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Tips Avoiding Senior Financial Scams

Posted Aug 26 2008 4:27pm

ABC News and USA Today report on the costs of caring for elderly parents.
Some good advice when warning aging relatives on senior fraud and scams that I read today:

A working family caregiver was shocked when she discovered that her 73-year-old mother gave away $300,000 to strangers who claimed she had won millions and simply needed to pay the taxes in order to collect the cash prize.

"My mom is a very, very strong, financially capable woman and has been all her life," Tanner said. "In my wildest dreams I would never imagine her to fall victim to a scam of this kind -- never."

It started with mailings and requests for small sums. Later, phone calls came -- four and five a day. The scammers knew her schedule, her accounts and even the very personal details of her life -- so much so that she'd end her conversations with them by saying, "I love you."

Finally, the bank called the working family caregiver. Her mother was trying to take out a home equity loan for $180,000, and the bank said she looked desperate.

Unfortunately, as in this case, the elderly are at great risk for financial scams. ABC News personal finance contributor Mellody Hobson answered questions and offered advice for seniors looking to protect their money.

What advice do you have for seniors to help avoid this from happening to them?

Hobson: According to the Federal Trade Commission, 80 percent of the victims of telemarketing scams are over the age of 65. Under no circumstances should you ever respond to a phone call or e-mail with any personal information. It is a good rule of thumb to ask for the caller's phone number and tell them you will call them back. Never respond to any solicitation that asks for a quid pro pro -- basically, for you to give them something in return for something. Legitimate financial organizations never operate this way.

More in a day or two, come back to get additional tips from Mellody Hobson!

Thank you, Carol @
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