Fraud and the Elderly
You see it all too often -- another elderly person swindled out of their life savings by a fast talking con artist or fallen prey to a scheme to increase income. Senior citizens are especially vulnerable to consumer fraud. They are generally more trusting of others. Since most live on fixed incomes, they are often looking for ways to extend their limited dollars. The elderly can be easily confused by too many facts or figures. They may be led to think an enticing offer means something different than it really does. Often victims may not be able to remember important details about the fraud or event or even the person who cheated them. Finally, like all of us, they hate to admit they have made a serious mistake --- especially to their children or other family members. It is often viewed as another sign they are getting old, need more help, and maybe can't live alone anymore.
Consumer fraud is when consumers actually lose money due to illegal practices when con artists profit. Other fraud may involve deception and sales tactics which mislead or pressure consumers into buying goods or services which they don't really need.
The areas of fraud where consumers are more vulnerable are health, telemarketing, mail order, investments, credit card fraud, credit repair, insurance, home improvement, home maintenance and auto repair. Con artists frequently contact potential victims at home, either in person, by phone or by mail. Once a contact is make, con artists try a variety of techniques to get money. Scare techniques are used to convince a person of some impending disaster, such as a dangerous furnace or leaky roof.
In fact, home repair schemes take millions of consumer dollars each year. How can you avoid becoming a victim of home repair?
- Beware of door-to-door contractors who use high-pressure or scare tactics to get you to make an immediate decision
- DON'T do business with someone who comes to your door offering a bargain because he says he has materials left over from another job
- It is always a good idea to get three opinions and estimates for any home repairs. DON'T always go with the lowest bidder. Most of the complaints to the DA's office are for contractors with very low bids. You get what you pay for.
- Don't pay money in advance. Some smaller contractors may ask for money to pay for supplies, but you should pay no more than 25% up front, then pay the balance ONLY when you are satisfied with the complete job.
- Ask the contractor to show you proof that he is bonded, carries liability insurance, and covers his workers with workman's compensation insurance.
- Does the contractor have a business card with a verifiable street address and office phone number? Be cautious of P.O. boxes and answering machines/pagers only. CHECK the information!
- Call the Better Business Bureau for a report on the contractor. A BBB report will tell you if the contractor has a "satisfactory" or "unsatisfactory" record based on consumer complaints.
- Require the contractor to use a written contract that lists materials to be used, as well as charges and costs, and the completion date.
- DON'T make final payment until you have received a "lien waiver" that shows the contractor has paid his subcontractors and suppliers. Unpaid workers or vendors could put a lien on your home. If you sell or refinance, they will take their payment out of your equity.
- NEVER, NEVER GIVE A STRANGER INFORMATION SUCH AS A SOCIAL SECURITY NUMBER, BANK ACCOUNT OR CREDIT CARD INFORMATION.
- DO NOT WITHDRAW MONEY FROM YOUR BANK ACCOUNT AT THE SUGGESTION OF A STRANGER.
- Avoid any deal which pressures you into making an immediate decision. THERE IS NEVER A LEGITIMATE DEAL THAT YOU DON'T HAVE TIME TO THINK OVER OR SEEK OPINIONS FROM OTHERS. Request that written information be sent about any investment, sweepstakes, or charity that has solicited you by telephone.
- Be suspicious of bargains, free offers and investment opportunities which come unsolicited by mail, telephone, or the internet. DON'T EXPECT SOMETHING FOR NOTHING!
- Hang up or close the door on high pressure salespeople. Remember that the "nice guy" approach is a way to convince you to let down your defenses.
- Don't be pressured into making a down payment as guarantee of your good faith. Often the con artist just takes the money and runs.
- Don't be sworn to secrecy about a deal. This only delays the chances of a fraud being discovered and legal action taken.
- Be wary of credibility claims which convince you that the con artist has some special expertise and authority. TAKE TIME TO VERIFY ANY OFFICIAL LOOKING LETTERS OR CERTIFICATES.
- NEVER SIGN A CONTRACT WITH BLANK LINES/SPACES. If you are told you don't need to read the small print, or the rest of the information will be filled in after you sign, be wary. You will probably end up with a legal form that requires you to pay more than you intended. Also, never sign something you don't understand fully.
- DON'T pay fees to collect a prize or sweepstakes. Scam operators usually ask that these fees be sent by overnight delivery or Western Union so they can get your money before you have time to change your mind. YOU NEVER HAVE TO PAY TO COLLECT A PRIZE FOR A LEGITIMATE SWEEPSTAKES.
- NEVER give credit card or bank account numbers to someone you do not know. Make sure any credit card transactions you initiate are accurate and that you haven't allowed unauthorized access to account numbers.
- Notify law enforcement agencies, the district attorney's office and the Better Business Bureau if you become suspicious of anyone.
- If you paid a potential scam operator by check, stop payment immediately.
- If a bank account or credit card number was involved, notify the financial institution.
- Save all evidence until it can be turned over to the responsible enforcement agency. Write down any information about the fraud such as details abut the offer, conversations and descriptions of people or vehicles.
Luann Boyer, MS CFCS A. William Ritter, JR.
Colorado State University Cooperative Extension Agent Denver District Attorny, Economic Crime Unit