Be aware of financial scams against the elderly

Researched and drafted by Joseph Simmons, ABA Insurance Services intern

Financial fraud against the elderly is a very prominent issue. A recent study by MetLife Mature Market Institute estimated financial loss from abuses to be at least $2.6 billion a year. Some of the more common scams are the “grandparent” scam (the scammer claims to be a grandchild in trouble–while traveling in another country–and needs you to send money immediately to post bail, pay a fine, buy a ticket, etc.), investment or reverse mortgage schemes, bogus sweepstakes/lotteries and health care fraud. Knowledge of current scams and how to avoid them are essential to seniors in preventing or stopping financial fraud. Consider sharing some of the following tips from the FBI with your elderly customers:

  • Never sign blank forms or give blanket authorization to any person or entity, especially those you do not trust or know for certain to be legitimate.
  • Be an informed buyer. Understand what the costs should be and research before paying fees.
  • Do not buy from an unfamiliar company–buy from only reliable sources. If a company is not one you have heard of, look into its legitimacy, including the company’s address.
  • Make sure you understand investment and assessment terms–know exactly what you are putting your money into.
  • Be leery of an agreement that allows you to own a home without a down payment.
  • Do not respond to ads/announcements or send money or checks to unsolicited sweepstakes/lotteries you did not enter.
  • Avoid the grandparent scam: verify the caller is actually your grandchild before sending or wiring money. Contact your grandchild, their parents or even siblings who can confirm their whereabouts and ensure they are safe.

Because seniors tend to do their banking in person and most likely have been doing so for years at the same branch, tellers typically know their customers and their banking patterns. They are the frontline in helping elderly customers combat fraud. According to “Elder Financial Abuse,” a summary issued by the American Bankers Association, advise your staff to be aware of warning signs and take simple steps to help customers safeguard personal information and protect them from potential financial abuse. Warning signs can include unusual account activity, unpaid bills or eviction notices, suspicious signatures, new “best friends,” and new powers of attorney or altered wills.

Any discussion relating to policy language and/or coverage requirements is non-exhaustive and provided for informational purposes only. For details on coverage provided by your specific policy, please refer to your policy.