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Common Senior Financial Scams

by Chris Cooper, Financial Planning Expert
July 03, 2015

Question: I am always worried my mother who stays alone will fall prey to a financial scam. Can you give me examples of some common scams that I can discuss with her to make her aware?

Answer: This is how I ended up on the NBC’s Today show back in 1997, talking about financial scams and the isolated elderly. Telephone solicitors are always calling elderly persons because these solicitors know that most elders live alone and do not have anyone that they can ask about something when the solicitor calls. Also, because elders can be very lonely living alone, they can easily be manipulated by the solicitor “buddy-ing up” to the lonely elder. 
Phone scams include the “grandchild” calling from jail needing money to get bail out or some other such story.  The phone rings in the middle of the night and the caller says “grandma” (or “grandpa”) and the elder being sleepy says “Jason” or “Jennifer” thinking it is one of their grandchildren calling.  Then the caller repeats the name the elder just uttered “yes grandma it’s Jason”.  And so you see how this scam starts.
Others involve the IRS – imposters calling your parent saying they are from the IRS and that they are collecting taxes that your parent owes (which is the scam, the IRS never calls anyone, they mail letters through the United States Postal Service.) This one is recent and I have had two client over the age of 70 tell me about these calls in February of this year while it was cold, snowy, and below zero outside in most of the USA.
But a far bigger scam involves your mother’s financial “advisor”. Here, the “advisor” is a sales person from an insurance company or securities broker/dealer your mom has business with and tells mom that he needs to see her about one of her investments (or insurance policies).  While the sales person is in the home of your elder, he/she has your mom sign forms she does not understand and causes transactions to happen with her money, generating commissions for the sales person. These transactions are never in your parent’s best interest!
This type of financial advisor abuse became  classified as a felony called Financial Elder Abuse in the state of California, but the other 49 states have done nothing about this problem (the insurance industry’s lobby is very large in some states.) Here, you should inform your mom not to sign anything until you or someone disinterested in the transaction reviews it. (This can cause friction with your parent as it makes them feel they can’t handle their affairs. Tell mom, this can happen to you, too, if you don’t read everything you sign and fail to have a disinterested third party review things before YOU sign things, too!)
These are only four common scams, and there are more!

Chris Cooper is the owner and founder of Chris Cooper & Company, Inc., a fee-only financial planning firm for elderly persons and the owner and founder of ElderCare Advocates, Inc. a private geriatric care management and long term care consulting firm. As a California Licensed Professional Fiduciary, Chris can serve as  Conservator of the Person and Estate under court appointment,  as Agent under a Durable Power of Attorney for Financial matters and Health Care matters.

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