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Is this For Real?

By Greg Saitz

A slew of swindles—ranging from crude to sophisticated—target older Americans. Here are steps you can take to protect yourself.

In this article:

Internet/email scams

Telemarketing scams

Investment scams

Health product scams

Tips for playing it safe

“Hello, grandma? It’s me. I’m in trouble and I need you to wire me money right away!”

“I’ve been arrested.”

“I’ve been mugged.”

“I’ve been in a car accident.”

“I’ve been detained in North Korea by the secret police after trying to smuggle 10 million copies of Elvis’ ‘Christmas Album’ into the country.”

Are you suspicious yet? Even if you don’t have any grandkids or if you hadn’t been fed that last line, you should be.

Known as the grandparent scam, the above scenario is just one of dozens, if not hundreds, of cons that scam artists from around the world are looking to perpetrate on unsuspecting victims.

Have a telephone? You’re vulnerable. Have a computer and email address? You’re vulnerable. Have health concerns? Money saved for retirement? Watch out.

Con artists spent 2010 aggressively targeting older people with their swindles, according to a recent annual report from the National Consumers League (NCL), which lists fake check scams, sweepstakes claims, and Nigerian money offers among its top 10 rip-offs.

“There’s an ever-increasing number of ways consumers can be defrauded,” says John Breyault, director of the NCL’s Fraud Center. “People should be more on their guard than ever. That said, it should not cause you to hide under your covers.”

So throw back the quilt and read on. Here are four key areas where scammers are hard at work trying to dip into your wallet, and what you can do to thwart them.

Internet/Email Scams


Photo by Jonathan Olson

Rose Dostert’s phone started ringing at 7 a.m. one Saturday last year and the calls kept coming, some from people she hadn’t heard from in years. “Are you OK?” they asked. She had no idea what they were talking about.

In short order, though, the retired educator from Guilford, Connecticut, learned someone had hacked her email account and sent a message to everyone in her address book. The email, sent as if from Dostert herself, said she had been mugged in London and needed her friends to wire money so she could get home.

“I was just shocked at the number of people who fell for it,” says Dostert, who noted good friends weren’t fooled by the poor English used in the email supposedly sent by this former English teacher of 30 years. “Interestingly enough, I had a couple of people who were willing to send the money.”

While Dostert said the incident was disconcerting, she wasn’t too worried because she had no sensitive, personal information in her email account.

Another email scam relies on fooling people not about personal connections, but rather business connections. Known as phishing or spoofing scams, con artists send out official-looking messages purportedly from banks or other well-known organizations asking for consumers to change or verify personal information, such as passwords or Social Security numbers.

So why do fraudsters still send these even though the scams have been circulating for years and are widely known about?

“The short answer is they’re still making money,” Breyault says. “It’s incredibly cheap for them to send out millions of emails.”

With so many messages going out, the odds are someone will unwittingly respond. In January, that someone was a retired Missouri educator who received an email from what looked like Bank of America stating something about fraudulent activity with the FDIC that required her to change her password.

She clicked on the link in the message and it took her to a page that looked like her sign-in page. But, the retired teacher says, the site wouldn’t accept her password.

She became suspicious after a few tries and called the bank. A representative told her they never ask for personal information through email.

“It made me feel stupid for even replying to it,” says the woman, who asked to remain anonymous. She now tries to read about scams and how to protect herself. “This one just caught me unaware because it looked so much like Bank of America’s Web site.”

Recipients should never click on links in emails that ask for personal information, even if the message looks legitimate, the consumers league says. Of course, emails that seem blatantly fraudulent to most people still succeed with some.


Photo by Steve Norman

Such is the case with emails that claim the recipient has millions of dollars waiting for them in (usually) an African country through a sweepstakes win. All the lucky beneficiary needs to do is send bank account information or provide advance payments for taxes, bonds, or other fees, according to the NCL’s Fraud Center.

“You just don’t respond to those,” says John Hoffman, a retired teacher and school administrator from Salisbury, North Carolina. “They really make it so obvious it’s a scam. Anybody with any common sense is not going to follow up. If you’ve got $5 million, why would you share it with me?”

Telemarketing Scams

Sometimes, all a persuasive scammer needs is a telephone to make his or her con a profitable one. Tele­marketing fraud affects millions of Americans each year and costs them $40 billion, says the Federal Trade Commission (FTC).

Despite the federal Do Not Call Registry, which was put in place in 2003 and holds more than 191 million phone numbers, the consumers league has seen an increase in complaints about telemarketing fraud, according to Breyault. “Scammers typically don’t pay much attention to the Do Not Call list,” he says.

In addition to pulling the grandparent scam, con artists call people to tell them they’ve won lotteries or sweepstakes, with offers to sell unwanted time-shares, to solicit donations to supposed charities, or offer ways to make lots of money, according to the FTC. The goals are always the same though: to get you to give them your money or personal information.

That’s what happened a few years ago to a retired teacher in Arizona. She says she received a call from someone who wanted to verify her Medicare information and pressured her to disclose her Social Security number “so they could verify benefits.”

The teacher relented and gave the caller her number. But then she contacted the Social Security Administration to follow up. Just as Bank of America told the Missouri teacher, a representative at the federal agency said they would never ask for such information over the phone.

“I was the second call that morning they had received about the same scam,” the teacher says.

Seniors are common victims of telemarketing scams, says Michelle Chua, a senior attorney with the FTC’s Division of Marketing Practices. At least in scammers’ eyes, older people tend to be more trusting and polite toward strangers, the FTC says.

Often fraudsters push victims to wire money to them through Western Union or another money transfer business. That amounts to sending cash, the FTC says, and the chances of recovering that money are slim.

“That’s a huge sign of a scam,” Breyault says about wire transfer requests.

Other warnings of fraud include demands to act immediately, refusals to send written information, and any use of scare tactics to close the deal, say experts.

In the end, the best way to deal with these kinds of calls is to just hang up. Don’t worry about hurting scam artists’ feelings. They’ll get over it.

Investment Scams

The investment industry may be a highly regulated one, but it also has its share of unscrupulous advisers and flat-out scams. It’s no wonder, considering Americans held $16.6 trillion in retirement funds as of the third quarter of last year, according to the Investment Company Institute.

From Ponzi and pyramid schemes to pump and dump stock frauds, investment scams cost victims billions of dollars a year, says Lori Schock, director of the Office of Investor Education and Advocacy at the Securities and Exchange Commission. (Ponzi/pyramid schemes typically funnel money from new investors to pay promised returns to those already invested. Pump and dump stock frauds involve scammers artificially inflating a stock’s price, then selling their shares at the peak before the price plummets.)

As with other types of scams, ones offering can’t-miss business opportunities or guaranteed investment returns through cold calls, free-lunch seminars, and other methods can disproportionately target older investors.

“Why do fraudsters go after retirees?” asks Schock. “It’s the old Willie Sutton principle—that’s where the money is.”

One out of every five Americans older than 65—more than 7.3 million people—have fallen victim to a financial swindle, according to a 2010 survey from the Investor Protection Trust. But Schock says victims aren’t necessarily naive or novice investors. Many are financially literate, college educated, married men who go with their gut on investment “opportunities.”

“It’s going with your gut that gets you into trouble because you didn’t do your research,” Schock says.

Investigating a sure-thing investment or business or the stockbroker who’s trying to sell it to you is vital, says Breyault. There are ways to check to determine if the adviser who called you out of the blue is registered at the state and national level.

The same goes for examining an unsolicited stock pick that might have come through your email or from that unfamiliar investment adviser on the phone. And be wary of advisers using meaningless titles such as “senior specialist” or a bunch of abbreviations after their name on a business card.

Schock recalls a financial adviser in Florida who used the letters H.S.D. after his name. It stood for high school diploma.

“It’s even more important today than it has been in the past for consumers to do their due diligence,” Breyault says. “Sometimes people spend more time researching a toaster than an investment opportunity.”

Even with a critical eye, it can be hard to spot financial scammers. Last year, the SEC accused a Florida money manager of operating a Ponzi scheme for two decades that targeted, of all groups, the FBI and other law enforcement agencies.

Health Product Scams

Would you like to drop a few pounds? Alleviate that arthritis pain? Or find a miracle pill to combat cancer, diabetes, or Alzheimer’s disease?

The makers of Kinoki foot pads market their product as an “ancient Japanese secret to perfect health.” Place the pads on the soles of the feet overnight and, voila, they suck out toxins, heavy metals, and chemicals from the body.

Their use, the sellers say, could treat everything from headaches to high blood pressure and more—all for just $19.95 (plus $9.95 shipping and handling)! If it were only so.

Last fall, a federal judge banned the marketers from selling or promoting any food, drug, or medical device after the FTC sued. The brains behind the foot pads also agreed to a $14.5 million judgment—representing total sales of the product—although they don’t have the money to pay it.

“Miracle products claim to cure serious conditions . . . and a host of symptoms,” says the FTC Web site. “Unfortunately, these products, devices, and treatments often are unproven and useless, making promises they can’t fulfill.”

Asserting that a product (like pure emu oil) can cure lots of different, unrelated diseases should be a tip-off that it’s a scam, the federal Food and Drug Administration (FDA) says. The same is true, the FDA says, for items that are billed as quick fixes or are hyped with meaningless medical jargon (hunger stimulation points, anyone?).

Just remember, as the National Institute on Aging said, “There is still plenty of truth to the old saying, ‘If it sounds too good to be true, it probably is.’”

Play it Safe

There are plenty of ways to lose money to scam artists. Here’s how to lower the odds you’ll become a victim.

General safety:

  • If it sounds too good to be true…you know the rest.
  • To check out a product or company, type the name and “scam” or “fraud” in an online search engine.
  • To avoid being put on “sucker lists,” don’t fill out contest entry forms at malls or fairs.
  • Enroll in affordable identity theft protection from NEA Member Benefits.

Online safety:

  • Don’t open attachments or click on links in emails from people you’ve never heard of before.
  • Remember that your bank, brokerage, federal agencies, and other official organizations never ask via email for you to verify or change passwords, or for personal information.
  • Don’t wire someone money who’s contacted you online.
  • Delete emails from senders who claim you’ve won a lottery or are eligible for millions just by helping them hide a fortune.

Telemarketing safety:

  • Sign up for the Do Not Call list at or by calling 1-888-382-1222.
  • Don’t buy things from unfamiliar companies. Check them out with the Better Business Bureau or your state/local consumer agency.
  • Ask for written material (and wait to get it) about an offer or charity before acting.
  • Screen your calls with caller ID or an answering machine.
  • Don’t pay in advance for services or products.
  • Just hang up.

Investing safety:

  • Check out a stockbroker through BrokerCheck or by calling 800-289-9999.
  • Contact your state securities regulator about an adviser or specific investment.
  • Be wary of unsolicited offers.
  • Promises of guaranteed returns are almost always guaranteed scams.
  • Free-lunch seminars can be legitimate, but don’t feel obligated to invest because someone bought you a steak and a baked potato.
  • Investigate an investment, even if a friend or someone in your religious congregation claims it’s a sure thing.
  • Don’t be duped by letters after someone’s name on a business card or titles such as “senior adviser.”

Health product safety:

  • Watch out for products that promise quick or painless cures.
  • Understand that if medical researchers haven’t found a cure for a disease, marketers online and in infomercials haven’t either.
  • Personal testimonials are hard to verify or could be made up.
  • Check with your doctor about pills or products being pitched to you.

Sources: Federal Trade Commission, Food and Drug Administration, Federal Bureau of Investigation, Securities and Exchange Commission, National Consumers League, National Institute on Aging.


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