3 Popular Financial Scams That Target Seniors

Think you or your parents are too sharp to fall for a scam? Not all scams are as easy to suss out as the con artist who gets seniors to wire or send money on the pretext that their child or another relative is in the hospital and needs the money.  

 These days scammers are going as far as sending phony emails that claim to come from the IRS and tell victims that they are due a tax refund or making phone calls claiming to be IRS employees, using fake names and bogus IRS identification badge numbers.  

Not as obvious that it’s a scam anymore, right? One report estimates that older Americans lose $36.5 billion each year to financial scams and abuse.  

Why are There So Many Financial Scams Aimed at Seniors? 

“This population that’s retiring is one of the wealthiest, if not the wealthiest generation, in terms of their retirement savings,” Mike Rothman, president of the North American Securities Administrators Association, told CNBC. “Criminals know this as well. It’s easier to try to exploit a senior citizen with cognitive or other impairments in financial issues, who are alone, than it is to rob a bank. So they are the targets.” 

But even healthy older adults can fall victim. Staying alert, identifying potential scams, and knowing where to report financial exploitation can help stop scammers from claiming more victims. Here’s a look at three popular senior financial scams and how you can protect your aging parent’s retirement savings. 

The IRS Isn’t Calling  

One of the most popular scams right now is IRS scams. Maybe someone sends you an email that claims to come from the IRS. You’re asked to provide your personal and financial information because you’re due a tax refund. But really, the scammer just uses that info to steal your identity.  

Or maybe you get a phone call from someone claiming to be an IRS employee, who is calling about unpaid taxes and threatens you with arrest unless you pay up immediately.  

How to Know It’s a Scam and Not the IRS 

The real IRS never initiates contact via phone call, email, or through social media. The IRS initiates most contacts through regular mail delivered by the United States Postal Service. Plus, generally, the IRS will first mail a bill to any taxpayer who owes taxes, and it would never demand that you pay taxes without the opportunity to question or appeal the amount they say you owe.  

For a comprehensive listing of recent tax scams and consumer alerts, visit Tax Scams/Consumer Alerts. If you get a fake IRS call, hang up immediately, and report it to the Treasury Inspector General for Tax Administration at 1-800-366-4484. 

You Don’t Need to Pay for Your New Medicare Card 

From April 2018 to April 2019, Medicare is mailing out new cards that no longer have the Medicare beneficiary’s Social Security Number on it — which means it’s the perfect time for scammers to strike.  

The Federal Trade Commission is warning against scammers posing as Medicare “agents” or health care providers telling seniors they need to provide their Medicare number in order to receive their new card or that they need to purchase a replacement card. But the caller doesn’t work for Centers for Medicare and Medicaid Services; they’re actually trying to steal your identity. 

The new Medicare cards are free, and everyone with Medicare will be mailed a card between April 2018 and April 2019. The only action you need to take is to ensure Social Security has your current address, as the new cards will be sent to the address in their files. 

If you’ve been solicited by a possible Medicare scammer, report it by calling 1-800-HHS-TIPS (1-800-447-8477), or submit a complaint online to the Office of the Inspector General of the U.S. Department of Health and Human Services. 

Never Pay for Anything by Wiring Money, Putting Money on a Gift Card, or Loading Money onto a Cash Reload Card

Perhaps the most common scam is when someone uses fake telemarketing calls to prey on older people. Maybe the con artist tells you that they have found a large sum of money and is willing to split it if you will make a “good faith” payment by withdrawing funds from your bank account. Or perhaps they appeal to your generosity and pretend to be a charity to try to get to your wallet. 

No matter who the phone call or email is from, one of the quickest ways to spot a scam is by recognizing how you are being asked to send money. The Federal Trade Commission warns consumers that if someone says you can only pay by wiring money, putting money on a gift card, or loading money onto a cash reload card, it is a scam.  

Have You Been the Victim of a Scam? 

If you suspect you’ve been the victim of a scam, don’t be afraid or embarrassed to talk about it with someone you trust. You are not alone, and there are people who can help.  

If you are a caregiver, you are in a unique position to help your senior loved ones identify scams and avoid risky financial behavior. Protect your aging parent’s retirement savings by using credit monitoring services and annual credit reports, offering to help with money management and taxes, and working with your parents to select power of attorney and inventory finances. 

For more information about advance care planning, download our eBook Getting Your Affairs in Order: A Guide to Advance Care Planning and Emergency Preparedness.