Latest Consumer Protection Data Spotlight Finds Seniors Sending Thousands in Cash to Scammers Claiming to be their Grandchildren
Older consumers who report losing money to fraud are reporting a disturbing trend: Scammers claiming to be a loved one in trouble are getting people 70 and over to send thousands of dollars in cash.
In the second Consumer Protection Data Spotlight, the Federal Trade Commission examined complaints about family and friend imposter scams. These scammers often call seniors claiming to be a grandchild. The FTC is seeing an increase in the number of people ages 70 and over who say they sent cash in response to this particular scam – one in four said they mailed cash in 2018, compared to one in fourteen the prior year. In about half of these types of complaints, the scammer said they were in jail or some other legal trouble and in need of money to get out of trouble.
All age groups reported losing more money over the last 12 months to family and friend imposter scams – a total of $41 million, compared to $26 million the previous year. The most striking concern is individual losses by older Americans. The median loss for this scam was $2,000, but when seniors ages 70 and over said they put cash in the mail, their median loss was $9,000.
The FTC urges those who might get such a call to not act right away. Instead, the FTC recommends calling the family member or friend using a known number, or checking out the request with someone else in their family or a mutual friend.
The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357).
CONTACT FOR CONSUMERS:
Consumer Response Center
I have had a number of very unhappy consumer victims of scams where they received very convincing calls from someone with an authoritative voice who told them that they were going to be arrested/audited/exposed as a liar/cheat/unfit parent/tax fraud unless they went to Apple (or Google or Wal-Mart) and bought gift cards and gave the codes from the cards to the person calling.
It's easy for you and I to sit back and say "That's an obvious scam" but it's not obvious sometimes, when you're tired and don't expect someone to call and threaten you. Once your amygdala fear response kicks in, your reasoning declines dramatically.
So just remember -- just like money never calls you on the phone, only scammers demand payment in gift card codes.
Never buy a gift card because someone threatened you! (Unless it's your wife.)
Scammers demand gift cards | Consumer Information
The short answer to "How do criminals steal from the elderly?" is "by phone, mostly."
And new phone-based payment services that let you send money to others without even leaving your house make it crucial that you remember this key survival rule:
MONEY NEVER CALLS YOU ON THE PHONE.
And if you think you've found the exception to this rule, call an attorney or a trusted friend with good sense to discuss the offer before you do ANYTHING that the caller suggests. If you have truly found the exception to the rule, it'll wait for you to conduct a thorough investigation.
If you feel ANY pressure to seize the opportunity at all, that's the clearest sign of all that it's a SCAM.
Remember, the phone and internet means just one thing for sure:
Every criminal in the entire world is just one click or phonecall away from you.
In years past, you pretty much only did business with people nearby; now you can be ripped off by someone from a country you can't even pronounce just as easily as by someone who calls you from a boiler-room scam operation in your own hometown.
How Criminal Steal $37 billion a year from the elderly
Remember -- you have EVERY RIGHT to take the paperwork home from a car dealer so you can get help reading and understanding it at your leisure before you sign!
A car salesman who says "I can't hold this car for you if you leave" is a liar trying to pressure you into signing on the dotted line without having help reviewing the contract.
FTC press release:
Not all dealers play by the rules. In a case announced today, the FTC alleges that Tate’s Auto Center of Winslow, Inc. — as well as related dealerships in Arizona and New Mexico and their owner and manager, Richard Berry --
* used deceptive advertising to get people in the door,
* failed to disclose required financing terms, and
* frequently falsified consumers’ income and down payment information in an effort to close the deal.
Instead of using the income information people gave, Tate’s often inflated numbers to make it look like people had higher monthly incomes.
Note the ways to tell this is phony -- the "Noreply" email is misspelled, and the "simply call us at" phone number is bogus.
The most important tip, though, is to ALWAYS look at the sender id: firstname.lastname@example.org is NOT Netflix.
Legit businesses do NOT send this kind of thing.
If you were to click on those links, you'd be taken to a very convincing phony website that would collect your attempts to log in, which would capture your actual netflix login and username.
It helps that I don't have a Netflix account, but it's important to recognize all spearfishing attacks.
These scammers trying to pry your personal information out of you by making it appear that they're from the government.
On this one, note the barely readable small print disclosure that they're not, which is at the bottom and is about 1/20th as dark as the typeface that says "GOVERNMENT FUNDS AVAILABLE FOR FINAL EXPENSES" that appears at the top, next to the Pennsylvania Avenue address in Washington DC ( a nice touch, don't you think?)
Note the deceptive wording of the interior:
The government has made funds available for final expenses. Also available in your state, is a program designed to pay for what the government funds do not pay for your final expenses. If you qualify, this program can pay 100% of all funeral and final expenses for each person covered.
The comma after in your state is a nice touch for illiteracy.
Note the attempts to make it seem to come from a government source
The folks who prey on the elderly -- the Elderscammers -- never tire of trying to make their scam letters appear to come from an official source (anything that will get you to open them). When you get mail in an envelope that looks like this, your best bet is probably to recycle it immediately without even opening it.
If you are really torqued about their deceptive technique and want to make it a bit more expensive for them, here's one thing you can do: Open the envelope, but only so that you can find out if there is a postage-prepaid "Business Reply Envelope" inside (there often are). If there is a BRE, take a dark marker and write "STOP SENDING ME JUNK" on the reply card, and draw a big X over the part where they want you to give them all your personal information. Then stuff everything they sent you into the BRE, seal it, and drop it in the mail. This has proven remarkably effective at getting them to stop sending me any such junk. Sadly, all my elderly neighbors and friends keep me well supplied in examples of this kind of scam. (This one was another come-on for funeral expenses insurance, the biggest ripoff this side of waterline insurance plans.)
Mixed in with the many honest businesses, I'm sad to say that there are a TON of ethically challenged businesses out there too. They especially prey on elders, offering them outrageously overpriced goods and services, using all the time-tested tricks of the trade, trying to make it look like they are doing you a favor, and that you might have to "qualify" to do business with them -- when the only qualification is excessive trust in strangers by you, and a willingness to give out private information to total strangers. These people will use any information they can get to take advantage of you (and they will sell and trade that information to similarly exploitation-minded outfits -- along with the key fact, that you were so foolish as to respond to their mailing).
There's a good saying that "Good deals don't call you on the telephone" and the same goes in spades for junk mail like this. Honest businesses don't try to make money off you by selling you wildly overpriced insurance. I wish there was a way to require outfits like this to put a skull-and-crossbones watermark on every page of every letter they send out, because then you'd have a chance of realizing what pirates they are.
Take special notice of how this works: you get a very official looking email from "Service@paypal.com" --
And that address (Service@paypal.com) is all that appears in the email reader.
It's only when you right-click on it to make it reveal the full address is the bogus actual address (peypal.com) revealed ... and some folks would miss the shift anyway (peypal vs. paypal). "Phishing" is where the scammer doesn't steal your information directly -- rather, the scammer "fishes" for information in such a way as to lure you into GIVING it to him/her. Don't fall for it!
Remember, simple online safety rule #1:
Observe the same safety precautions online as you do on the telephone.
Just as you would never give out personal information to someone who called you (RIGHT??), you should never give account information about yourself or your digital world to anyone who initiated the contact with you, particularly through an email.
I'm skeptical of any bright-line rule that says that a nonprofit is no good because it spends too great a percentage of its revenue on administrative overhead. In fact, what I tend to see is the exact opposite: nonprofits that starve their administrative side in an effort to please the raters, which only sets them up for terrible problems of the gravest sort, including embezzlement, failure to find or retain good people, employment and wage claims, etc. The bottom line is that nonprofits are small businesses, and running small businesses is not easy, especially newer and smaller ones. So bright-line cutoffs are usually to be taken with a big grain of salt.
Ok, that said, here are some outfits that require a charitable interpretation of the word "charity" just to be considered as one. In other words, these aren't close -- these are the stinkers that cause good nonprofits such problems, because when the public gets a whiff of these stinkers, all nonprofits get a bad name. The best thing to do with this list is check it before you write your end-of-year gift checks -- and make sure you avoid these outfits. I'll just give the top three -- download the full list of 20 below.
Organization Average Annual Percent Spent
Expenditures Charitable Cause
Law Enforcement Education Program $2,299,994 2.7%
Shiloh International Ministries $846,340 3.2%
La Verne, CA
Research Organization $783,217 4.2%
(I'm pleased to note that there are no Oregon nonprofits among this "Worst 20" list, although sad to see several in Everett, Washington.)
John Gear is a Salem attorney in solo practice