Search Results for: financial scams

Financial Scams

  • February 8, 2015 /


As the number of Americans age 65 and up has risen, retiree fraud has become a huge growth industry. According to a 2010 survey by the Investor Protection Trust, 20 percent of seniors have been victims of financial fraud. It’s estimated that $3 billion are lost annually by seniors to financial scams.

Seniors are often considered a relatively easy target for hucksters. Not only are their numbers rapidly growing, but members of earlier generations were generally raised to respect authority and to be polite and trusting, making them easy prey for scammers.

They also often have good credit and sizeable assets – according to the Employee Benefit Research Institute, people age 65 and older have an estimated $8.6 trillion in their retirement accounts, not counting personal savings and pensions.

There are some common-sense rules for avoiding becoming a fraud victim. It boils down to taking your time and doing your due diligence. Even if the person you’re dealing with is someone you know socially, you should beware. Jim and Diane Smart, two active members of the Church of Jesus Christ of Latter-Day Saints in Utah, lost $200,000 to a fraudster whom they knew through their close-knit group at church.

Even trained and experienced professionals can fall victim. Steve Sampler, a licensed stockbroker with years of investing experience, was scammed out of $40,000 by a high-pressure investment salesman.

Contrary to stereotypes, investment fraud victims are typically well-educated with above-average incomes and financial knowledge. Their interest in new ideas and openness to try new things often lead them astray.

Do your own investigation

Scammers exploit the fact that many people don’t do their due diligence, instead relying on the salesperson themselves for information.

There are many resources available to you nowadays to investigate both the person and the company they claim to represent. Do your own independent research and talk with friends and relatives. If the salesperson claims to represent or be affiliated with a legitimate business, contact the business and verify their credentials.

Make sure you fully understand the offer, the background, and the risks. Be especially careful of unsolicited offers you receive in the mail or through email. Remember, if something sounds too good to be true, it’s not true.

Don’t judge by appearances

Fraudsters know how to present a polished, professional appearance. They can make any offer sound like a great deal, with expensive attire, slick presentation materials, polite mannerisms, and friendly gestures. Just because the salesperson and company present a nice appearance doesn’t mean the offer is legitimate.

Ruth and Len Mitchell were taken by their accountant, whom they knew through their ice skating club.

Take your time

Like Steve Sampler, fraud victims often get rushed into investment schemes with the pitch that “there are only a few left” or “this once-in-a-lifetime opportunity won’t last long”. Take the time needed to research both the offer and the company, and don’t allow the salesperson to rush you into anything.

Watch out for salespeople who exploit your fears

Many retirees worry about having sufficient retirement savings, especially in the face of rising healthcare costs. Fraudsters know to pitch their schemes to appeal to these fears.

“Free lunch” investment scams

Seniors are popular targets of “free lunch” scams. In these scams, the victim is invited with others to attend a free lunch or dinner and then listen to an investment presentation. The victim is guilted into purchasing whatever product is being peddled. Even if the announcement says “nothing will be sold at the presentation”, the victim is subjected to a sales pitch at a later date.

This video tells more about “free lunch” scams and how to protect against them.

Don’t be afraid to complain

If you suspect fraud, don’t let embarrassment, or fear of appearing unable to manage your affairs, prevent you from filing a complaint with federal or state regulatory agencies.

This website shows how to report different types of fraud.

Protect yourself online

Use a reputable firewall, antivirus, and antispyware software on your computer and keep them up to date. Don’t open attachments or click on links in emails from unfamiliar people, as they might contain malicious software that a scammer can use to take control of your computer remotely or steal information.


This scam meter helps you determine whether an offer you’re considering is likely to be a scam.

This risk meter can help you determine whether you have characteristics and behaviors that make you likely to become a fraud victim.

Read the Financial Self-Defense Guide for Seniors by the Certified Financial Planner Board of Standards.

Visit the SEC’s Seniors page for information about investing and investment scams.

Watch this video for some general tips to avoid scams:


  • December 7, 2015 /


Sad to say, scams against seniors have grown into a huge industry.  Scams targeting seniors have become so prevalent that they are considered the “crime of the 21st Century”. Many seniors have significant financial resources, many are socially isolated, and many are trusting by nature. This makes them the ideal victims for experienced, professional scammers. A 2015 report by True Link Financial indicated that seniors lose $36.48 billion each year to elder financial abuse.

Financial scams often are unreported, or the perpetrators are difficult to find and prosecute, so they’re considered a “low-risk” crime. But the results can leave the victims financially and emotionally devastated, with little time to recoup their losses.

Here’s a news report with one scam victim’s story:

Myths and Facts About Senior Scams

Below are a few myths and facts about senior scams:

MYTH: I don’t have many financial assets, so I’m not a target for scammers.

FACT: It’s not just wealthy seniors who are victimized – seniors in all economic groups are targeted. Many scams are unreported, so a reported loss of just $20 to scam means there may be annual losses of $2000.

MYTH: The victims of senior scams are mainly those who suffer with memory loss, dementia, Alzheimer’s disease, and social isolation.

FACT: These are indeed some factors that make people vulnerable to scams. But seniors who are well-educated, financially experienced, and highly social are also frequent victims. They tend to meet more people and be more confident in their knowledge and abilities, making them better targets for professional scammers. Even celebrities and high-profile executives have been victims of scams.

MYTH: Scams are mostly perpetrated by strangers, often operating overseas.

FACT: The vast majority of scams result from “trust abuse”, where a relative or caregiver takes advantage of their position of trust to scam the victim. In fact, over 90% of all reported instances of elder abuse are committed by an older person’s own family members, most often their grown children, followed by grandchildren, nieces and nephews, and others.

Ten Common Scams

Here are ten of the most common scams perpetrated against seniors:

1. Financial Investment scam: an unscrupulous salesperson convinces a victim to invest in a risky, or outright fraudulent venture, often employing high-pressure sales tactics such as “this is a once in a lifetime opportunity” or “get it before it’s gone”.

2. Charity scam: an unscrupulous charity takes advantage of current national or international crises to request donations. The scammer often relies on memory loss to ask for donations repeatedly from the same victim.

3. Sweepstakes scam: a scammer says the victim has won a huge prize but must send some money in order to claim it. In another version, the scammer claims to have won a prize and offers to share it with the victim, but asks for some money to cover “shipping and handling”.

4. Obituary scam: a scammer views obituaries in the newspaper and attempts to collect nonexistent debts from the survivor of the deceased.

5. Magazine scam: a magazine publisher sends free issues and then claims the victim owes money for the subscription.

6. Medicare scam: a scammer poses as a Medicare or financial representative to obtain a victim’s private information. Or the scammer will provide a simple medical check at a fake clinic and bill Medicare for the service.

7. Shopping scam: a scammer will advertise a product at a low price but later add hidden fees and charges. In an even more insidious version, a scammer will send a counterfeit health product or prescription drug in place of the actual product. The counterfeit product may be useless or even outright dangerous.

8. Sweetheart scam: a scammer “befriends” a senior in order to scam them.

Watch this video to learn more about this common scam:

9. Internet scam: knowing that seniors often spend a lot of time on the Internet, a scammer attempts to obtain their personal information or access their computers using malicious software or fraudulent email.

10. Grandparent scam: a scammer poses as the victim’s child or grandchild in order to get the victim to send money.

Social Media

The advent of Facebook, LinkedIn, Twitter, and other popular social media sites has made it much easier for scammers. Scammers now have easy access to many people’s personal information to make their scams appear more credible.

Using data they collect about you from various fan pages, scammers can pretend to be familiar to you in order to gain your trust. Or they join online interest groups and networks, such as school alumni groups. Then they pose as legitimate members of those groups in order to gain members’ trust. Once they establish a relationship with you, they can attempt a variety of scams.

Commonly, they use their relationship with you to promote dubious investment offers. This is known as affinity fraud. Or they could even try to trick you into revealing your personal or financial information to them or sending them money.

How to Avoid Becoming a Victim

Here are some tips to avoid becoming a victim of a scam:

1. Never give out personal information over the phone unless you initiated the call. Never post or send sensitive personal information online or by email. Government agencies such as the Social Security Administration, IRS, or Medicare will never call or email you to ask for personal information.

2. Be careful of what you post on public social media and other websites, knowing that this information is potentially available to scammers.

3. If you receive contact online from someone pretending to be familiar with you, verify the source. Ask others if they’re familiar with that person. Be particularly suspicious of accounts that are new and with little previous activity.

4. Take your time and do your due diligence before sending money to anyone. Make sure the investment, charity, or person on the other end of the phone is legitimate. Don’t fall for high-pressure tactics or emotional appeals.

5. Consult a relative or friend you trust if you’re unsure about a call or offer you received.

6. Only do business with and purchase products from reputable commercial companies. You can view the Better Business Bureau report for a company you’re unsure about. Beware of cut-rate and low-priced products or services. Consult your doctor or pharmacist if a drug or health product you’ve purchased looks suspicious.

Visit the FBI’s senior fraud page for more tips on protecting yourself from fraud.

The SEC’s webpage has information about protecting against affinity fraud.

This scam meter helps you determine whether an offer you’re considering is likely to be a scam.

This risk meter can help you determine whether you have characteristics and behaviors that make you likely to become a fraud victim.

If You’ve Been A Victim

If you, or a senior you’re caring for, have been a victim of a scam, don’t be afraid or ashamed to report it. The scammers are depending on your silence to continue perpetrating their crimes. You may be able to recover some of your lost property, and your action may help prevent others from being victimized.

The AARP Elderwatch page has resources to help report senior fraud.


Thanks to Patricia Sarmiento of for the following links:

8 Tips for How Seniors Can Protect Themselves from Money Scams

16 Tips for Avoiding Online Fraud and Identity Theft

Fraud Prevention Tips Everybody Should Know (But Doesn’t)

11 Ways to Prevent Identity Theft While Traveling

9 Steps to Protect Against Credit Card Fraud Now

The Step-by-Step Guide to Finding, Hiring, and Working with Contractors

6 Tips to Prevent Fraud and Identity Theft for Your Kids

How to Protect Yourself from the Three Biggest Types of Homebuyer Fraud

The Guide to Understanding Vehicle History Reports

Eight Common Internet Scams

  • February 10, 2015 /


Like the rest of us, scammers are making good use of the Internet to conduct their affairs. Internet scams have increased in number and sophistication. Even savvy and experienced Internet users can get taken. These scams aren’t necessarily aimed specifically at seniors, but seniors often become the victims because they have significant financial resources and tend to be more trusting.

Here are some common Internet scams.

1. Fake check. An email comes in promising a lucrative salary in return for relatively little work. You might even receive an “advance”, in the form of a (bogus) cashier’s check. All you have to do to get started is to send some money to a certain address. The offer appears legitimate, and may even use the name and logos of a well-known business or charity organization.

This news report gives one man’s story.

2. Fake job offer. A common variation of the previous scam is an email offering a job at a well-known company or organization. All you have to do is fill out an online form with some information. The offer of course is bogus, and is created by the scammer in order to gain information from you for identity theft.

3. Fake charity solicitation. Shortly after a well-publicized disaster, fake emails are sent with the name and logos of the Red Cross or other well-known relief or charity organization, asking urgently for donations. Of course, the email is actually from the scammer and is an attempt to steal your personal information and credit card or bank account number.

4. Nigerian scam. You probably have experienced this. You receive an email from a “wealthy” person overseas who needs your help transferring a large sum of money. You are promised a substantial cut of their business or fortune; all you have to do is send a small amount to cover some “fees”. The more you send, the more they ask for. You never get a share of the fortune, because there is none.

5. Phishing emails. You may also have received these emails. You get an official-looking email from a bank, credit card provider, or your Internet service provider, stating that you must verify some information or risk losing your service.

6. Overpayment scam. This relates to an expensive item you may have listed for sale such as a car or boat. A scammer sends you an email offering much more than the asking price. The email says the extra is to cover shipping fees to send the item overseas. The scammer sends you a cashier’s check and asks you to send the item and the price difference. It turns out the check is either a forgery or a genuine check but not authorized by the bank. Your bank demands you to make up the amount from your own funds. You have now lost both the item and the amount of the bogus check.

7. Fake money-making opportunity. This is a common scheme by unscrupulous Internet marketers. You may receive emails promising quick online riches for doing relatively little work. All you have to do is send some money or purchase an ebook or online course. The course turns out to be either nonexistent, or grossly overpriced. Or after purchasing it you are told you have to buy much more expensive items to go along with it.

8. Relative in trouble. You receive an email from a relative (or grandchild) begging you to send them money, as they are stranded or in trouble. This scam may also be conducted over the phone – you might get a call from someone claiming to be your grandchild. They may be crying. They may beg you to just send them the money and not contact their parents. This ploy can be effective as many grandparents will go to great lengths to help out their grandchildren.

If you receive an email or call you’re not sure about, check it out before taking any action. The scammers are well-practiced and know how many people think and feel. Don’t let anyone pressure you into taking rash action. Visit this page for more tips for avoiding Internet fraud.

Five common retiree scams

Frauds and scams aimed at retirees and seniors have become big business. Here are five common types of scams and tips for avoiding become a victim.Continue reading

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Retiring abroad

  • April 2, 2015 /

With living costs spiraling upward in the U.S., many are attracted to the thought of retiring in foreign countries. The idea of starting your golden years in a culture and environment totally different from the one you’ve known all your life – this may be either alluring or frightening, depending on your point of view. Surveys indicate that as many as 3.3 million of the 78 million American Baby Boomers are seriously considering retiring in another country. Estimates put the number of U.S. retirees living outside the U.S. at over a million.

Many retirees are attracted to the low cost of living, georgeous natural scenery, laid-back lifestyle, and exotic cultures to be found in foreign countries. Certainly, foreign destinations offer these advantages. You can potentially live quite well for a fraction of the cost, and find your retirement dollars go much farther. Retirees tell stories of living well in Central America on $1,500 per month.But moving to a foreign country in your golden years takes some thought and preparation, and isn’t for everyone.

Most people who successfully retire abroad are those who have traveled extensively in foreign countries before they retired. Living in a foreign country involves adjusting to a foreign culture. Although some countries now have significant numbers of American expatriates, Americans are still a distinct minority and you can’t expect to completely recreate your American lifestyle in another country.

Many countries have a slower pace than in America, and you might have to get used to waiting days or weeks for a delivery or to open a bank account. You should visit your destination and live there for a few weeks or months to make sure you really like it, and familiarize yourself with the language and culture. Also visit at various times during the year if possible.

Shipping household items abroad can be expensive. You’ll likely want to carry just the minimum you need, and store the rest in the U.S. You can plan on buying new furniture and large household goods after you arrive.

Retiring abroad is a realistic option for many, and lots of people have successfully made it work. Over 500,000 Social Security recipients reside abroad, an increase of 25% since 2000. But it does take a great deal of planning. Here are some specific things to consider.

Residency requirements and local laws

Different countries have different immigration and residency regulations so you will need to know what your eligibility to reside in your chosen destination and any restrictions. In fact, many countries have laws and practices that are different from the U.S. and you should carefully investigate the laws in your proposed destination country. If you’re looking to purchase property, you’ll also want to look into the real estate laws.

The State Department’s Country Specific page can give you residency information about any country, and also information about medical concerns and healthcare, crime and security, local attractions, common scams, and much more.

If you have any questions you’ll want to consult a qualified realtor, financial advisor, or tax advisor to advise and represent you.


Speaking of healthcare, this is a big issue for many retirees. Healthcare costs tend to increase as people get older. But everyone should have access to quality healthcare in case they need it – accidents and illnesses can happen anytime. Medicare does not cover health care in foreign countries. If you have retiree health benefits through your former employer, you will need to verify whether it applies overseas.

Private medical and dental coverage in your foreign location, and medical evacuation to the U.S. if needed, are essentials. You might also consult your physician to determine what your healthcare needs are expected to be.


You will also need to ensure that you will be able to receive Social Security benefits in your foreign location. You can consult the Social Security Administration’s Office of International Operations page for this information. If you’re receiving other retiree benefits such as military retired pay, you will want to check with the appropriate organization whether you can receive these benefits while living abroad.

You might also work with your financial advisor to help you coordinate moving your savings abroad and look into opening local bank accounts. You will also want to beware of common international scams, which are increasing in frequency with the Internet. The State Department’s International Financial Scams page can give you more information.

If you retain U.S. citizenship you will still be required to file a U.S. federal tax return every year, even if you owe no taxes. Even if your income is earned in a foreign country you may still owe U.S. taxes on it if it exceeds a certain limit. The IRS’s tax information page can give you more information about tax obligations while living abroad. Conversely, any money or other property you acquire overseas might be subject to local taxation, as well as local estate tax rules. The U.S. has agreements with some foreign countries that exempts income earned in those countries from foreign taxes. The IRS website has a list of these countries.

These are some of the main considerations when choosing to retire in a foreign country. Most people who move abroad do it for the adventure and novel experiences. They are looking for new things to try and seek opportunities to get involved in their new communities. Retiring abroad can be exciting and rewarding, as long as you approach it with the proper mindset and preparation.

For more information

For detailed articles and information about retiring in various foreign countries, see the Expat Exchange and

For more information about a specific country, see the State Department’s Country Specific page.

For information about Social Security benefits for overseas retirees, see the Social Security Administration’s Office of International Operations page.

The IRS’s tax information page gives information about taxes for U.S. citizens living abroad.

International Living magazine annually publishes its list of The Best Places to Retire, as well as other reports and articles related to retiring overseas.

Watch this video for some tips about moving abroad, by the editors of International Living.

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7 ways to run out of money in retirement


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That’s why it’s crucial to plan ahead of time and be careful how you manage your savings, possibly with the help of a reliable financial advisor. No matter how well you plan, sometimes life throws unexpected curves, and there’s no avoiding them. But at least you can arrange your finances to make the best of whatever comes.

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Grandparent scam

  • November 15, 2015 /


The “grandparent scam” is one that has become unfortunately common. In this scam, you get a call from someone claiming to be your grandson or granddaughter. They claim to have been arrested or in an accident while on vacation in a foreign country, and need you to wire them money in a hurry so they can pay a fine or medical bills and get back home.

This scam can be effective because it preys on people’s emotions. One official at AARP said, “We’ve had doctors and lawyers fall for this. It doesn’t matter what your educational level is because it triggers something emotional, it causes you to act.” One grandmother who lost $18,000 to such a scam said, “You are blinded by emotion. Totally blinded. You don’t think rationally when this happens. You know, your family comes first.”

Grandparents who are 65 or over and home alone are especially vulnerable. They’re easy to reach on the phone and many feel like they don’t hear often enough from their (real) grandchildren.

According to one former scammer, who was awaiting sentencing in California, “We target people over the age of 65, mainly, because they’re more gullible. They’re at home. They’re more accessible. Once you get them emotionally involved, then they’ll do anything for you, basically.”

The effect on the victims can go beyond the financial loss. “It’s not simply the loss of the money,” says the assistant U.S. attorney who prosecuted this former scammer. “They feel stupid, they fell gullible, and they have nightmares about it and anxiety and depression.”

Scammers can be hard to catch, since many operate outside the U.S. and use equipment to disguise their phone number with a familiar number. Many track down information readily available on social media, such as names and ages of actual grandchildren, and use that to make their ruse seem more plausible.

A variation of the scam involves a second scammer, who claims to be an older relative, family friend, or law enforcement official and explains what fines need to be paid. The scammer typically asks for thousands of dollars. He or she may feign embarrassment about the alleged trouble and beg the grandparent to keep it a secret.

How to avoid falling for this scam

As with other scams, the best way to avoid falling victim is to take your time and do your due diligence. Michigan Attorney General Bill Schuette recommends that you stay calm and avoid acting out of a sense of urgency. Before sending any money, you should verify the identity and location of the grandchild who claims to be in trouble. Even if the caller begs you to keep it a secret, hang up and call a trusted family member or friend who can confirm your grandchild’s whereabouts.

Remember that you should never give out bank account or credit card numbers to anyone who calls you on the phone. Scammers are often expert professional criminals who are skilled in getting you to part with your money. Also, be careful what information you post on social media. Scammers can make use of this information to help make their scams sound genuine.

The scammer will typically ask you to wire money through Western Union or a similar service, or provide bank account numbers. Remember that wiring money electronically is not like writing a check – once it’s picked up, it’s gone.

If you realize you’ve been scammed, contact the wire transfer service immediately. If the money hasn’t been picked up yet, you can retrieve it.

The Consumer Federation of America has additional tips for avoiding this type of scam.