Beware of Financial Exploitation

Fraud and Financial Scams

Each year thousands of Americans across the country, from all walks of life, lose millions of dollars to identity theft, fraud, financial exploitation and financial scams. Especially vulnerable are elderly senior citizens that may need greater assistance in their everyday life.

Although this is not an exhaustive list, the following are some of the more common perpetrated frauds and financial scams to be aware of:

Power of Attorney Fraud. The perpetrator obtains a Limited or Special Power of Attorney, which specifies that a legal right is given to manage a variety of assets, from real estate, to pensions, to funds in savings or investment accounts. Once the rights are given, the perpetrator uses the funds for personal gain.

Telemarketing and mail fraud: Here perpetrators use telemarketing or mail solicitation to convince a person to buy something with little or no value, make a bad investment, or contribute to a nonexistent charity.

Advance Fee Fraud or “419” Nigerian Fraud. This type of fraud involves a multitude of schemes and scams – mail, e-mail, fax and telephone promises that the victims will receive a percentage of money for their assistance in the financial scheme proposed in the various types of correspondence.

Pigeon Drop. The perpetrator asks the victim to put up “good faith” money in the false hope of sharing the proceeds of an apparently large sum of cash or item(s) of worth which are “found” in the presence of the victim.

Inheritance Scams. Victims receive mail from an “estate locator” or “research specialist” purporting an unclaimed inheritance or refund of abandoned property. The victim is lured into sending or wiring money to receive information about how to obtain the purported asset.

International Lottery Fraud. Scam operators use telephone and direct mail to notify victims that they have won an “International Lottery”. To show good faith, the perpetrator may send the victim a check with instructions to deposit the check, which is counterfeit,and immediately send (via wire) the money back to the lottery committee. The victim is also instructed to send extra funds to pay taxes, attorney’s fees, and exchange rate differences in order to receive the rest of the prize. These lottery solicitations violate U.S. law, which prohibits the cross-border sale or purchase of lottery tickets by phone or mail.

Fake Prizes. A perpetrator claims the victim has won a nonexistent prize and either asks the person to send a check to pay the taxes or obtains the credit card or checking account number from the victim to pay for shipping and handling charges.

Internet Sales or Online Auction Fraud. The perpetrator agrees to buy an item for sale over the Internet or in an online auction and sends a counterfeit official check via overnight mail. When the check arrives, it is several hundred or even thousands of dollars more than the agreed-upon selling price. The seller is instructed to deposit the check and refund the overpayment. When the official check is later returned as a counterfeit, the seller is left with a loss of both the merchandise and money.

Government Grant Scams. Victims are called with the claim that the government has chosen their family to receive a grant. In order to receive the money, victims must provide their checking account number and/or other personal information.

Spoofing. An unauthorized website mimics a legitimate website for the purpose of deceiving consumers. Consumers visiting the site are asked to log in, thereby providing the perpetrator with authentication information that the perpetrator can use at the victim’s legitimate financial institution’s website to perform unauthorized transactions.

Phishing/Vishing/Smishing. Technology or social engineering is used to entice victims to supply personal, non-public information (account numbers, login Ids, passwords, and other verifiable information) that can then be exploited for fraudulent purposes, including identity theft. These scams are most often perpetrated through mass e-mails, spoofed websites, phone calls or text messages.

Home-repair and other such scams: Most often seniors are targeted by door-to-door salesmen who will start work without permission or outright lie about the need for work to be done. They also often cheat on the cost of materials and labor. Bill collection on these jobs is often very aggressive. This is also used for other types of work such as repairing appliances and automobiles.