Seniors and retirees are squarely in the crosshairs of financial scammers. If you aren’t careful, you could fall into a scammer’s trap and lose hundreds, thousands, or even tens of thousands of dollars. In some cases, seniors have lost the majority or even all of their life savings to such criminals.
Being victimized by a scammer is more common than most people think. These criminals take advantage of seniors who are oftentimes lonely, desperate for human interaction, out of the loop, and ultimately quite vulnerable to scammers.
If you are worried about protecting your nest egg, a CERTIFIED FINANCIAL PLANNER™ Professional can help you create a financial plan that safeguards your hard-earned money.
Without further ado, let’s take a quick look at the top five financial scams every Libertyville, IL senior citizen should be aware of:
1. Bank Inspector Scams
This scam zeroes in on older individuals, most of whom have what is often referred to as a public spirit. As most seniors know, older individuals tend to be more community-oriented and altruistic than the comparably self-interested younger generations. The bank inspector scam has become so common that it was highlighted in a Dragnet episode. Here’s how it works. A criminal pretends he or she is a bank inspector, analyzing bank fraud at a senior citizen’s bank or credit union. The scammer calls the senior citizen, asking him or her for assistance with the investigation. This request involves the senior withdrawing a considerable amount of money.
As soon as the money is withdrawn and it is given to the fake inspector as “evidence”, this criminal vanishes with the victim’s money. The senior believes he or she did the right thing by withdrawing money to facilitate the investigation of bank fraud only to later realize the entire thing was a scam. However, by this point, the victimized senior might be so embarrassed that he or she simply keeps the fraud a secret rather than letting anyone know about the unfortunate incident.
2. The Magazine Subscription Scam
The magazine subscription scam has countless victims, of all ages and other demographics yet seniors are particularly vulnerable to this swindle. The scam is centered on sending seniors a magazine at no cost for three months. Once this free trial ends, the phone calls begin. The caller introduces him or herself as an employee at the magazine’s financial department, stating the subscription is at or near its end date. The scammer states the senior or senior couple have received the magazine at no charge throughout the prior three months. The offer’s language states today is the deadline.
The scammer then requests that the target provide his or her credit card to guarantee the magazine is delivered in a timely manner. However, the truth is the recipient of the magazine does not owe any money. Sadly, the scam works more often than most assume as some seniors struggle with memory loss that leads them to believe they actually ordered a magazine subscription.
The bottom line is plenty of seniors will pay for continued magazine delivery service assuming they ordered the subscription months ago, even if they don’t want it. Seniors should respond to such a call stating they did not place the order and will not pay for the magazine delivery or any other service.
3. The Home Repair Scam
The home repair scam now occurs offline and on the internet. Seniors are vulnerable to this scam as they tend to be lonely and/or cognitively impaired. Sadly, most seniors live alone and will engage in a discussion with just about anyone, even a shady salesman. Scammers seize the opportunity to engage lonely seniors in conversation, contacting them by phone or online, stating the item they ordered arrived and it is time for the installation team to add it to the home. The item in question tends to be an air conditioning system, furnace, or another home-related item.
The scammer requests the senior’s credit card to process the payment and perform the installation. This scam proves effective as people are willing to pay for items to prevent embarrassment. Some seniors will simply assume they forgot they ordered the item in question and pay the money as requested.
4. Uncollected Debt Scammers
This scam occurs after a senior’s spouse passes away. Criminals really are going as far as searching through obituaries to pinpoint widows and widowers. These targets are then called by the scammer who states the decedent failed to pay thousands of dollars of debt. The scam artists proceed to threaten the widow or widower with legal action, eviction, or publicizing the unpaid debt unless it is paid right away. Plenty of seniors will pay the supposed unpaid debt simply because they would rather part ways with money than be embarrassed.
5. Financial Advisor Fraudsters
Though it might be hard to believe, the truth is scammers are willing to go to the extent of posing as financial advisors in an attempt to pilfer money from senior citizens. The overarching aim of this despicable act is to gain access to the senior citizen’s retirement accounts, savings, investments, and other money. Once the funds are accessed, the scammer takes the money and disappears.
Seniors are targeted by phony financial advisors as they have a lifetime of savings and also because they are often in cognitive decline. However, Libertyville and Lake Country, IL seniors should not immediately discredit the idea of working with a financial advisor simply because such a scam exists. Perform your due diligence by checking into the background of the financial advisor you are considering doing business with to ensure he or she is legitimate.
The moral of this story is if you are a senior, it is in your interest to work with a CERTIFIED FINANCIAL PLANNER™ Professional with a track record of success to ensure you have the right financial plan and estate plan in place.
At Prism Planning Partners, we are CERTIFIED FINANCIAL PLANNER ™️ Professionals committed to facilitating important questions so that we can help you explore all of your opportunities. We offer a broad array of financial planning and consulting services for our clients-including retirement, investment, and estate planning.
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