4 Scams That Target Boomers
How to recognize and avoid these common frauds
(This article previously appeared on MarketWatch.)
If Willie Sutton were alive today, he would probably skip banks and head straight for older Americans and their retirement savings. Because for scammers, “That’s where the money is.”
While there is some question whether Sutton, a prominent bank robber in the mid-20th century, actually said those infamous words, there’s little doubt that households approaching, and already in, retirement control much of the wealth in the U.S. As such, they and their nest eggs increasingly are targets of financial fraud.
The first step: Don’t assume that because of your education or supposed business savvy, financial fraud can’t happen to you, says Doug Shadel, a former fraud investigator and now the state director for AARP in Washington.
Indeed, such schemes usually have nothing to do with intelligence or greed, he says. “The general strategy for scamming seniors … is to get them emotionally excited about something and not thinking clearly,” Shadel explains.
In the email, the “grandchild” claims to be stuck overseas or in jail and says he or she needs money wired as quickly as possible. Notably, the email also includes a request not to tell the grandchild’s parents. Shadel says many grandparents think, “There’s nothing I wouldn’t do for a grandchild, and I’ll ask questions later.”
Here are three other frequent frauds:
1. Medicare discount-drug card fraud. Con artists will call, email or even knock on doors selling fake discount cards for drugs. (Legitimate prescription-drug benefit companies can’t make such unsolicited sales pitches.) Often, scammers are seeking personal data that they can use for identity theft.
3. Magazine subscription and sweepstakes pitches. The pitch is the same, whether through email or old-fashioned mailers: If you wish to collect a “free” prize, buy magazines or send money now, or the offer will expire.
Even some well-known brands have been accused of this kind of fraud. Publishers Clearinghouse, for example, has over the years been the subject of legal action by state regulators and is currently being probed by a congressional committee for sending out sweepstakes entries that regulators say are misleading. (A company spokeswoman told Lauricella: “We believe our programs are in full compliance with all applicable laws, and we work closely with law enforcement and regulators on any concerns they have.”)
Glenn Ruffenach is News Editor at The Wall Street Journal, responsible for the Journal’s coverage of retirement finances and retirement planning.