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Fraud Abuse and the Elderly

February 22, 2016 | By More

elder-fraudWith the recent death of Harper Lee, the famous author of “To Kill a Mockingbird”, it was recalled that Lee herself had been a victim of financial elder abuse a few years earlier.

According to a lawsuit, Lee’s former publisher had “duped” Lee into signing over the copyright to the novel in 2007. Lee had become increasingly deaf in the last 15 years, her eyesight is failing, and she had lived in an assisted-living facility since suffering a stroke in 2007. When elder abuse happens to someone as famous as Harper Lee, it’s not surprising that a high percentage of telemarketing fraud victims are age 60 or older.

Khorshed Alam CPA of Alam Accountancy Corporation in San Jose, CA discusses why seniors are often targeted and the warning signs to watch for.

Khorshed: As we age, we tend to become more vulnerable to fraud. One study found that senior citizens, who make up 12% of the U.S. population, comprise 35% of fraud victims. Why are the elderly more susceptible to con-artists and hucksters?

  • Steady income: Social security benefits, pensions, 401(k) plans, veteran’s benefits, annuities – all are sources of income that scammers hope to divert to their personal bank accounts. When a senior gives out personal information over the phone, a con artist is one step closer to his or her goal.
  • Sizeable investments: That big nest egg places a target on the back of many elderly folks. Unfortunately, a lifetime of careful money management may be wiped out by the ploy of a fraudulent investment “advisor.” If an older person’s home is paid off, his or her residence often represents an inviting target for reverse mortgage scams and property tax ploys. Fraudsters have been known to convince elderly homeowners to relinquish title to their homes and, unfortunately, adult relatives of seniors are often the perpetrators of this type of abuse.
  • Upbringing: Having been raised in a more civil generation, seniors may find it difficult to “just hang up.” They may balk at the idea that some telemarketers are, in fact, hardened criminals who ought to be serving time in jail.
  • Not Internet Savvy: Pop-up advertisements selling everything from magazine subscriptions to virus protection can be a front for gathering a senior’s personal information. Elderly folks who haven’t been warned of the Internet’s dangers may be susceptible to identity theft.
  • Specialized Needs: Health insurance and medical fraud, while not exclusive to seniors, are often perpetrated on that segment of the population. Fake anti-aging products, inflated funeral and cemetery expenses, bogus pharmaceuticals, unlicensed caretaking services – all have been sold to trusting senior citizens.

If you have elderly parents or grandparents, be sure to educate them about fraud.

Contributed by Khorshed Alam – CPA, EA, MBA
Alam Accountancy Corporation is located in San Jose, California. For more information or to contact Khorshed Alam, visit http://www.alamcpatax.com

Article information should not be used exclusively to make legal, financial or tax decisions. Because laws and rules can change frequently, topics may not always be updated to reflect these changes or may not apply to your unique situation. It’s prudent to seek out the advice of a professional for your specific needs.

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Category: Personal Finance

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