A caution to all retirees! Be aware of scams that target seniors, known as “Elder Fraud”. There are thousands of scammers trying to defraud seniors of their life savings with no concern about the effects on seniors’ lives and their ability to survive financially.
According to the FBI, seniors are losing more than $3 billion annually due to elder fraud. These criminals perpetrate their fraud by gaining seniors’ trust and will typically communicate directly via computer, phone, and the mail.
Here are some tips to help you avoid becoming the target of elder fraud and what to do if you’ve already been targeted or defrauded
What to Look Out For
Most scams are designed to target seniors with retirement savings, assets or homeowners with good credit. Scammers are successful because seniors tend to be friendly, polite and more trustworthy when speaking to a stranger.
There are many scams used to defraud the elderly. Some are designed to trick the elderly into disclosing personal information such as credit card information, bank account numbers, social security numbers and bank log-in information which the perpetrators can then use to access their accounts and steal their identities. Others involve convincing seniors to give large sums of money. Examples include scammers becoming romantically involved with seniors, impersonating a family member needing money, providing computer “tech” support to gain access to personal information, or posing as lottery officials whereby seniors must provide a social security number or pay an upfront fee to receive their winnings.
The most concerning scam of all according to the National Council on Aging, is elder financial abuse. “Over 90% of all reported elder financial abuse is committed by an older person’s own family members, most often their adult children, followed by grandchildren, nieces, nephews, and others.”
These scams can be devastating to your financial health so knowing what to look out for is imperative. Let’s review a few scams to be aware of.
Social Security Administration Scam
One of the most common and unfortunately most effective scams perpetrated upon the elderly is the Social Security scam. Typically these scams start out with a letter, a phone call or text from someone claiming to work for the Social Security Administration.
Justice.gov reports “Social Security Administration imposters contact prospective victims by telephone and falsely claim that the victim’s Social Security number has been suspended because of suspicious activity, or because it has been involved in a crime. They ask to confirm the victim’s Social Security number, or they may say they need to withdraw money from the victim’s bank and to store it on gift cards or in other unusual ways for “safekeeping.” Victims may be told their accounts will be seized or frozen if they fail to act quickly.”
The scam unfolds as they tell you that you stand to make a great deal of money by having your benefits increased. To receive the increase in benefits, you are asked to provide personal details and information which helps the scammers hijack your identity.
IRS Back Taxes Scam
Another scam that is currently plaguing the elderly involves someone claiming to work for the IRS. Many seniors are receiving phone calls, letters, and electronic communications all claiming to be from the IRS and are being threatened with jail time for back taxes that the seniors do not actually owe. It’s easy to get overwhelmed when there is an authoritative voice on the phone telling you that if you don’t cooperate you will go to jail. These scams pressure and frighten the elderly into making large payments on back taxes that they don’t even owe.
Be aware of those phone calls and letters claiming to be from a relative in need of immediate financial assistance. Most of these scams revolve around a sense of urgency. For example, the scammer tells the grandparent that they are in some sort of financial bind and asks if they can send money using Western Union or MoneyGram to help them out.
Sometimes the scammer can mail a letter from your relative’s actual address and then simply intercept payment by stealing the mail a few days later. If you receive a communication like this claiming that your relative is in immediate need of a large sum of money, speak with the relative in question face-to-face or another family to verify the information. Don’t give any banking or financial account information to the person on the phone.
Robocalls use sophisticated technology to dial phone numbers from anywhere in the world to hide the identity of scammers. You have probably already received a call that claims the warranty on your car is expiring and to extend the warranty a payment “now” is needed to renew it.
Phone calls to be especially wary of are those from an unidentified caller that asks “Can you hear me?” When you respond “yes”, the scammer hangs up. They have just recorded you saying yes. The scammer has now obtained a voice signature they can use to access bank accounts and authorize unwanted charges on items like stolen credit cards.
What Can You Do When You’ve Been Defrauded of Your Life Savings?
If you have already become a victim of a scam that has defrauded you of your retirement savings, your first call should be to your local authorities and the Federal Trade Commission. You will be expected to provide a statement and details of the fraud. Working with the authorities does not guarantee the return of your money, therefore, you may want to consult with an attorney as well.
Your next step involves creating a new financial plan to determine what you need to support yourself in the absence of your lost funds. Don’t panic, you have options and here’s how many seniors have successfully replenished their savings after falling victim to a scam.
An Option to Get Back Your Nest Egg
Before you consider selling family heirlooms or home after having been scammed, you may have an option that you may have never thought about; a life settlement. If you own a life insurance policy, you have may the opportunity to sell your policy for a lump sum cash payment. The sale of a life insurance policy to a licensed buyer is known as a life settlement. And your life insurance policy could be one of the most valuable assets you own. Oftentimes, the proceeds from a life settlement may be enough to get back on your feet financially.
Respected industry leaders like MRE Finance can help you by finding a buyer and guiding you through the process. Once you receive your cash payout, you can use the funds however you choose.
MRE Finance has an online life settlement calculator that can provide a free estimate for qualified policies in a few minutes. If you prefer to speak with a specialist, give us a call at 1-800-521-0770 and we can answer all your questions and walk you through the process.
About MRE Finance LLC
MRE Finance brings over 25 years of experience in the life and viatical settlement industry. Our mission is to educate and provide information to help seniors and those chronically ill, live life with dignity and greater financial stability by assisting them in selling their life insurance policy. MRE Finance believes in being transparent with its clients and, above all respecting their privacy.