Beware of These Common Scams That Target Retirees

by Emily Guy Birken · 7 comments

Retirees are a favorite target of scammers and con artists. Not only do many retirees have a large nest egg that they might not know how to invest, but they also might feel reluctant to involve their family in their decisions, for fear of losing independence. These two factors mean that retirees are particularly vulnerable to scams.

But forewarned is forearmed. Just knowing that scams are rampant among seniors can be enough to help you have a healthy skepticism about any new offer. But it’s also useful to know what scams are most common.

Here are three scams that you may find yourself facing:

1. Social Security Fraud

With this scam, identity thieves will steal an individual’s personal information and use it to contact the Social Security Administration in order to change payment information to the thieves’ bank accounts.

How do the thieves get the personal information, such as Social Security number and bank account information? Generally, they just ask. Many identity thieves will call their victims and tell them that they’re from Social Security or their bank and ask them to confirm some information. Alternatively, they might tell the senior that they’ve won a cash prize that will be deposited in their bank account, but that the prize department needs their account number.

To combat this scam, be sure to never give out your information to anyone who calls you. If you suspect that you’ve been scammed in this way, you can contact the SSA’s inspector general. In addition, seniors can block all account changes not made in person at www.socialsecurity.gov/blockaccess.

2. Discount Prescription Scams

The cost of prescription drugs can often overwhelm elderly patients who are living on a fixed income. Con artists target this demographic — who are already feeling somewhat desperate because they might have to decide between important medication and money for food and other necessities — by offering prescription drugs for as much as 50% off. The scammer will explain that there’s an enrollment fee to join the discount club and will get a credit card number or bank account from the victim.

This is another situation wherein it’s clear that anyone who contacts you should be treated with suspicion. If you get a call about discount prescription drugs, ask for information in writing and hang up. You can do your own research and avoid the heartache of lost money.

3. Free Dinner Seminars

This particular scam can be very difficult to suss out, since there are legitimate advisers who sell products through dinner or lunch seminars. However, the majority of the investment seminars that you’ll encounter will offer investment advice that is, at best, a bad fit for you, and, at worst, a disastrous financial decision that only lines the pockets of the “adviser.”

In particular, variable-rate annuities are often sold at these types of informational seminars — with the promise of guaranteed retirement income for life. What the presenters won’t tell you is just how large a commission they’ll receive to get you to sign up for an “investment” that you probably won’t completely understand — and will likely leave you high and dry when you need your money.

When it comes to these sorts of seminars, simply say no to any high-pressure sales and always make sure you get a second opinion before you sign up. It’s probably best to just avoid free meals in exchange for investment advice, since there ain’t no such thing as a free lunch.

The Bottom Line

When it comes to your retirement nest egg, it’s not a bad idea to be a little paranoid. Better to double- and triple-check backgrounds and opportunities than to find yourself scammed.

Have you or a loved one been victim to any scams? Any advice?

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{ 7 comments… read them below or add one }

Jonathan July 13, 2013 at 6:39 am

Phone fraud is massive, especially with the elderly. It’s amazing just what the elderly can give out over the phone without realizing the risks. I heard my dad on the phone recently and he was having a conversation about his health and retirement funds. I thought he was speaking to a family friends but it was a sales call from the bank! I couldn’t believe it.

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Lifeisdynamic July 18, 2013 at 8:26 am

Older lonely hearts and dating websites are another scamming opportunity for so many thieves. Millions of dollars lost every month to these evil ‘people’ leaving the most vulnerable older people destitute and never able to work or begin again. Many driven to psychological and physical illness and an early grave.

Stay away from dating websites. There does not seem to be any dating website that is safe. Thieves have learned and continue to learn more clever ways of deceiving their victims.

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AJ July 18, 2013 at 9:11 am

This is one of the best articles I’ve seen on this site. It was specific without droning on and very good info. Thank you for a great job!

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DC July 18, 2013 at 12:25 pm

We’re encountered telephone scammers pretending to be one of our grandchildren in order to get us to withdraw money from our bank account for them. “Grandma, guess who this is . . .” Guess who doesn’t have any grandchildren . . .
Another current scam is someone posing as a telephone company employee who “needs to check your internet connection for a software problem”. If you are fool enough to let this person in – and on your computer – he/she scans for passwords and bank account numbers. Follow the dots . . .
Growing older is not easy nor is it for fools. When in doubt, don’t!

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Priswell July 21, 2013 at 10:32 am

The one that keeps coming up on my radar is the “Microsoft Tech Support” people that have “Determined that you have an error in your system, and they are going to help you fix it”. Some older friends fell for this, allowed them to control their computer, and they were fortunate not to lose anything. They “Microsoft Support People” had found their bank info and tried to remove money from their accounts. The nice people at the bank stopped it.

When they call me, I am particularly irritated, because I’m a 100% linux user and KNOW that MS isn’t getting error messages from me.

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Argie December 20, 2013 at 10:47 am

I get calls almost every day from “Paul in the shipping department” or “John at the front desk” telling me that I need a safety alarm in case I fall, and that by signing up I will receive free groceries worth $250. The first voice, Paul or John or whoever, is a recording. Then, if I stay on the line, a live voice comes on the line with a very compelling sales pitch for the system. It will more than pay for itself with the free groceries you receive! Then they want bank information. On the first call, while the live person was talking, I searched the internet for information about the company. Many bad reviews. The next call was the same, except the company name was different. The third call gave yet another company name. I have notified the local hospital, which administers a genuine safety alert system, and the local police (who were not in the least interested).

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Len J January 30, 2014 at 8:19 am

This one is real simple. I have caller ID. If I don’t recognize the number, I don’t answer the phone.

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