The following article is from the American Association of Daily Money Managers (AADMM).
Fraud takes an enormous financial, as well as emotional, toll on victims. It can destroy businesses and ruin financial lives. Many individuals, businesses, and organizations are affected by scams and other fraudulent activity on a daily basis. A report in the American Journal of Public Health estimates that 1 in every 18 older adults experience some form of fraud or scam each year. Often, they are too embarrassed to report it or don’t know where to go to do so. With the complexity of ongoing identity schemes, the number of victims impacted are on the rise. According to the Insurance Information Institute , the amount stolen was $16.8 billion last year alone, an increase of 12 percent from 2016.
To assist with recognizing and avoiding fraud, the American Association of Daily Money Managers (AADMM) has developed a list of common scams that are becoming more prevalent each year. Here is information on three of these scams.
FUNERAL/CEMETERY SCAMS
Some funeral homes may try to take advantage of a grieving family by trying to sell them products they do not need or by adding fees for additional services that they don’t really want. Examples may be attempts to sell them an expensive fancy casket, convincing them to get embalming prior to cremation (almost never required) or selling a rubber gasket to preserve a body (they do not work).
The “Funeral Rule,” passed in 1984 and which is overseen by the Federal Trade Commission, sets forth certain guidelines that funeral homes must abide by. These include rules that the funeral home must itemize their prices, offer products individually (although they may offer package deals), and allow a family to bring in caskets from third party vendors (such as Walmart or Costco). Even with these rules, some funeral homes are unscrupulous and violate them. Read more.
TELEMARKETING/PHONE SCAMS
Many older adults enjoy talking on the phone. It’s a great opportunity to communicate with family members, friends and acquaintances. However, the telephone is also widely used by scammers to prey on unsuspecting individuals, especially seniors, who are often the victim of these fake telemarketing calls.
Scammers will say anything to cheat people out of their money. Some may appear to be very friendly — using your first name, making small talk, or asking about your family. If you receive a call from someone saying that you’ve won money in a sweepstakes or contest you haven’t entered, but you just need to send money to claim your prize, be aware this is probably a scam. Contests and prize scams are on the rise. These fraudsters are difficult to catch because there is no paper trail and the calls cannot be traced. Read More.
INVESTMENT/PONZI SCHEMES
Seniors and other vulnerable populations are often targeted by investment fraudsters. Common scams include:
- Ponzi schemes in which early investors are paid with the assets of later investors
- Bogus promissory notes
- Offshore market instruments
- Oil and gas investments
- “Risk free” investments
If you encounter any of these situations, first and foremost, talk with trusted advisors or family members before making any investment decisions. Take time making investment decisions and verify that sellers are licensed and registered to sell products by visiting investor.gov or your state securities regulator. If you do not know the state securities regulator, visit nasaa.org or call 202-737-0900. Read more.
Here are some additional tips and resources to prevent fraud and identity theft. Click here to download a full copy of this article.
Daily Money Managers (DMMs) can help protect their clients by acting as a first line of defense against fraud. Using their experience in financial matters to monitor and recognize suspicious activity, they help prevent their clients from falling victim to various scams. In the event that fraud is detected, DMMs can also work with clients toward resolving the issue. To find a DMM, please visit AADMM.com.
The American Association of Daily Money Managers (AADMM) is a national membership organization representing individuals and businesses in the growing profession of daily money management. These professionals provide financial services to seniors and older adults, people with disabilities, busy professionals, high net worth individuals, small businesses and others. AADMM’s mission is to support daily money management services in an ethical manner, to provide information and education to members and the public, and to develop a network of dedicated professionals. Click here to learn more about AADMM.
This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice. Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.
