Retirement may be the time to take it easy – but not too easy or you might fall victim to a scam! In our radio show below we’ll talk about some of the common scams targeting seniors and how to protect your money.
While younger people are more likely to fall for a scam, seniors are losing the most money. Victims over age 80 lost nearly $1,100 last year. I work with older adults who are in or near retirement. Retirees cannot afford to fall for these scams; they are usually on a fixed income, and the money they lose may not be able to be replaced. Don’t let scams set you back in your retirement planning.
Seniors are often targeted by scammers:
- They often have more money. Scammers see the nest egg seniors have worked so hard to build as an opportunity.
- They were raised to be polite. Older Americans may think it’s rude to hang up the phone on someone, and scammers can exploit their hesitation to disconnect.
- They often don’t report it. They may be embarrassed, or they may not want their family to know they’ve been scammed. Only about 2% of scams against seniors get reported!
- They make poor witnesses. Even if they do report scams, seniors may struggle to remember the details necessary to investigate it.
Medicare Card Scams
This summer, seniors on Medicare will be getting new cards in the mail. Ironically, it’s part of an effort to protect them from scams. Previously, Medicare cards have had their Social Security numbers printed on them, but the new cards will strip the Social Security numbers and replace them with an 11-digit identifier with both numbers and letters. Scammers are using this transition as an opportunity. They are calling seniors and asking them to pay a fee, or asking them to give out personal information which puts them at risk for identity theft. Here’s the message to seniors: you do not need to do anything when you get your new Medicare card in the mail. If anyone calls saying otherwise, hang up.
There are a number of ways scammers are reaching out to potential victims:
- In one scam, the con artist claims to be with the IRS, saying the person on the other end of the line hasn’t paid his taxes. The scammer then says the victim will be arrested unless they pay with a prepaid debit card.
- The IRS is now contracting with private collection firms to settle overdue tax debt. Scammers are also posing as these firms.
The number one thing I want people to know is, the IRS will never contact you through phone, email, text or social media without mailing you a bill first. They won’t threaten you. And they won’t require you to pay a certain way such as a prepaid debit card. All tax payments will be made to the U.S. Treasury and not a third party.
Do you have big travel plans in retirement? Watch out! More than 2,500 complaints were filed with the Better Business Bureau in 2017 regarding travel and vacation scams. Scammers will post photos of properties that aren’t for rent or that don’t exist to try to get your credit card information. Look closely at deals on social media and sites like Craigslist. Always use a reputable company and website to book your trip. Do your research – search for reviews and complaints before booking. Check out the company with the Better Business Bureau.
Summer is the prime time to snag a part time job. Many of my clients who are retired look for part-time work to stay busy. Job scams can be found on Craigslist, online job boards, social media or even sent to your email. Scammers posing as an employer are looking to collect your Social Security number and bank information. Watch for unsolicited offers, vague job descriptions, paying upfront, doorstep selling or working from home. You should also be wary if the employer either has limited contact information or refuses to meet with you.
Home Improvement Scams
Always use caution when hiring a home improvement contractor, especially after a major storm. The Better Business Bureau has three tips to help you spot a home improvement scam:
- First, watch for red flags like paying upfront or cash-only deals.
- Second, ask for references. A bad contractor will be hesitant to share this information.
- And third, know the laws. Ask for identification, licensing and insurance. Confirm they will get the proper permits for work.
Student Loan Scams
Students are finalizing loans right now to pay for college this fall. Scammers aren’t just going after college students; they know parents and grandparents are co-signing these loans and are likely looking for some relief. Scams include phone calls, texts, emails and letters offering relief from federal student loans or warning borrowers that student loan forgiveness programs will end soon. Scammers offering these types of services are after your money! Their tactics include making you pay upfront fees, promising immediate or total loan forgiveness or cancellation, and limited time offers. Never give out your Federal Student Aid Identification, or FSA ID.
Protecting Seniors from Scams
Go In Depth
If an elderly parent is convinced they’re getting a deal, but you’re convinced it’s a scam, talk about why. Go beyond telling them to hang up the phone or throw away the letter. Have an open conversation without shaming them. For example, let them know that the IRS will not call them, so the person on the phone may be a scammer. Or tell them they can’t win the lottery without buying a ticket, so the letter they got in the mail is not legitimate.
Turn the Tables
Psychologists say this tactic may work. If they are falling for a scam, ask how you can get involved too. This can set off warning bells in your parents’ mind and help them realize both of your money may be at risk. This opens the door for an honest conversation.
Don’t Leave Them in Isolation
If you’re traveling a lot this summer, or you don’t live by your elderly parents, ask a trusted neighbor to keep an eye on them. What kind of mail do they get, and what type of phone calls? Do they seem like they’re hiding anything? It’s important to have someone watching out for our seniors.
If you’ve been scammed, you need to report it. Start by filing a report with the state attorney general. You should also a file complaint with the Better Business Bureau. If you feel like anything is suspicious on your credit card statement, call your credit card company to freeze the payment and get a new card number.
The Retirement Ready radio show is featured every Saturday on WTMJ 620 AM at 1:00 pm. We will bring you information on: Social Security options, retirement trends, options to retire with life changes and achieving a secure financial future. Listen live here: WTMJ 620AM LIVE
Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Diversification does not guarantee profit nor is it guaranteed to protect assets. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Drake & Associates does not offer tax or legal advice.
Advice and opinions expressed during Retirement Ready are solely that of the hosts or guests of Drake & Associates, LLC and not WTMJ Radio or The E.W. Scripps Company.