrency Scams

The fraud works this way:

The senior is notified that they have won a prize, and all they have to do is pay a shipping fee and taxes. They may be told they have to pay a fine due to an error in their Income Tax. The fraudster asks you to send the money using Bitcoin. Once their cash is converted to Bitcoin they cannot get it back.

To protect yourself against Cryptocurrency, do not convert your cash to Bitcoins to give to anyone.

The fourth variation of Financial Fraud used against seniors is called the Inheritance Scheme

The fraud works this way:

The senior is told that someone very rich has died and they are in line to receive a huge inheritance (details vary). All they have to do is provide bank account details . . . and maybe pay a fee for administration or taxes.

To protect yourself against the Inheritance Scheme, if you are asked for personal information or bank information or asked to send money, don’t.

The fifth variation of Financial Fraud used against seniors is called the Cheque Overpayment Scam

Many seniors may have to sell goods to make expenses and the fraudster asks the senior if they would accept a cheque from the “them” in excess of the amount owed. The pitch may be similar to this, “I love the (item) and would like to buy it, however, I am short on cash, but I just received my paycheck from (names a legit company). The fraudster shows the senior the check and says, “I can give you my check and you can give me the difference back to me.” The fraudster asks the senior to go to his/her bank and deposit the check and give the excess funds back to the purchaser. In about six weeks the check is returned for not enough funds or is a rejected as it is flagged as a fraud and the senior is out the item and the money.

To protect yourself when you are selling “stuff”, never let the buyer pay more than the agreed price by cheque and then ask for the balance in cash.

The fifth Financial Fraud used against seniors is a Real Estate Fraud

The fraud works this way:

A fraudster assumes the identity of an individual homeowner and then uses that false identity to:

·       Assume the title on your home

·       Sell the property

·       Obtain a mortgage on your property

·       Obtain a mortgage or other properties in your name

To protect yourself from this fraud, you could take out Title Insurance. In my community, I can buy title insurance for a $500,000 home, for around $300 payable only once with no deductibles and no additional annual fees, check this out in your community as each area is different.

Frauds used against seniors 1

There is a lot of information about frauds and scams and how to protect yourself. What I found is that there is not a great deal of information about the frauds and scams that target seniors. So, as I was working on creating a workshop on this topic for seniors, I thought I would add the information to the blog. The more you know about frauds and scams, the less chance you have of becoming a victim. Over the next few posts, I will highlight the top 10, (in my opinion) frauds against seniors and how to protect yourself from falling victim to the fraud.

There are many reasons why seniors are vulnerable to fraudsters and scam artists. Here are a few:

·       As a group, we are too trusting; too polite as we were raised in a culture that valued these attributes and so we believe in the best of people.

·       Many seniors are isolated and look forward to any type of interaction with others, so when we start to get phone calls and letters, we welcome them. But after a while, we become worn down by calls and letters so we give the callers and letter writers what they want.

·       Many seniors do not have the experience to be aware that they are a victim of a fraud or a scam.

Fraudsters are very, very convincing; cheating people is their profession and they are well-trained. What follows are the frauds and scams used almost exclusively against seniors. 

The number one fraud is a telephone fraud called, The Grandparent Scam. This fraud is a variation of a class of frauds called Telephone and Email Scams.

What happens is a senior receives a telephone call, and the voice is garbled or hard to hear. The caller identifies themselves as a grandchild or a nephew or niece and talks about the bad connection and then says something along the following lines:

 “Hi, this is your favourite grand(son)(daughter) or nephew/niece.  I need you to send me money (for a flight ticket, rent or bail) but please don’t tell mom.  She’ll be so disappointed in me.”

If you receive a phone call with any request to wire or send money it should immediately raise a red flag, so hang up and report the fraud to the police.

There is a variation of this phone scam called the Bogus bank inspector. The senior is asked to withdraw a large amount of cash from your account to use as evidence. The senior is told not to tell the staff why they are withdrawing money. They are asked to meet the “investigator” at a pre-determined destination where the money is handed over for investigation.

Once the money changes hands, the senior is instructed to return home and wait for a phone call confirming that the money has been re-deposited . . . no call ever comes and they never see their cash again.

Seniors can take steps to protect themselves from this fraud.  My rule is simple, if you have caller ID and do not recognize the number, let it go to voicemail. If you make a mistake and answer the phone, politely say, “I am not interested!” and hang up.

Never give personal information over the phone. Take the time to register on a “Do not call” list.

What do you do at school?

The twins have started pre-school and have been going for a while. We were visiting and so I asked full of curiosity, "What do you do at school?" My follow-up was going to be "How do you like it so far?".

The twins are two rambunctious little boys who love to tear around and they never seem to sit down. However, I was surprised by their answer, which was, " We sit." Their mom reacted very quickly and showed us all of the stuff they were doing. And she talked about how they really like school. The boys did say they liked what they were doing, and they enjoyed playing with their new friends.

I found it interesting that when asked about school, they both responded with the same idea. "We sit." Part of the reason for young children to attend pre-school is to help them socialize and learn skills that they will need in Kindergarten, through to grade 12. One of the first rules is that you cannot run around as much as you want to, you have to sit.

They have learned the first lesson, I wonder if the teachers realize that is what the twins understand about school. School is important and we there is evidence that pre-school is important for the preparation of students when entering grade 1. Socialization is important because in pre-school and kindergarten we learn the rules of life and how to get along with people outside of our immediate family. We also begin to expand our worldview as we see others behaving in ways we may not have been aware. 

A few years ago there was a book called “All I Really Need To Know I Learned In Kindergarten by Robert Fulghum. Here is an excerpt from the book, All I Really Need To Know I Learned in Kindergarten

ALL I REALLY NEED TO KNOW about how to live and what to do and how to be I learned in kindergarten. Wisdom was not at the top of the graduate-school mountain, but there in the sandpile

at Sunday School. These are the things I learned:

·       Share everything.

·       Play fair.

·       Don't hit people.

·       Put things back where you found them.

·       Clean up your own mess.

·       Don't take things that aren't yours.

·       Say you're sorry when you hurt somebody.

·       Wash your hands before you eat.

·       Flush.

·       Warm cookies and cold milk are good for you.

·       Live a balanced life - learn some and think some

·       and draw and paint and sing and dance and play

·       and work every day some.

·       Take a nap every afternoon.

·       When you go out into the world, watch out for traffic,

·       hold hands, and stick together.

·       Be aware of wonder.

·       Remember the little seed in the Styrofoam cup:

o  The roots go down and the plant goes up and nobody really knows how or why, but we are all like that.

o  Goldfish and hamsters and white mice and even the little seed in the Styrofoam cup - they all die.

o  So do we.

·       And then remember the Dick-and-Jane books and the first word you learned - the biggest word of all - LOOK. 

·       Everything you need to know is in there somewhere.

·       The Golden Rule and love and basic sanitation.

·       Ecology and politics and equality and sane living.

·       Take any of those items and extrapolate it into sophisticated adult terms and apply it to your family life or your work or your government or

your world and it holds true and clear and firm.

·       Think what a better world it would be if all - the whole world - had cookies and milk about three o'clock every afternoon and then lay down with our blankies for a nap. Or if all governments had a basic policy to always put thing back where they found them and to clean up their own mess.

·       And it is still true, no matter how old you are - when you go out into the world, it is best to hold hands and stick together.

Your future self

Perhaps the best way to plan for retirement is to visualize your future, really think about the details of who you will be, where and why. Being able to imagine now who you will be in the future and what your needs and desires will be at that time is perhaps the most important aspect of planning.

In psychological circles, the idea of being able to imagine yourself in the future is called “self-continuity.” It is a concept that has been around since at least the ancient Greeks and scientists have discovered that you are better off if you can somehow connect to this future self.

It turns out that visualizing your future does a couple of important things with regards to retirement planning. By connecting with your future self:

·       You can create a better retirement plan — one that suits what you will want to be doing.

·       Helps ensure that you do create a plan and that you do the things you need to do now, saving money, keeping healthy and maintaining friends so that you will have a better future.

Research suggests that our brains naturally process our future selves as strangers. And, let’s face it – you are unlikely to save for the retirement expenses or care for the body of a stranger.  It turns out that by visualizing yourself in the future and “getting to know” that person, you are more likely to take steps now to take care of this future version of yourself.

Whether you are 40 and hoping to retire in 30 years or if you are 67 and hoping you have enough resources to fund the rest of your life, you need to connect to that person and you need to believe that your future self is not a stranger.