Scams costing seniors billions, report says

(March 29, 2005) Scam artistry attracts some of the best and brightest talent. Frauds are becoming more sophisticated, and the largest growing group of people falling for those crimes are seniors, says CARP.

Fraud hurts victims regardless of their age, but seniors are particularly vulnerable and the consequences are especially dire since they have very little time or opportunity to recoup or rebuild their losses. “You lose not only your money, but your independence,” says Lillian Morgenthau, founder and president of CARP, Canada’s Association for the Fifty-Plus. “Seniors and older people have no way of pulling together what they’ve lost.”

The association today released its 2005 report and recommendations, entitled CARP’s fight against scams and frauds. According to the report, seniors make up 60% of those who lose money in telemarketing scams alone. Combined with other frauds and investment scams, the association estimates more than $2.5 billion a year, or 84% of the total dollar amount lost to fraud, is taken from people over age 60. And it is highly likely the numbers are an underestimate given that most seniors are embarrassed to admit they’ve been victimized.

Many even refuse to report the crimes to police. The organization tried to get someone to speak at a presentation this morning in Toronto, “but they don’t want to be known or acknowledged,” says Judy Cutler, CARP co-director, government and media relations. She says the organization gets calls from members every week who won’t give their names, won’t report the crime and won’t even tell their children. “This is only the tip of the iceberg,” she says.

To combat the growing number of fraud related crimes, the organization, in cooperation with the Competition Bureau and 40 other public, private, consumer and volunteer organizations, created Fraud Awareness month in February, developed television and radio advertising and sent out nearly 40-million bill inserts to advise people about fraud awareness.

CARP and Competition Bureau representatives suggest a two step approach to the problem. The first is to talk about the issue and actively spread awareness through a word of mouth campaign so people are better equipped to recognize potentially fraudulent claims. The second part of the effort is getting seniors to report crimes to the PhoneBusters national anti-fraud call centre initiative at 888-495-8501.

“Seniors are still a polite generation. I think we need to train them to be not so polite,” says Morgenthau. Hiding behind your door, she says, only makes it easier for scam artists to target the next person.

Advisors can help by putting together a list of things elderly clients should be looking out for.

For instance, seniors are most commonly taken in by aggressive hard sell phone calls, or calls from people claiming to be from the bank or a charity, but phony letterhead and in-person visits are also ways scammers target the elderly. The list of frauds that investigators have seen so far includes investment pitches, re-mortgaging schemes, stolen bank card PIN numbers, fraudulent traffic tickets and travel booking websites used to garner credit card numbers and other personal information. Sometimes scammers will also send a cheque to victims, telling them they’ve won a prize or settlement. A short time later someone will make contact, asking for half of the money back, saying they sent too much. Even “opportunities” like the Nigerian letter advance fee scam are still able to pull in some people.

Sally Southey, assistant commissioner at the communications branch of the Competition Bureau recommends advising people to shred papers with personal information on them, rather than simply recycling or throwing them away. She also suggests warning seniors to be careful about things like their PIN numbers, unconfirmed charity solicitations or aggressive phone calls.

“If something sounds too good to be true, chances are it’s a scam,” she says. “People think they’re doing their estate a favour — that they’re going to double its value. Instead they end up getting scammed and losing it all.”

Phonebusters brochures with a list of ways to recognize and deal with different con jobs are available for download by clicking here. CARP’s report and recommendations, including a list of top frauds aimed at Canadian seniors, is also available for download by clicking here.

Filed by Kate McCaffery Advisor.ca, kate.mccaffery@advisor.rogers.com