The economic recession should make all consumers more aware of the multitude of scams and schemes designed to defraud.

The cautionary advice goes for seniors in particular, an AARP spokeswoman says.

“We’re not seeing a rash or increase of older people being victimized, but generally, seniors are more likely to be targeted in these scams,” says Luci deHaan, an AARP specialist in financial fraud.

Criminals tend to follow the money. That holds true for con artists, deHaan says.

“What we really find is the people who are more financially secure, those are the people being targeted by scam artists,” she says.

Some schemes center around persuading people to access their life savings for quick returns on shady investments.

Other seniors are drawing on money for everyday spending they should be saving for later in life.

“What we’re seeing is some people who are staring to take money out of 401k’s and IRAs and stop saving,” she says. “What we’re advising now is not to make rash decisions and have a plan in place and consult with financial advisers qualified to help you manage your finances.”
Get-rich-quick schemes rarely work, she adds.

DeHaan says seniors should be wary of Internet solicitations, known as “phishing.” Such scams can take the form of a communication from a supposedly legitimate financial institution requesting personal information so records can be updated. The same con can be done over the phone.

“It’s just a way to get their personal information,” deHaan says. “The first time you receive [contacts] like that, contact your bank first.”

She advises seniors to be wary of the “free lunch” seminars often advertised in newspapers and other media that lure people into situations where they are pressured to participate in questionable investment plans.
“That’s probably another area where people need to be careful to ask questions of a financial professional,”

DeHaan says. “They invite you there because they want you to buy their product. They’re pitched as a very soft-sell and when you have your lunch it becomes a very hard-sell. The key is not to make any commitments when you are there.”

DeHaan offered familiar advice: “The old saying is if it looks too good to be true, it probably is. There is no such thing as a free lunch and there is no such thing as a free dinner,” she says.

The FBI says older Americans are more likely to have a nest-egg, own their own home or have excellent credit, all financial sources a con man will try to tap into. Those who perpetrate fraud will focus their efforts “on the segment of the population most likely to be in a financial position to buy something,” according to the agency.

As they plan for retirement, seniors can fall victim to investment scams. Some of the more common are advance fee schemes, pyramid schemes, and Nigerian letter fraud schemes.

“People need to rid themselves of this notion of who the quintessential victim is for an investment scam. It’s often not the person living alone. It’s normally somebody who is financially savvy and considers themselves knowledgeable about their financial affairs,” deHaan says.

The fact that most people brought up in the 1930s, 1940s and 1950s “were generally raised to be polite and trusting” can work against them when up against a dishonest person, the FBI says.

“The con-man will exploit these traits knowing that it is difficult or impossible for these individuals to just say ‘no’ or hang up the phone,” according to the agency.

The FBI advises people to be aware of a range of schemes, including funeral and cemetery fraud, fraudulent “anti-aging” products, Internet fraud and telemarketing fraud.

Telemarketing scam artists often target people age 60 and older by trying to sell them bogus products or services by phone. Older women living alone are special targets of the scam artists, according to the FBI. Telemarketing scams often involve offers of prizes, low-cost vitamins and health care products and travel offers.

Warning signs include promises of “free” or “low cost” vacations or get-rich-quick schemes. Many scam artists try to pressure the person on the other end of the line to act immediately, send money or provide a bank account number in order to receive a gift, vacation or prize.

It’s difficult to get your money back if you’ve been cheated over the phone. The FBI offers the following tips to avoid telemarketing fraud.

• Don’t buy from an unfamiliar company. Legitimate businesses understand a person may want more information about their company and will readily comply.

• Always ask for written material and wait until it is received before acting on any offer or charity solicitation. If you get brochures about costly investments, ask someone whose financial advice you trust to review them. Not everything in writing is true.

• Always check out unfamiliar companies with your local consumer protection agency, the Better Business Bureau, state Attorney General, the National Fraud Information Center or other watchdog groups.

• Obtain a salesperson’s name, business identity, telephone number, street address, mailing address and business license number before making a transaction. Verify the accuracy of the information.

• Before giving money to a charity or make an investment, find out what percentage of the money is paid in commissions and what percentage actually goes to the charity or investment.

• Always take your time making a decision. Legitimate companies won’t pressure you to make a snap decision.

• Never send money or give out personal information such as credit card numbers and expiration dates, bank account numbers, birth date or social security numbers to unfamiliar companies or unknown persons.
Many people, particularly senior citizens, are reluctant to report they have been the victim of a fraud scheme.
“Very often, they are not reported,” deHaan says.

Other scams that target seniors identified by the FBI fall into the category of health insurance fraud.
Included on the list is medical equipment fraud, Medicare fraud, services that are billed but not performed and “rolling lab” schemes that involve unnecessary and sometime fake tests given to individuals at health clubs, retirement homes or shopping malls and billed to insurance companies or Medicare.

The FBI offers the following tips to avoid health insurance fraud:

• Never sign blank insurance claim forms.

• Never give blank authorization to a medical provider to bill for services rendered.

• Ask you medical providers what they will charge and what you will be expected to pay out-of-pocket.

• Carefully review your insurer’s explanation of the benefits statement. Call your insurer and provider if you have questions.

• Do not do business with door-to-door or telephone salespeople who tell you that services or medical equipment are free.

• Give your insurance/Medicare identification only to those who have provided you with medical services.

• Keep accurate records of all health care appointments.

• Know if your physician ordered equipment for you.
The FBI also advises seniors to be on guard against counterfeit prescription drugs. It asks consumers to:

• Be mindful of appearance and closely examine the packaging and lot numbers of prescription drugs. Be alert of any changes from one prescription to the next.

• Consult your pharmacist or physician if your prescription drug looks suspicious.

• Alert your pharmacist and physician immediately if you medication causes adverse side effects or if your condition does not improve.

• Use caution when purchasing drugs on the Internet. Do not purchase medications from unlicensed online distributors or those who sell medications without a prescription, Reputable online pharmacies will have a seal of approval called the Verified Internet Pharmacy Practice Site (VIPPS), provided by the Association of Boards of Pharmacy in the U.S.

The bottom line in avoiding becoming a scam victim, deHaan says, is to remain vigilant.

“We’re advising people not to make rash decisions and if they are very worried (about personal finances) put together a plan and contact an expert. Get informed, learn about your portfolio and don’t be afraid to ask for help,” she says.

By Ken Little

Warm weather means home improvement scams in Central New York, but there are effective ways to avoid becoming a victim, say those familiar with the situation.

Seniors are often the targets of fly-by-night contractors offering to perform cut-rate roofing work, painting, driveway sealing or remodeling jobs. Unscrupulous operators do substandard work or simply move on once they pocket a victim’s money. It’s a scenario repeated every year across the country once spring and summer arrive.

“It’s the prime time because people are trying to get work done on their house,” said Sgt. Tom Connellan, of the Syracuse Police Department’s Criminal Investigations Division. Be wary if someone knocks on your door and offers to do home improvements, Connellan advises. “A lot of them are traveling scam artists who will give you a hard sell,” he said. “They will give you a low price and a lot of these guys will insist you pay in advance. If somebody’s going door-to-door you should be very skeptical.”

Seniors are more likely to live in older homes that need repairs and are less likely to do the work themselves, said Bill Ferris, AARP’s New York state legislative representative. “A lot of older persons are rehabilitating their homes because they want to remain in their homes as long as possible,” Ferris said. “Fly-by-night operators come by and say, ‘I’ve got extra material and I can do your roof’ or ‘I can do your driveway.’ Never trust anyone who comes by and says they have extra material and they can do the job cheaply.”

A homeowner looking to hire a contractor “needs to know they are reliable and that they have an established business in the area,” said Peggy Penders, a spokeswoman for the Better Business Bureau. “They certainly should look for a reliable contactor,” Penders said. “They should ask for references and they really do need to do their homework as well.”

The BBB can be of assistance in finding a reputable contractor. The organization offers a free online service called “Request-A-Bid” that allows homeowners to write a brief description of the work they need done and can then review bids from BBB-affiliated contractors. More information is available on the organization’s Web site: bbb.org

“The other thing the Better Business Bureau advises is not to pay by cash and to make sure the home improvement they are embarking on is done by stages of payment. If the contractor asks for money up front that’s an immediate red flag,” Penders said.

The homeowner rate among Americans over age 65 is about 80 percent, Ferris said. And more than 26 million homeowners make improvements every year. He recommended getting at least three estimates from contractors, along with references. “One thing people don’t do is ask where they buy their materials and go there and ask [suppliers]. They can be used for a reference,” he said. “Ask their bank.”

Connellan, Pender and Ferris strongly advise not agreeing to any work unless there is a signed contract that specifies what will be done and when it will be completed. Connellan added that it’s also not a good idea to let someone soliciting work past the front door. “People should be very wary of letting strangers in the home,” he said. “We’re asking seniors if they get approached by someone like this to have someone else like a neighbor sit down with the guy.”

Many older homeowners have lived in the same location for years and know others in the community.
“Go with contractors you are familiar with. Ask your neighbors, family and friends who they have used,” Ferris said.

Here are some tips from the Better Business Bureau about how to find the right contractor for the job:

• Compare costs before making a financial commitment toward any home improvement project. Solicit at least two or three bids from prospective contractors based on the same building specifications, materials, labor and time needed to complete the project.

• Never let a contractor use pressure tactics to force a snap decision. A reputable professional recognizes individuals need time to consider all the factors involved before hiring a contractor.

• Consumers should hire a contractor with an established business in their area. Ask for references and do some homework. Look at the BBB Reliability Report available on the BBB Web site at bbb.org

• Research a contractor’s standard of work and his professional affiliations. Verify his insurance and check to see if he needs to be licensed.

• Don’t allow work to start without a signed written contract that includes all verbal promises made by the contractor. Make sure the contractor includes a start and completion date, a breakdown of the cost and information about the contractor, including license number, street address and telephone number.

• Refuse and become suspicious if asked to pay for the entire job up-front. Arrange for payment to be made as parts of the job are completed. Final payment should not be due until the job is done to the customer’s satisfaction. Homeowners should pay by check or credit card, never by cash.