According to the FBI, elderly Americans lose over 3 billion dollars per year to fraudsters who employ various scams to take advantage of them. Scams are a form of elder abuse, and scammers often target the elderly because, for various reasons, they are ideal targets. Older adults are usually retired, with sizable savings accounts and good credit. They may also be lonely, craving human interaction and looking for ways to stave off boredom. Older adults who are cognitively impaired may miss “red flags”, making them more susceptible to being taken advantage of financially. Those with memory loss may not be able to remember who they made payments to, if they remember making the payments at all, making discovering and reporting scams more difficult for elderly victims and their families or caregivers. Even if the victim does realize they have been scammed, they may hide it from their family and friends out of embarrassment or fear that their families will think they are incompetent to manage their finances.

Discovering whether you or an elderly loved one has been a victim of a scam is crucial not only to protect the savings they have spent their lives accruing, but it may also be necessary to protect their Medicaid eligibility. In June 2021, a New Jersey Appeals Court handed down a decision upholding denial of Medicaid benefits to a woman with dementia who fell victim to a scam. The victim had recurring transactions of $300 for several months within the five year look-back period, and could not provide Medicaid with documentation on where the payments were going or why the money was being transferred. The company that had received the payments had long since gone out of business, and the woman’s family believed she had been tricked into making the payments to a scammer. Medicaid denied the application due to a lack of evidence that the victim had attempted to determine the nature of the transactions. The Appeals Court upheld the decision.

    Here are 10 of the most common scams that we hear about from our clients and other members of our community

1.    IRS tax / back taxes scam

This scam is an example of what the FBI calls a “government impersonation scam.” The scammer calls the victim, claiming the victim owes the IRS a large tax bill, and demands payment immediately. The scammers ask the victim for payment in a specific form, usually gift cards or a wire transfer. To create a sense of urgency, the scammer will sometimes claim that the victim’s drivers license or social security number will be suspended or even that they will go to jail if they don’t pay right away. Many scammers even alter their caller ID to make it look like the IRS is calling, and may have personal information about the victim such as their address or workplace that lends legitimacy to their claim that they are a government agent.

Information on tax scams from IRS.gov -

IRS employees at TAC offices do not make calls to taxpayers to demand payment of overdue tax bills. The IRS reminds taxpayers it typically initiates most contacts through regular mail delivered by the United States Postal Service.

There are special, limited circumstances in which the IRS will call or come to a home or business, such as when a taxpayer has an overdue tax bill, to secure a delinquent tax return or a delinquent employment tax payment, or to tour a business as part of an audit or during criminal investigations.

Even then, taxpayers will generally first receive several letters (called "notices") from the IRS in the mail.

The IRS will never demand payment by a specific method. There are many payment options available to taxpayers and there's also a process through which taxpayers have the right to question the amount of tax we say they owe.

2.    Deed Scam

It’s a situation many homeowners across the country have found themselves in: an official looking letter arrives in the mail demanding money by a certain date, for a copy of the deed to their house, or to prove or provide evidence that they’re the owner of a property that has recently been transferred to them.

The letter has a very “official” look to it and lists some details of the recent transfer including address, year built, value, date of transfer, property ID numbers, etc.

In reality, the letter is a scam. All the information about transfers of property by deed is available in public records, anyone can easily look it up without being affiliated with any kind of government agency, title company, or county office. There is no reason to pay upwards of $80 for a copy of the Deed to your house or prove ownership of real property when all that information is a matter of public record.

3.    Health Insurance / Medicare Scam

For this con, a scammer calls the victim claiming to be a Medicare representative. They will often alter their caller ID information in a practice called “spoofing” to make it appear that they are actually calling from a Medicare office..

The scammer will usually try to gather personal information from the victim under the guise of needing that information for a new policy, new identification card, or something similar. The scammer will then use all the personal information they gather to steal the victim’s identity, and may even use the victims Medicare ID information to bill Medicare for services on the victim’s behalf and keep all the money for themselves.

4.    EIN Scam

An EIN, or Employee Identification number, is a tax ID number that is required for many probate estates and for administration of a Revocable Living Trust after the death of the Grantor. The EIN is completely free, and it is a simple process to request an EIN number online.

There are many unscrupulous “businesses” out there that charge exorbitant fees (often $200 or more) to get an EIN - these websites have official looking addresses and have optimized Google search results so that they are among the first results of a Google search along the lines of “request EIN”, often before the official IRS.gov website. Beware! All these sites do is take your information, request a free EIN from the IRS, and bill you for their trouble. After you’ve paid them they are impossible to get a hold of and will not refund your money.

5.    Car Warranty Scam

Almost everyone has heard of this one these days, because these calls are increasingly common. The scammer calls and claims that your car's warranty is about to expire, and offers the victim an opportunity to extend that warranty. The scammer then claims to need information from the victim for the new warranty that they then actually use for their own financial gain.

6.    Student Loan Forgiveness Scam

For this one, the scammer will call the victim claiming that they qualify for a student loan forgiveness program, but they need to act fast to take advantage of the program’s benefits before it expires. The scammers may ask for money in the form of “one time fee” or monthly payments, or they may be after your FAFSA login information so that they can apply for more loans on your behalf and keep the money for themselves.

7.    Romance Scam

One of the cruelest scams on this list. For this one, the scammer takes advantage of the loneliness and trust of the victim. The scammer pretends to be interested in dating the victim, usually using a fake name and stolen pictures to create a new identity. The scammer earns the victim’s trust, and then takes advantage of that trust to steal from the victim. It usually starts out with the scammer asking for small amounts of money or gifts that the scammer claims to need for their children or family, then escalates to much larger sums and more frequent payments. Once the victim can no longer afford to make payments or gets suspicious, the scammer will cut off all contact, leaving a trail of heartbreak and financial ruin.

8.    Tech Support Scam

For this scam, the scammer will call or email someone claiming to be tech support from a computer manufacturer, software company, or even the victim’s workplace. The scammer will ask for username and password information, or may ask the victim to download a new program or allow remote access to their computer to “update” their system. Once the victim gives the information, The scammer will use that information to hack into the victim’s computer and steal personal, banking, or other sensitive information.

9.    Lottery Scam

The scammer will call, or send a text /email congratulating the victim on winning a big prize in a lottery, sweepstakes, etc. then ask them to pay a specific amount of money as a tax, customs fee, or some other fee to claim the winnings. Of course, there is no big payday coming but the scammers will string the victim along for as long as they can, and may even ask for more money if the initial payment they ask for is made.

10.    Grandparent Scam

The scammer will call an elderly person , addressing them as “grandma” or “grandpa”, and when the grandparent guesses the names of their grandchildren, the scammer will claim to be one of the grandchildren that the victim names. The scammer then asks the grandparent for money to pay a fine to avoid jail, or even to bail them out of jail. They will take payment information over the phone and steal as much money as they can from the victim before they are discovered.

FBI how to report:

https://www.fbi.gov/scams-and-safety/common-scams-and-crimes/elder-fraud

IRS how to report:

https://www.irs.gov/businesses/small-businesses-self-employed/tax-scams-how-to-report-them