Financial scams run rampant, but the elderly are particularly vulnerable. In this podcast, we discuss some common scams and what to look out for so that you and any seniors you know stay protected.
Welcome to the CredAbility [now Clearpoint Credit Counseling Solutions] Podcast, with your host, Mechel Glass. Here’s Steve Moore to kick off today’s discussion on the various financial scams aimed at seniors.
Steve: Well, Mechel, sad to say in today’s economy, there are always people out there looking to take advantage of other people, and often folks are looking to take advantage of seniors. And there are scams that are run in the senior population, and today you’re going to shed some light on a few of those.
Mechel: Yeah, there are a few that I want to talk about today that are real prevalent in the news. One of them is called a Ponzi scheme. If someone calls you up, and they tell you to make an investment in a certain type of thing, and they’re promising you a much higher rate of return than what’s normally offered, that’s something you should be worried about. Those are traditionally Ponzi schemes. And what’s happening is, the investors are taking that money and not really investing it. They’re using it to pay previous investors.
Steve: This is really what the Bernie Madoff thing was all about.
Mechel: Yep, that’s what that was about. There were no investments actually taking place. Money was being pooled together and then given to previous investors, so that the returns that they were getting were all fictitious. It was all make believe.
Steve: So if anybody calls or contacts and you and promises you, guarantees you, a 10, 12 15% investment, a red flag should go up at that point.
Mechel: A definite red flag should go up, and you should not give this person your money.
Steve: What other scams and schemes should we keep an eye out for?
Mechel: Telephone scams are another thing that I want to talk about. Many high pressure sales tactics may be deployed on our seniors, because they are friendly, and maybe they don’t want to hang up on the person, and they want to listen to what they have to say, but they should be wary that they don’t feel that they’re trapped, and that they have to accept what the person is selling over the phone. And if they feel themselves feeling pressured, they should just hang up the phone. Don’t fall victim to that.
Steve: Okay. What else?
Mechel: Some other things are the door-to-door sales. Again, our seniors may be at home, so salesmen will come to the door trying to sell them things. Now, I’m not talking about high dollar amount things- may be even magazines, or candies, or other things that the senior may not necessarily need. Someone will come to the door. They don’t want to be unpleasant to them. They don’t want to tell them “No, I’m not interested.” Or even if they do tell them they’re not interested, the person still tries to deploy a high pressure sales tactic, letting them know “Oh, it’s only $20 or $30, or it’s only this much a month.” You should not feel in any way that you have to purchase from someone that comes to your door. Feel free to close the door, and tell them “I’m not interested,” and go back to doing what you were doing.
Steve: One thing we see a lot is home repair scams at the door. “I was just driving by. Could I clean your gutters? I was just driving by. It seems like your roof needs to be repaired.” Things like that from unlicensed repair people. And again, they can often take advantage of senior citizens.
Mechel: That is a big scam, where they will ask them “Could I do this work for you?” and demand the money upfront. And then, when they’re supposed to come back to do the work, nobody shows up. And the senior is out of their money. So that is definitely something that seniors should be aware of. And don’t feel pressured. If someone comes to your door, and they want to do work on your home, they should be licensed, they should have references, and you should check those references. Don’t feel pressured that you have to give them money upfront. Many people don’t operate that way. They do the work first, and then they are paid.
Steve: Good advice. Thanks, Mechel.
Mechel: Thank you.