How-to Guides

It's an unfortunate fact that as you get older, you may also become a more attractive target for con artists. Retirees and preretirees may be more likely than younger people to have investments, own a home, and maintain a good credit rating -- all of which appeal to criminals. Taking steps to thwart them may help you preserve the assets you have worked a lifetime to accumulate.
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Certain forms of fraud, such as identity theft or credit card theft, can victimize people of any age. But other schemes are designed specifically with older people in mind. You may want to be aware of the following:

Medicare fraud -- Manufacturers may offer free medical products in exchange for a consumer's Medicare number. A criminal can use the number to complete a form, obtain certification from an unauthorized doctor, and bill Medicare for reimbursement.
What You Can Do: Never sign incomplete insurance forms or provide blanket authorization to a medical provider to bill for services. Carefully review benefit statements from insurance companies and call with any questions.

Identity theft -- According to the Federal Trade Commission (FTC), more than one third of recent complaints made by consumers aged 50 and older related to identity theft. Credit card fraud was the most common form of identity theft complaint, followed by bank fraud and phone or utilities fraud.
What You Can Do: Shred bills, receipts, and other forms containing personal information before tossing. When shopping online, look for evidence that a merchant provides encryption or other forms of Internet security. Check your credit report for errors -- you may obtain a free credit report once a year from each of the three reporting agencies at www.annualcreditreport.com.

Telemarketing fraud -- Dishonest telemarketers often maintain lists of their most likely victims and a sizeable majority of the names are people aged 50 and older. Common tactics may include asking for Social Security or bank account numbers over the phone, pressuring you to make an immediate purchase, and offering phony prizes.
What You Can Do: Do not purchase anything over the phone unless you initiate the contact. Sign up for the FTC's National Do Not Call Registry (www.donotcall.gov) to reduce unwanted calls.

Family fraud -- Unscrupulous relatives may try to convince an older family member to give them legal authority to manage the family member's financial affairs. Relatives may spend money, sell assets, and leave the family member impoverished.
What You Can Do: Retain control of your assets as long as you are able to manage them. If it becomes necessary for a child or other heir to step in, create an accountability system where your designee reports periodically to your attorney or someone else.

Investment fraud -- Dishonest sales people may try to convince retirees to make investments that are not appropriate given their risk tolerance and time horizon. Warning signs may include offers from people who are not licensed to sell securities, guarantees of high returns, or unregistered investments.
What You Can Do: Avoid promises of high returns or so-called risk-free investments. Contact the federal Securities and Exchange Commission or the National Association of Securities Dealers to find out whether investment professionals are properly licensed.
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Prevention and follow-up can help you avoid being ripped off. The North American Securities Administrators Association, Inc. provides these tips for senior citizens.

1. Don't be a "courtesy victim." Scam artists often target people with good manners. Be on your guard with strangers or anyone looking for your money.
2. Take the time to research sizeable purchases. Decline offers from people who pressure you for an immediate decision.
3. Stay in charge of your money. Resist appeals from people who want you to leave everything in their hands.
4. Don't be fooled by a professional appearance. Criminals often know how to win someone's trust.
5. Watch out for salespeople who prey on your fears. Don't invest or make purchases because you are afraid of running out of money or experiencing a costly illness.
6. Don't make rash decisions following a tragedy. Con artists may prey on individuals who have lost a spouse or received an insurance settlement. If you find yourself in this situation, take the time to learn the basics of investing and how you can find a qualified financial advisor to work with you.
7. Monitor your investments and ask tough questions. Demand a routine statement of your accounts. Responsible professionals are willing to hold themselves accountable.
8. Be suspicious if you have trouble retrieving your principal or cashing out profits. Although some investments have restrictions on withdrawals, you must be told about this before making a purchase.
9. Report fraud or abuse to the authorities. More than half of elderly victims of identity theft do not report their experience to the police. Yet this hesitation to admit being victimized gives a criminal time to scam someone else.
10. Beware of reload scams. Don't give a con artist more money if he or she wants to make up for funds that have been lost.

While most people are honest, many criminals may be on the lookout for senior citizens, especially those who are affluent. Knowing what to recognize in con artists can help you stay on the lookout for them and avoid being scammed.
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