You are here: Features Remar's Report Are You Alert for New Financial Scams Targeting Older Americans?

Are You Alert for New Financial Scams Targeting Older Americans?

Knowing These Basics Can Help Protect Your Family

March 2014

Do you know who are now the favorite target of financial scams? Older adults in the U.S. In 2012, people 60 and older made up 26% of all fraud complaints tracked by the Federal Trade Commission (FTC), the highest of any age group. That figure’s up from 10% in 2008, when it was the lowest of any adult age group. Also note that these statistics represent only the reported cases. The FTC estimates that no more than 10% of these scams are reported. Because about 10,000 boomers turn 65 each day, the popularity of these scams will only grow. Here’s how to spot the most recent scams and how to protect yourself and your family.

Popular Scams

Although the basic types of financial scams have been around many years, here are some popular new twists that have been reaping new victims.

Medicare and Health Insurance Scams

The implementation of the Affordable Care Act has spawned many new Medicare and health insurance scams.

  • One scam offers to help you get insurance through the Health Insurance Marketplace for a fee. The facts: There is no fee for eligible Americans to sign up for insurance on the Marketplace. Any communication offering to help you for a fee is a scam. Hang up on a phone call; don’t reply to an email. If you need help, the official website at provides direct help via online chat and phone and links to official trained counselors who aren’t allowed to charge a fee.
  • Another indicates that you need a new Medicare card and you’ll lose your coverage if you don’t pay them a fee or give them your Social Security number, credit card number, or bank account number. The facts: No such card is required—this is always a scam. For more information go to Suspect a Health Care Scam? from the FTC.

Types of Financial Scams Targeting Older Americans

  • Medicare and Health Insurance scams
  • Financial Investment fraud
  • Pension Advance loans
  • Funeral Notifications
  • Lottery and Sweepstakes scams
  • Charity scams

Financial Investment Fraud

Many seniors are concerned about their income and retirement savings running out as they grow older. The fact that most savings and checking accounts and even CDs or money market funds are paying relatively low interest rates worries many seniors and increases their vulnerability to financial scams. These scams can include investment in foreign currencies, phony investments, Ponzi schemes, fraudulent stock tips, and work-at-home schemes. For those that own a home, reverse mortgages can be a tempting target for scammers. Use the information on the Avoiding Retirement Fraud webpages to learn how to recognize such scams and protect yourself. They are provided by the U.S. Securities and Exchange Commission on

Pension Advance Loans

A pension advance loan firm offers “lump sum advances” on their pension payments to retirees. Most of these are not scams but risky financial products with high interest rates. These firms have been targeting veterans, teachers, firefighters, and police officers.

Funeral Notifications

These scams come by email with the subject “funeral notification.” It appears to be from a legitimate funeral home, includes condolences, and a link to more information about the upcoming funeral service. The link doesn’t provide more information, it downloads malware onto your computer. If you should receive one, delete it. Contact the funeral home or family directly.

Lottery and Sweepstakes Scams

These scams come by phone, letter, and email. The typical come-on is you’ve won but you must pay the fees upfront in order to collect. In the latest twist, the scammers escalate the pressure by repeatedly contacting the victim asking for more money. They may even pose as IRS or other government officials.

Charity Scams

Charity scams take advantage of our willingness to help disadvantaged groups or victims of disasters. The “cause” may be a widely publicized national or international event or it may be a “local” event such as a child or family hurt by a house fire, auto crash or illness. Scammers will use names that sound or look like legitimate charities. They may set up a website dedicated to helping the “local” cause (but the money goes into their pockets not to the victims). The new twist: Recent charity scams have used email that seem to come from legitimate charities but which contain malware. The malware is designed to steal personal and financial information. What to do: Never click on any link in any email or suspect website. Always checkout charities before giving to them: Use the resources in the section below on “How to Protect Yourself.”

How the Scammers Succeed

How do the scam artists succeed in tricking so many people, particularly older adults? Their greatest tool is that they project themselves as friendly, sincere helpful people. They do it verbally in a phone call and carefully worded emails to get people to respond, particularly to call a phone number. At first, the scammers seem to take an interest in the victim and are willing to talk and listen—a ploy that appeals to adults who may be sociable, trusting or a bit lonely. After the victim takes the “bait” and signs up for the fraud (whatever it is), the scammers typically use intimidation and threat to keep victims on the hook. Educating yourself or family members about how to see through these ploys is your best defense. The tips and information following can help.

How to Protect Yourself

Here are some tips that will help you or family members avoid scams.

Take your time before making any commitments or financial decisions. Always check out the offer including the person and business involved. Ask for written documentation. If the offer is for a product or service, check out products and services offered by other businesses that you know are legitimate.

Don’t put financial and personal information in an email. Email is not a secure form of communication. Your financial institutions won’t ask for this type of information in an email.

Don’t give out financial and personal information over the phone unless you initiated the call. If someone calls and wants this information, call them back using a phone number that you have obtained from a reliable, verified source.

Be careful what you post on social media. Scammers may pick up personal information from Facebook or other social media sites and use that information to make their pitches more believable.

Don’t Respond When You Recognize These Red Flags in any offer or solicitation:

  • Requires you to act quickly. Watch out for phrases such as “act now” or “before it’s too late”.
  • Requires you to send money by wire transfer or pre-paid card. Additional red flags are if it must be sent to a third-party and/or to another country.
  • Requires you to pay money upfront. Don’t be taken by requests for fees, taxes, shipping or other “charges.”
  • Requires your bank account number, credit card number, Social Security number, or other financial or personal information. Or they may request that you confirm your information.

For More Information

Remar’s Report: Older? Are You Alert for These Common Financial Scams?

Financial protection for older Americans from the Consumer Financial Protection Bureau includes the resources guide Money Smart for Older Adults [PDF]

22 Tips for Avoiding Scams & Swindles from the National Council on Aging

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