courtesy of NAELA News
By Steven J.J. Weisman, Esq.
What are some common scams that seniors can fall prey to and how can we help our clients?
Millions of older Americans are targeted as victims of scams and identity theft each year at a cost estimated to be $2.9 billion1 and this figure is undoubtedly smaller than the actual figure as older scam victims are less likely to report being a victim of a scam.2
Why Are Seniors So Much More Likely to Be Targeted for Scams?
To some extent, it may reflect the thinking exemplified by bank robber Willie Sutton who when asked why he robbed banks responded, “because that is where the money is.” So it is with many seniors who may have a lifetime of accumulated savings that provide a tempting target for scammers.
It has been thought that seniors might be more susceptible to scams due to being more trusting and two studies may have found a physiological basis for that opinion. A study by researchers at Cornell University published in the Journals of Gerontology concluded that naturally occurring changes in the brains of older people make them vulnerable to financial exploitation. The changes noted were in a part of the brain that alerts us when facing a risky situation as well as another part of the brain that controls the ability to read social cues.3
This deterioration of the brain can be and is exploited by scam artists, the only criminals we refer to as artists, who often appear to have a knowledge of psychology that Freud would have envied.
An earlier study done by researchers at the University of Iowa also found naturally occurring changes in the prefrontal cortex of the brain in the elderly that make older people less skeptical and therefore more likely to be victimized by a scam.4
In early 2018, Attorney General Jeff Sessions announced the largest coordinated sweep of elder fraud cases in history involving more than 250 defendants from around the world who victimized more than a million mostly elderly Americans at a cost of more than $500 million. The charges encompassed a wide variety of scams including telemarketing fraud, investment fraud, lottery scams, the grandparent scams, romance scams, IRS imposter scams, and identity theft.
Scams and Social Security
Social Security presents a launching area for a wide variety of scams targeting seniors. When the Social Security Administration (SSA) announced a 2 percent cost-of-living adjustment (COLA) beginning in January 2018, scam artists promptly called unwary seniors posing as representatives of SSA telling their intended victims that in order to receive their cost-of-living adjustment, they would need to confirm personal information including their name, birth date, and Social Security number.
As we know, this information is not required to be provided or confirmed for a person to receive their automatic cost-of-living adjustment to their benefits. Providing them to a scammer over the phone only leads to the senior becoming a victim of identity theft. Making the problem worse is the fact that scammers can use a technique called “spoofing” to manipulate their victim’s Caller ID so that the call appears to come from SSA.
The truth is that whenever you receive a telephone call, you can never be sure as to who is really calling and therefore we should teach our clients never to provide personal information over the phone to anyone who calls them unless they are absolutely sure that the call is legitimate and the information must be provided.
Another Social Security scam relates to the SSA’s helpful My Social Security Account online service, which allows you to set up a personal online account with the SSA that enables you to view your earnings history and estimates of benefits as well as manage your benefits online including changing your address or starting or changing direct electronic deposits of your benefit check into a bank account you may designate. This is a tremendously convenient service, but it also provides a great opportunity for scammers who have been setting up My Social Security Accounts on behalf of seniors who have not already set up such accounts for themselves. The scammers then make changes to the victim’s account by directing their benefit checks be sent to bank accounts controlled by the scammers. Even though the SSA requires verification of personal information by asking questions that only the Social Security recipient should know as part of the process for opening a My Social Security Account, too often this information is available to a determined identity thief who is thereby able to fraudulently open an account in the name of their intended victim.
In order to improve the security of the My Social Security Accounts program, the SSA is now requiring people to use dual factor authentication to access their accounts once they have been initially set up. At the user’s option, the dual factor authentication is done by the SSA sending a one-time code either to the user’s email or cell phone. Using an email address for dual factor authentication may prove to be problematic because it is not particularly difficult for a sophisticated hacker to gain access to someone’s email account. Even having the one-time code being sent to the senior’s cell phone can be risky when the scammer uses a technique called “porting” to have the victim’s SIM card transferred to a phone controlled by the scammer thereby having the one-time code sent to the phone of the scammer.
The best defense against this type of fraud is to set up a My Social Security Account for the senior with a strong username and password. For information about signing up for a My Social Security Account, go to https://ssa.gov/myaccount/. It is also helpful in setting up the account to require that any changes in the bank account into which the benefits check is electronically deposited only be done at a Social Security Administration branch office rather than through the online account.
Other Types of Senior Scams
The most common scams involving seniors are IRS impersonation scams, phony lottery scams, robocalls, tech support scams, grandparent scams, romance scams, and government benefit scams. Also, scams related to computer use by seniors are increasingly common. Educating seniors about these scams and how to avoid them is essential. Unfortunately, the limitations of this short article do not permit me to go into detail about how to avoid these scams.
Phony lottery scams, particularly the infamous Jamaican Lottery do, however, merit some mention. To a great extent these scams have targeted seniors. The scam begins with a telephone call from the scammer telling the targeted victim that he or she has won a lottery worth millions of dollars. The scammers convince the victims into paying huge amounts of money as administrative fees or taxes in order to claim their prize. Of course, there is no prize and the victims end up with nothing. While income taxes are owed on lottery winnings, no legitimate lottery ever collects the income taxes on behalf of the IRS; they either deduct the taxes from the prize or leave the matter of taxes entirely up to the lottery winner. Also, no legitimate lottery requires any kind of administrative fee in order to claim a prize.
Finally, the simple rule to remember is that it is very hard to win a legitimate lottery for which you have bought a ticket. It is impossible to win a lottery you have not entered.
Just Do the Best You Can
Presently I am a professor at Bentley University, but before that I taught in the Massachusetts state prison system where I met a student who was serving two consecutive life sentences, which meant that when he died he would start his second sentence. He told me that when he received his sentence, he yelled at the judge, “How do you expect me to do two consecutive life sentences?” to which the judge replied, “Just do the best you can.” And so it is with us. Nothing can totally protect our clients from becoming victims of identity theft or scams, but we can do the best we can to help them avoid these problems.
1 AARP. AARP Poll: Nearly One in Five Americans Report They’ve Been Victimized by Fraud.Washington, D.C: 1999. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3916958/#R2.
2 Pak K., Shadel D. AARP Foundation National Fraud Victim Study. Washington DC: 2011.
3 R. Nathan Spreng, et al., Financial Exploitation Is Associated With Structural and Functional Brain Differences in Healthy Older Adults, 72 The Journals of Gerontology: Series a, 1365–1368, (2017), https://doi.org/10.1093/gerona/glx051.
4 Erik Asp, et al., A neuropsychological test of belief and doubt: damage to ventromedial prefrontal cortex increases credulity for misleading advertising, frontiers in Neuroscience, July 9, 2012, https://www.frontiersin.org/articles/10.3389/fnins.2012.00100/full#h4.
About the Author
Steven J.J. Weisman, Esq., is a professor at Bentley University, and Of Counsel to Margolis and Bloom in Boston, Mass.