Telemarketing Scams against the Elderly: Seniors Ability to Differentiate A Legitimate Investment Versus A Scam



Telemarketing Scams against the Elderly: Seniors Ability to Differentiate A Legitimate Investment Versus A Scam

The Problem of Financial Crimes against the Elderly

It begins by describing the problem and reviewing risk factors. It then identifies a series of questions to help you analyze your local problem. Finally, it reviews responses to the problem and describes the conditions under which they are most effective. Financial crimes against the elderly fall under two general categories: fraud committed by strangers, and financial exploitation by relatives and caregivers. These categories sometimes overlap in terms of target selection and the means used to commit the crime. However, the differences in the offender-victim relationships suggest different methods for analyzing and responding to the problem (Lee 2009).

Fraud Committed by Strangers

Fraud generally involves deliberately deceiving the victim with the promise of goods, services, or other benefits that are nonexistent, unnecessary, never intended to be provided, or grossly misrepresented. There are hundreds of frauds, but offenders generally use a small subset of these against the elderly. The frauds typically occur within a few interactions.

Prizes and sweepstakes. These frauds generally involve informing the victim that he or she could win, or has already won, a "valuable" prize or a lot of money. The victim is required to send in money to cover taxes, shipping, or processing fees. The prize may never be delivered or, if so, is usually costume jewelry or cheap electronic equipment worth less than the money paid to retrieve it.

Investments. Because many seniors live on fixed incomes, they often want to increase the value of their estate and ensure they have sufficient funds to meet basic needs. In investment scams, offenders persuade the elderly to invest in precious gems, real estate, annuities, or stocks and bonds by promising unrealistically high rates of return. The investments often consist of fake gemstones, uninhabitable property, or shares in a nonexistent or unprofitable company (Langenderfer 2001).

Charity contributions. Playing on some seniors' desire to help others, offenders solicit donations to nonexistent charities or religious organizations, often using sweepstakes or raffles to do so.

Home and automobile repairs. Offenders may recommend an array of fraudulent "emergency" home repairs, often requiring an advance deposit. They may subsequently fail to do any work at all, start but not finish the work, or do substandard work that requires correction. Common frauds include roof repairs, driveway resurfacing, waterproofing, and pest control. The offenders are often transient, moving among neighborhoods, cities, and even states. Dishonest auto mechanics may falsely inform customers that certain repairs are needed, or they may bill for services or repairs that were not requested or were not completed.

Loans and mortgages. Seniors may experience cash flow shortages in the face of needed medical care or home repairs. Predatory lenders may provide loans with exorbitant interest rates, hidden fees, and repayment schedules far exceeding the elderly's means, often at the risk of their home, which has been used as collateral (Kohl ...