'Tis the Season
By Gaylene Schweitzer, VP / Compliance Officer - Scott Valley Bank
When fall is in the air and winter just around the corner, our focus turns inwardly toward family, friends and the needs of others. ‘Tis the Season when warmth, joy, love and grace fill the center of our thoughts. ‘Tis the Season when we strive to find the best within ourselves. ‘Tis the Season when we strive to find the best in others. ‘Tis the Season when our excitement distracts us from the reality that identity thieves and scam artists use our good will to their benefit.
‘Tis the Season to be reminded that just as we are filled with the goodwill of the holiday season, fraudsters are seizing the opportunity to increase their illicit activities. Articles begin to appear in our newspapers, frequently visited Internet sites and on the radio reminding us to be vigilant as we move through our holiday activities and to take extra precautions to protect our personal and financial information.
‘Tis the Season when we should pause and be reminded that our seniors are the most vulnerable group among us and more likely to be victimized. The complexities of the financial scams that surface during the holiday season are magnified for seniors because the Medicare open enrollment period begins on October 15th and concludes on December 7th. During this period seniors are inundated with information about changes to Medicare, prescription drug coverage options and supplemental insurance coverage options for the coming year. It becomes effortless for fraudsters to integrate their scams into the process. They quickly adapt and customize scams to whatever is happening in the news. This year, they are seizing upon the conflicting information in the news regarding the impact of the Affordable Care Act on benefits.
The fraud and financial scams being used to victimize seniors ranges from legitimate activities where seniors are targeted for excessive numbers of sweepstakes offers, magazine subscriptions or charitable requests to more complex scams that focus on senior issues such as reverse mortgages, Medicare Fraud and credit card fraud. The scams described below have been selected for their prominence and because many of them have touched one or more members of my family, circle of friends or acquaintances.
It is important for each of us to be aware of the issues facing our seniors and to take time to educate them about the reality of frauds and scams so they will be able to protect themselves from being victimized. Talk to seniors, direct them to resources that focus on their needs and be aware of friends and family members who could be vulnerable.
Health Care Fraud
Seniors are being targeted by telephone, mail, and via the Internet to verify or provide their Medicare and Social Security information. Deceptive sales practices are coercing seniors to purchase more costly insurance services or services with no value or limited value. Identity thieves are using Medicare as a cover to steal the identities of our seniors and gain access to their financial information.
Fraudsters quickly leveraged the implementation of the Affordable Care Act as a new opportunity to exploit seniors who are confused about the complexities of the law and how it could impact their Medicare, prescription drug, and supplemental insurance coverage. Many seniors have received erroneous letters stating that their current supplemental insurance coverage will be cancelled by their provider due to provisions in the Affordable Care Act and they will need to purchase a new policy. Fraudsters are using this scam to obtain personal and financial information or to sell a policy that may not be legitimate or appropriate.
Tips for Avoiding Health Care Fraud
- Carefully review all insurance-related information received in the mail, never sign any document until you have spoken with your insurance provider, family member or other trusted advisor.
- Contact your insurance agent before making any changes to your coverage.
- Do not do business with door-to-door, telephone or Internet insurance providers.
- Never respond to a caller, email request or mail solicitation asking you to provide or verify your Medicare, Social Security or other personal information.
- Never provide credit card or bank account information in response to an email request or solicitation by mail or telephone.
- Do not be misled by a caller or email that purports to be from a “governmental agency”.
- Medicare should not be contacting you to verify your coverage, information on your Medicare card or bank account information.
Prescription Drug Fraud
Seniors struggling to survive on a fixed income are using the Internet with greater frequency to search for lower prices on their prescription medications. Many fraudsters are using the Internet to reach out and sell products to this vulnerable population that may be ineffective, harmful or not medication at all.
Seniors looking for options to lower their prescription drug costs are susceptible to solicitations to join cooperatives, discount clubs or discounted drug programs that will save them up to 50% or more on their prescription drugs. These programs typically require the senior to pay a membership fee that can be charged to a credit card or drafted from a bank account. When the enrollment has been completed, the membership fee drafted from an account or charged to a credit card, medications never arrive or the costly specialized prescription drugs are not covered by the program.
Tips for Avoiding Prescription Drug Fraud
- If you are struggling to pay for prescription drugs check with Medicare and state programs to determine if you qualify for low income assistance.
- Check with your local pharmacy to determine if they have a program available that could save you money.
- Check with the pharmaceutical company that manufactures your specific prescription drug to determine if they have a financial assistance program available.
- Consult your physician to determine if a generic or less costly drug may be available.
- Consult your physician, a family member or trusted advisor for guidance before purchasing or taking prescription drugs via the Internet.
- Consult a family member or trusted advisor before joining a discounted drug program.
- Be wary of “miracle drug” or “secret formula” advertisements.
- Don’t be afraid to ask questions.
- Be aware of products that carry “trusted endorsements” or are guaranteed safe from side effects.
- Contact the Better Business Bureau before making a purchase.
Seniors make twice as many purchases over the telephone than the national average. Fraudulent telemarketers target between 56 to 80 percent of their calls to seniors. Seniors are typically more eager for someone to talk to and often answer questions to avoid the appearance of being rude to the caller. When personal or financial information is provided or money sent in response to a telemarketing call, the senior increases his or her chances of being victimized.
Common telemarketing scams involve notification that the senior has won a free prize or vacation, received an inheritance from a distant relative, is offered an investment that will be available for a limited time, reverse mortgage, debt counseling and consolidation, insurance products or other financial products, or solicitations on behalf of charities.
Telemarketers use high-pressure sales tactics to obtain credit card or bank account information using statements such as “act now, or you can’t afford to miss this offer, or I have other clients waiting if you are not interested.”
Tips to Avoid Telemarketing Fraud
Ask the caller to send you written information about the company, product, service or investment they are selling.
Always discuss a telephone solicitation with a family member or trusted advisor before making a decision and providing personal or financial information.
Check out unfamiliar companies, ask the caller for his or her name, telephone number and address so you can verify the accuracy of the information provided.
Ask questions about the nature of a charity before making a contribution.
Don’t pay in advance for any services.
Do not agree to permit the company to send a messenger to your home to collect payment.
Always discuss a telephone solicitation with a family member or trusted advisor.
Ask questions and never respond to pressure. Legitimate companies will be willing to provide you with written materials and time to review them before making a decision.
Just say “no thank you” or “I am not interested” and hang up.
Add your name and telephone number to the National “Do Not Call” Registry.
Seniors struggling to survive on a fixed income are particularly susceptible to being victimized by lottery scams. Scammers typically contact the senior by telephone or email to inform that they have won a lottery or sweepstakes and need only to send enough money to cover the taxes and processing fees to claim their prize. The victim sends the requested funds by Western Union, Money Order or a prepaid card and the scammer simultaneously sends the fraudulent lottery check. By the time the check is returned to the victim’s bank as fraudulent, the scammer has received payment for the erroneous fees and taxes and is nowhere to be found.
Tips to Avoid Lottery Scams
If you did not enter a lottery, you did not win a lottery.
Never send money to collect money.
If you receive a lottery check and are instructed to remit a portion back to the sender, the check is fraudulent.
Always discuss the call with a family member or trusted advisor.
Never provide the caller with personal or financial information.
Do not yield to pressure.
In 2012, the Federal Trade Commission (FTC) received 83,000 complaints from victims of the Grandparent’s Scam. The FTC reported that the number of complaints were up 4% from the previous year and 8% over a two-year period. The Grandparent’s Scam involves a fraudster who exploits the love and trusting nature of a grandparent by impersonating a grandchild in distress.
Fraudsters typically source their victims from obituaries, social networking sites, by hacking into email accounts and by using purchased marketing lists. Some fraudsters conduct a significant amount of research about their intended victim’s family and friends and others merely dial the telephone number and structure their call to elicit the information necessary to make the conversation sound legitimate. Calls are typically made late at night to catch the victim by surprise and to add a greater sense of urgency to the conversation. The fraudster purporting to be the victim’s grandchild claims that they have an unexpected emergency and are in need of money. Typical scenarios involve accidents, incarceration or being stranded in a foreign country. The fraudster asks that the money to be sent by Western Union or Moneygram and then pleads with grandma (or grandpa) not to tell mom and dad to maintain the secrecy of the call.
Tips to Avoid the Grandparent’s Scam
Never wire money through money transfer services to people you don’t know, regardless of how convincing their story may be.
Call a phone number for your family member that you know to be genuine. Verify the story with someone else in your family, even if you have been asked to keep it a secret.
If you have caller ID services and do not recognize the caller’s telephone number, do not answer the call.
Add your name and telephone number to the National “Do Not Call” Registry to help prevent the call from coming into your home.
‘Tis the Season to be joyful and ‘Tis the Season to look out for each other.