The Latest Scams Circulating the Consumer World. Be warned. Be informed.
August 2005
Senior Scams
Seniors are vulnerable and unsuspecting victims of numerous scams and frauds.
One scam targets elderly women living in retirement homes who may have dementia. The criminals calls and asks, Hi Grandma, it's your grandson. I've been in an accident. Can you wire me money so I can fix my car? Western Union does not require identification for wire transfers of $1,000 or less, making it impossible to find the crook after he runs away with the stolen money.
Another scam involves predatory lending at its worst. Mortgage brokers or lenders search their databases for the names & address of older Americans who don't owe a mortgage on their home. The crooked lender befriends the senior couple with several pleasant visits about their life and finances. By the third visit, the crooked lender closes the deal by offering the homeowners a check that allows them some spending freedom.
When the homeowners endorse the check, they enter into a contractually-binding, rip-off loan with a monthly payment and high interest rates. If the homeowners can't make the payments, the salesperson may 'flip' the loan for a second loan with even higher interest rates. When the homeowner is unable to make any payments, the crooked lender forecloses and takes the home away from the once mortgage-free senior couple.
A variation of the predatory lending scam involves a salesperson convincing seniors that their house has structural damage. With paperwork in-hand, the predatory lenders sign homeowners up for new loans with high interest rates and penalties. These high-interest and penalty loans quickly rob senior homeowners of equity and in the worst-case scenario, results in foreclosure.
Play it Safe
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If you are a senior, don't make any major changes to your finances without consulting an independent, no-commission advisor or trusted friend/ relative.
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If you know a senior, i.e. a parent or grandparent, warn them about these scams and offer to help when crooked lenders come knocking at the door or calling on the telephone.
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