FINANCIAL SCAMS ON THE RISE - MOST TARGETING SENIORS

SCAMS ON THE RISE – MOST TARGETING SENIORS
Taken from MSN.com 01-28-2010
This article was reported by Kathryn A. Walson for Kiplinger's Personal Finance Magazine.

(NOTE: Feel free to look on www.msn.com the link is below – it has several additional articles on scams (may have to copy and paste link below)

http://articles.moneycentral.msn.com/RetirementandWills/InvestForRetirement/guard-your-retirement-from-scammers.aspx?page=1

Table of Contents:

1. Favorite Cons
2. Protect Yourself from Cons
3. Protect Your Senior Parents

Across the country, law enforcement officials are noting an uptick in senior-directed scams. Anxious to replenish their recession-embattled retirement savings, many retirees are falling for the tantalizing promises of smooth-talking predators.

"Seniors are scared that they don't have enough money for medical costs or that their home isn't worth as much as it was," says Jean Mathisen, the director of AARP's Fraud Fighter Call Center in Seattle, one of nine such centers. "People are feeling such desperation that they sometimes suspend common sense."

Many con artists promise large returns on IRA investments. Telemarketers hawk anti-aging products that are never delivered or are worthless.

These shysters are creative. Take what's known as the "grandparent scam." State attorneys general warn that a caller might say, "It's your favorite grandson." The senior might respond with something like "Is this Joe?" Then "Joe" claims he's been in an accident or stranded and persuades the senior to wire money. (Read "Beware fake grandkids calling for cash.")

1. FAVORITE CONS
As much as you may want to bolster your sagging retirement savings, remember the adage "If it's too good to be true, it probably is." Here are some of the con artists' favorite senior-directed scams:
Fabulous offers. A scammer will call or send a letter or e-mail alerting you that you've won a big prize or that you can buy a product, perhaps prescription drugs, at a great price. With sweepstakes schemes, for instance, a scammer will tell a senior that to claim the prize he or she must first pay a fee. However, it's illegal for a company to require someone to pay to claim a prize. You won't get your money back, and you certainly won't see any sweepstakes winnings. "Whatever money you've sent by wire transfer is impossible to recover," says Kristin Alexander, a spokeswoman for the Washington state attorney general's office.

Phony banks. Watch out for callers who claim to be from your bank or credit card company. They'll tell you they've noticed suspicious activity on your credit card and want to check it with you. You'll know the call is not legitimate if the caller asks for your credit card or Social Security number to confirm he's talking to the right person. Beware of e-mails from what purports to be a trusted institution asking for your Social Security number or account numbers. Phony Bank of America and Citibank messages are common. One prevalent scheme is an e-mail promising you a tax refund from the IRS -- except the IRS doesn't e-mail taxpayers. Scammers usually adapt their cons to the changing economic environment. Law enforcers warn of a hoax based on the rise in bank failures. An e-mail will appear to be from a financial institution that has recently taken over a consumer's bank or mortgage and will ask for updated account information. If you have a bigger mortgage than you can afford comfortably, watch out for companies that offer to negotiate a payment plan or loan modification. The fraudster might claim to be affiliated with your lender. You might be told to pay upfront fees. If you're having trouble making your payments, call your lender or find a housing counselor approved by the U.S. Department of Housing and Urban Development.

Investment schemes. If you think you can tell a con artist from a legitimate adviser, consider this finding from a major study: Investment-fraud victims are more financially literate than non-victims. The hook: a promise of high returns with little risk. "When people set up a scam to target seniors, there's always going to be an emphasis on safety," says Michael Byrne, chief counsel with the Pennsylvania Securities Commission. Typical is a case involving the FBI, the Securities and Exchange Commission and securities regulators in several states. Four ringleaders and their 95 sales agents reached nearly 3,000 victims by phone, on the Internet and at sales seminars, according to the U.S. Attorney's Office in Southern California. The salespeople told investors, many of them seniors, that the investment was a secret, invitation-only bank program that was risk-free and would generate monthly returns of as much as 50%. In late 2008 and early 2009, the four men were sentenced to prison for running a Ponzi scheme.

Find a better broker
Seniors are commonly targeted during free luncheon seminars. Seminar leaders aim to recruit new investors and earn commissions. "We've heard about people being talked into putting their savings into products that are fraudulent or into products that are simply wrong for them," says Andres Castillo, who oversees AARP's Free Lunch Monitor program. The program sends volunteers to seminars. Monitors who hear anything questionable, such as promises of low risks, notify AARP, which alerts the North American Securities Administrators Association. To become a monitor, visit AAPR's Web site.

2. PROTECT YOURSELF FROM FRAUD
The first step, says Alabama Securities Commission director Joseph Borg, is to remember, "You can't have high returns and no risk."

The easiest way to guard against fraud is to ignore the pitches.
a. Hang up on telemarketers,
b. reject invitations to free-lunch seminars and
c. toss out mail with promises of large winnings, surefire investments and cheap travel.
d. Politely shut the door on solicitors.
e. Do not give any cold caller or visitor money, whether by wiring money or sending money orders or personal checks.

If you suspect telemarketing fraud, call your state attorney general's office or the National Consumer League's Fraud Center at 202-835-3323. Sign up with the Federal Trade Commission's National Do Not Call Registry at 888-382-1222. Never let someone push you to make an immediate decision. A salesperson might warn you that the deal will disappear if you don't buy immediately. It is not rude to decline such high-pressure offers. Don't give credit card or bank account information or a Social Security number to an unsolicited caller. You should give out such information only if you call your bank or Social Security office yourself. Don't invest your money with friends unless you've checked them out with securities regulators. And watch out for strangers who develop a friendship and then try to persuade you to invest. If you're considering an offer, do research first. Get all the information in writing, and have documents reviewed by a lawyer.

3. PROTECT YOUR PARENTS FROM FRAUD
Adult children and caregivers play an important role in helping older people avoid scams, says John Breyault, the director of the National Consumers League's Fraud Center. "Oftentimes seniors are lonely and looking for someone to talk to, and unfortunately scammers prey on this." Sit down and talk to your elderly parents. Remind them not to give out personal or financial information to a stranger -- no matter how friendly or persistent the caller or visitor is.

Even if someone claims to represent a well-known charity, your loved one should hang up the phone. Consider helping your parent take some precautions. One good option is encouraging him or her to grant power of attorney to you or another trusted family member who will monitor spending.

You could also help your parents set up a fraud alert on credit cards and register with Do Not Call. Also, if you live far from your parents, consider asking a trusted friend or neighbor to check in on them regularly. Look for changes in behavior that could be a red flag. "If they're writing large checks and won't tell you who they're going to, if they talk about a friend they met on the phone, if they're getting incessant calls from telemarketers, these all may be signs that a senior has fallen victim to a scam," Breyault says. "If you see large checks being written or large withdrawals from their checking account, ask who the money is going to.


Sgt. Laura Soulier
Mobile Police Department
Project CARE
2460 Government Street
Mobile, AL 36606
office 251.208.1920
fax 251.208.1928
http://www.mobilepd.org/care.php
Project CARE Mission: To prevent victimization among the senior population in and around Mobile, AL through extensive community education and resources, as well as officer training and victim assistance