Pretty Confident You Won’t Be Scammed? That Could Be a Problem

Category: Financial and taxes in retirement

March 27, 2015 — So you are pretty sure you are financially literate and no one could scam you – better watch out! A recent study by researchers at DePaul University and the Rush University Medical Center came up with this scary result: Seniors who got financially related answers wrong, but were the most confident they got them right, were more often victimized by fraud. Fraud victims scored 5.39 on the overconfidence scale, vs. 4.21 for non-fraud victims. The authors of the study believe that this overconfidence, combined with declining cognitive skills, is a underlying reason for an alarming rise in fraud committed against the rapidly aging baby boom generation.

Anyone who reads the newspaper knows that fraud against seniors is a growing problem. Some of the most prevalent forms include “free” financial seminars or products, lottery and sweepstakes prizes, high yield/no risk investments, power of attorney or guardian abuse, etc. A study by the Certified Financial Planning Board found that 56 percent of financial planners know seniors who have “been subjected to unfair, deceptive, or abusive practices in connection with the delivery of financial advice or the sale of financial products.”

Beware vacation and snowbird rental scams
In the last few months your editor has personally witnessed a pair of what we hope are unsuccessful scams – but ones so deceptive that anyone could easily fall for them.

The first involved a rental property owned by a friend. He was alerted to the scam after a call from an investigator who was a friend. The detective wanted to know if the friend’s home was for rent, since there were pictures of the home online at Craigslist. The friend said yes it was available for rent – but not through Craigslist! Further investigation revealed that in fact the pictures were of his home – a scam artist had copied all the pictures and text from the authorized listing, reduced the price, and changed the contact information. Anyone who fell for this plausible bargain would have wired money somewhere and never seen the rental. Stories are legion in resort areas of tourists arriving at the door of their vacation rental, only to find they have been scammed. We haven’t heard of this happening to anyone in the snowbird rental market, but it is probably only a question of time. Be careful! See this article, “How to Avoid Apartment Rental Scams“, it has some excellent advice.

The second involved a panicked call from your editor’s 100 (at the time) year old mother. She was very upset that one of her grandsons was in jail, and needed money to get out. Fortunately she was still sharp enough to ask before acting. But she had come very close to sending money to the scam artist who wasn’t quite sure of the grandson’s name – until it was cleverly elicited from her. We hear of this scam happening frequently in Florida; sometimes the crooks are able to get multiple payments before the lights go on.

What can you do
You not only have to protect yourself, but if you have aging parents you have to help them too. Here are some ideas:
– Get yourself and your elderly loved ones on the “Do Not Call” list
– Never send money to any person you don’t know personally. Particularly don’t wire money to anyone until you’ve done your due diligence – once you wire it, it’s gone. Likewise don’t send money to charities that call you on the phone, email you, or show up at your door. Don’t make any investments with people that contact you, at least until you and your family or advisors have personally vetted them.
– Make your elderly relatives promise they won’t send money to anyone without asking you first (see link at bottom for tools that might help with this)
– If renting or buying something online, make sure you check the reviews. Beware Craigslist in particular – there are many legitimate sellers, but there are also many criminals masquerading as honest folk. Email or call the seller and get comfortable with them. Are they hiding something and completely forthcoming? Walk away if anything they are asking sounds strange. If they want money before you have had a chance to see the property, get nervous.
– Never give anyone who calls or emails you personal information of any kind
– Read the articles we have provided below to make sure you understand the kinds of scams that are out there, and what you can do to protect yourself and your love ones.
If it sounds too good to be true – it probably is!

Bottom line
It is a little scary that overconfidence is a leading contributor to financial fraud. Vigilance is key, and so is staying on top of the most recent fraud trends and prevention techniques.

For further reading
Financial fraud to elders a national epidemic
Overconfidence Linked to Fraud
New Savings Products Help Deter Senior Fraud

Comments?
Have you or a loved one been been approached or become the victim of financial or other type of fraud? What prevention tips would you advise?

Posted by Admin on March 26th, 2015

9 Comments »

  1. Your first suggestion- get your relatives on the do not call list is a useless suggestion. Lately the unwanted calls have been coming in as often as before. Some of them hang up as soon as contact is made. I have to assume these are the ones that get an alert that this is a DNC number. But, the interruption still has gone through. The other ongoing annoyance is the pre-recorded call that must be listened to all the way through to get a call back number. When the number is dialed, it either fails to connect (recognizes the number calling is on the DNC list?). or when someone answers, they respond that they are not authorized to respond to the DNC list. There has to be some way to stop these calls, but the DNC list is not it.

    by JIM TATE — April 1, 2015

  2. When renting a vacation rental go never do it on Craigslist or through a newspaper ad. Go through a reputable company like Snowbirds, HomeAway, VRBO, or Airbnb. It may cost a little more but it’s worth the peace of mind.

    by booch221 — April 1, 2015

  3. This comment came in from G:

    Just scammed by roofing company (storm chasers) located in Grand Junction, CO.
    Took my money and ran. I’ve been fighting it since October, last year. They don’t answer calls, emails, etc.
    Really weird people, too.

    by Admin — April 3, 2015

  4. Here is another scam that happened today to your Editor. Was called twice on my cell phone from the Internal Revenue Service (no agent name) and told to call back a number before enforcement action begins.

    Here is what the IRS says about this:

    If you know you owe taxes or you think you might owe taxes, call the IRS at 1.800.829.1040. The IRS employees at that line can help you with a payment issue – if there really is such an issue.
    If you know you don’t owe taxes or have no reason to think that you owe any taxes (for example, you’ve never received a bill or the caller made some bogus threats as described above), then call and report the incident to the Treasury Inspector General for Tax Administration at 1.800.366.4484.
    You can file a complaint using the FTC Complaint Assistant; choose “Other” and then “Imposter Scams.” If the complaint involves someone impersonating the IRS, include the words “IRS Telephone Scam” in the notes.

    Taxpayers should be aware that there are other unrelated scams (such as a lottery sweepstakes) and solicitations (such as debt relief) that fraudulently claim to be from the IRS.

    by Admin — April 3, 2015

  5. I keep getting a call from someone who claims they are from ‘Windows’ and are able to see inappropriate activity on my computer and I am being hacked. The first time they called I listened to them and the guy had me go on my computer and go to certain places so he could show me what was wrong. Can’t remember what he showed me but he claimed my computer was in jeopardy and needed to be cleaned. I am very skeptical of this stuff so I asked what had to be done. He said for some amount of money, which I have forgotten, they would clean it up. Well, there was no way I was going to go for this and told him NO and hung up. I think he called right back and tried to con me again and I hung up. Then I went to the internet and sure enough, it is a scam. http://blogs.microsoft.com/cybertrust/2014/06/26/is-that-call-from-microsoft-a-scam/

    Since then, these jerk scammers have called me at least 5 more times! I usually tell them they have called before and that they are scammers and not to call back again. Unfortunately, they keep calling. GRRRRRR!

    Beware of these evildoers! DO NOT let them con you, hang up on them! Just a piece of advice, I went to a local computer place due to some problems I had and these people were so nice and did a good job and were very fast. Go to a local place and you might be surprised.

    One more thing, I got scammed one time on a magazine subscription. I subscribed to a magazine and these people called and said they could renew it at a really great price. Again skeptical, I said I wouldn’t buy anything over the phone and to send me a letter in the mail. Well, stupid me did get a letter in the mail and then I thought it was legit and paid it. The price was $100 for a 3 year subscription. Well, the date on the publication for expiration never changed from month to month. I did call them and they assured me it would change. Well it didn’t. I wrote them and told them I wanted my money back. HAHAHAHA, that wasn’t going to happen. I contacted the Better Business Bureau in Chandler, AZ and they did contact this scammer and they said they would refund my money. They didn’t. The BBB tried several times and they kept playing the game saying they would refund my money. Never got it. Then I contacted other agencies but nothing panned out. So be very careful with any magazine subscriptions. These scammers are/were from Chandler, AZ and would you believe it, once in a while I get an offer for magazine subscriptions from them through the mail. How do these scammers stay in business?

    For about 3 years I have gotten phone calls from ‘Rachel’ and she was calls about the ‘economic stimulus’ and to press 1 to speak to a representative. OMG, these people are ruthless! I told them I wasn’t interested and to take my name off the list. They would hang up on ME! I am on the do not call list but it doesn’t matter. I must have gotten 200 phone calls from these scammers. I asked to speak to their manager and they hung up on me. They change caller ID constantly and on top of that, MY telephone number would be displayed and it was THEM! I haven’t gotten a call in probably a month. They are robo calls so who knows when they will be calling again. Do not do any business with them HANG UP!

    As the saying goes: “There’s a sucker born every minute” Don’t be one!

    by Louise — April 4, 2015

  6. I have also gotten those Window calls. I usually tell them I have no problem, but one does have to wonder where they get the calling list.

    As for local scams like the roofer:
    Something that may help with local scams.
    I have found Nextdoor very useful for finding services that are local. For example, lost pets, found pets, finding a plumber, roofer, dog groomer, etc. Sometimes classified and even free thngs, safety concerns and more. For example, today there was a person looking for someone to help with their cat who was recently diagnosed with diabetes…for a few weekends per year and a couple of weeks when on vacation. Paid, not paid, I do not know, but our neighborhood does not have a source of per sitters so this can be a good source to find a solution. Someone recently mentioned a roofer scam to be aware of. You will usually get a few recommendations when looking for a plumber or pediatrician. Clubs or events can be listed.

    These are micro neighborhoods and NOT anonymous. They just added a nearby neighborhood to my nextdoor and you can restrict yourself to your neighborhood or include the new one. Do not near anything other than an email address and your actuall name and address.

    http://www.nytimes.com/2015/03/04/technology/nextdoor-a-start-up-social-network-digs-deep-into-neighborhoods.html?_r=0

    Does it have a potential for bad “stuff”…yes. One neighboor complained that a silver BMW was speeding while her children were out (she does think that kids should play in the street). okay, speding is not good, but she then gave an address that belongs to my nextdoor (literally) neighbor. NOT him, no BMW, no speeding! That did get shut down quickly.

    In general, it works well in our neighborhood.

    by elaine — April 4, 2015

  7. I got the Windows call also. I engaged the guy and asked him how my windows could be having a problem since I have a mac? He really couldn’t answer that one. A good rule of thumb is never give personal info over the phone unless you made the call. Never give money to anyone over the phone unless you made the call.

    by Mike — April 4, 2015

  8. We haven’t had a land line in 10 years. We only use cell phones. When a call comes in and if I don’t recognize the number, I don’t answer it. If it’s a legitimate call, the person will leave a message and I’lI call them back. If I continue to get phone calls from an unknown number, I’ll look it up on the web. It’s almost always a bogus call. By following these simple steps, I never get into it with ones of these scammers.

    by Carole — April 5, 2015

  9. I am a computer technician and when I told that to the “windows caller” and said I was happy to hear what was wrong with my computer, he hung up on me! I still have so many customers who do not understand that they are not so special to get phone calls from Microsoft. Just hang up.

    We also are using NEXTDOOR in our community. It seems to be working really well…neighbors recommend their favorite service providers, alert neighbors to possible crime/theft, lost dogs, free things to give away or classifieds. It is basically an electronic bulletin board for a community. It is free. The only caution is to keep information factual, realize that your opinion is yours and not a good place to slander, keep it positive. You can get a ton of emails unless you change your settings to limit such.

    by LJ — April 5, 2015

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