Door-to-door scam artists have probably preyed on the elderly for longer than there have been doors to knock on. But the digital age has compounded such abuse, with strangers defrauding their elders with a flurry of "amazing" investments via Internet sites, emails, direct mailers, telemarketing calls and all manner of ads.
And that's not counting con games perpetrated by caregivers, scheming relatives or a new "sweetheart."
Elderly victims reported $2.9 billion in loss to fraudulent investments in 2009. That may be a low-ball figure. The National Center on Elderly Abuse still cites a 2000 finding that only 1 in 25 cases of elder financial abuse is ever reported, which suggests as many as 5 million seniors may be the targets of financial scams.
On June 18, U.S. Sen. Bob Casey, D-Pa., introduced the Senior Investor Protections Enhancement Act of 2013, which would impose higher penalties for fraudulent investments involving people 62 and older. At present, fines range from $5,000 to $100,000 for individuals and $50,000 to $500,000 for businesses found guilty of civil penalties. Under Mr. Casey's proposal, fines in civil suits would top out at $150,000 for individuals and $550,000 for businesses if the fraud involved seniors.
In Pennsylvania, which is among the states with the greatest percentage of senior citizens, the attorney general and several agencies supporting the elderly have taken steps to prevent such fraud. This edition of "Know Your Rights" offers a glimpse at some of the scams most frequently aimed at seniors and provides tips on how to avoid -- or help loved ones avoid -- getting lured in.
More complete information can be found in the 44-page "Consumer Reference Guide for Seniors: How to Avoid Scams and Fraud."
The friendly handyman
An unscrupulous contractor knocks on the door and, using high-pressure tactics, offers speedy home repairs or renovations at what seems like a fair price. He may request full payment up front and then neglect to finish the work. Or the contractor neglects to complete the work in a timely fashion. Or his team neglects to show up at all.
Your rights: Get a written contract. Under the Home Improvement Consumer Protection Act, or HICPA, contractors must register with the office of the attorney general and provide a written contract for home improvements of $500 or more. The contract must state the exact work to be completed, including a start and end date and the cost. The customer must have signed it before work can begin.
For jobs of more than $1,000, HICPA permits contractors to accept a deposit for one-third of the cost plus the cost of "special order materials." Anything more than that exceeds maximum deposit rules.
Remedies: To check if a contractor is registered with the attorney general's office, call the Home Improvement Consumer Information help line at 1-888-520-6680. To file a complaint, call the Bureau of Consumer Protection help line at 1-800-441-2555 or visit www.attorneygeneral.gov.
The bank examiner
A con artist phones, explaining he is a manager or examiner at a local bank. He asks if, being a good citizen, the scam victim would be willing to help catch a dishonest teller in the act of thieving. He asks the senior to withdraw cash from his account so the bank can track any missing serial numbers. The victim meets the "examiner," hands him the cash and the senior never hears about it again.
Remedies: Stop. Think it through. Avoid spur-of-the moment agreements with strangers. Do not withdraw funds at the request of strangers or new friends. If someone claims to be an official, verify the person's identity. And if you're still unsure, call the bank or law enforcement and explain what you're being asked to do.
The relative in distress
The con man phones an elderly person, having chosen the victim from a phone book because she has an old-fashioned sounding name. In a frantic voice -- or sometimes from a place with plenty of background noise -- the caller informs "grandma" that he has had an accident or gotten into trouble abroad and needs her to wire money right away. The caller then thanks "grandma," explains he's embarrassed and begs her not to tell anyone.
Remedies: If you're unsure about a caller, stall. Contact family members to verify if the call is legitimate. Never wire money based on a phone or email request unless you are sure.
The pricey funeral
A funeral home or cemetery tells a grieving senior that everything is taken care of for his spouse's funeral. When the bill arrives, it includes exorbitant expenses, which the surviving loved one was not informed of in advance. In other cases, a senior pays in advance for funeral costs, but later, the advance payment is nowhere on record.
Your rights: The Federal Trade Commission requires that funeral providers provide itemized price lists over the telephone. Goods and services may be listed a la carte so there are options from which to choose.
Pennsylvania's Future Interment Law calls for 70 percent of pre-payment for funeral plans, which must be escrowed in a Pennsylvania banking institution until the recipient's time of death. When making arrangements, be sure to get the name of the state bank where the 70 percent pre-payment will be escrowed.
The 'free' hearing exam
Vendors may offer a free exam and then pressure a senior with hearing loss into purchasing costly hearing aids before a physician has properly diagnosed the individual.
Your Rights: A registered hearing aid seller in Pennsylvania must tell you at the outset that any examination or claim they make is not given by a person licensed to practice medicine or give a medical opinion. It's a mandatory disclaimer all hearing aid sellers are supposed to abide by. Contract law also requires the seller to explain in writing if a hearing aid was used or reconditioned. The law mandates that no aids may be sold without a 30-day, money-back, written guarantee.
Remedies: Contact the Pennsylvania Department of Health's Hearing Aid Registration Program at 1-717-783-8078 to verify if your hearing aid seller and fitter are in compliance with Pennsylvania's Hearing Aid Sales Registration Law.
To file a complaint, call the office of attorney general, health care help line at 1-877-888-4877 or visit www.attorneygeneral.gov.
Bargain vacations, free prizes
A similar plot involves a telemarketing call, email, postcard or print ad touting a discount vacation. The caller avoids or breezes over details before the senior makes a credit card payment. Once the target receives the detailed information packet, she discovers restrictions and conditions that may make it more costly or impossible to complete the trip.
In other cases, victims receive a letter or email explaining that they have been chosen to win a vacation, car or other valuable prize. To collect, the victims must visit the fraudulent business, where a scam artist persuades them to sign a contract or purchase an item they never wanted in the first place. The prize is often of little value.
Remedies: Avoid phone, mail and Internet offers that sound "too good to be true." Never provide your credit card number or bank account information over the phone to a solicitor. Get full details in writing about vacation deals before you pay anything.
Do not let yourself be forced into a decision. This pressure is often the surest sign that you are dealing with a con artist.
To avoid such calls in the future, put your number on the federal "Do not call" registry, by calling 1-888-382-1222. You may also list your number on the Pennsylvania "Do not call" list at 1-888-777-3406, and to file a complaint, call the Bureau of Consumer Protection's help line at 1-800-441-2555 or visitwww.attorneygeneral.gov.
Fake charity solicitations
The victim receives solicitations in the mail in the form of glossy brochures for donations to fake charities and philanthropic efforts. Some seniors receive mail from agencies that claim to be affiliated with government agencies, offering special Medicare or disability discounts. Some even have fake government seals.
Remedies: For information on mail fraud, call the U.S. Postal Inspection Service at 1-800-372-8347 or your local postmaster. To check whether a charity is legitimate, call the Pennsylvania Department of State, Bureau of Charitable Organizations at 1-800-732-0999. To file a complaint, call the bureau's help line at 1-800-441-2555 or the Charitable Trusts & Organizations section at 1-717-783-2853 or visit www.attorneygeneral.gov.
The estate plan scare
A senior gets a call or a mailed invitation to a seminar or receives a home visit about setting up a living trust or annuity plan. The salesperson applies pressure and uses confusing legal terminology, stirring up the senior's fear that his assets will be tied up indefinitely or his estate will face heavy taxes if no living trust is in place.
The salesperson may persuade the senior to purchase a kit for several thousand dollars, which consists of standard forms that may or may not be valid, since living trust law varies from state to state.
Remedies: Be sure to have a trusted attorney or tax adviser involved in any estate planning or to help you review any plan before you pay for it. Avoid plans that market trusts and also sell annuities or other investments. And confirm a seller's government affiliation. Also, the Cooling-Off Rule mandates that if you purchase a living trust in your home or at a seminar, you have three business days to cancel the deal.
"Know Your Rights" explores your legal protections and rights in a broad range of everyday situations. If you have a topic you would like to see explained in Know Your Rights, contact freelance writer Gabrielle Banks: email@example.com.