How to Avoid Fraud and Abuse

How to Avoid Fraud and Abuse

Tips for Avoiding Fraud

It’s sad, but seniors are increasingly targets of fraud and financial abuse. A recent study by Consumer Action, a consumer advocacy group, found that about 30% of fraud victims are 60 or over.

When you combine boomers living longer with traditional pension plans declining and questions about whether social security will even be viable in 20 years, you have an environment ripe for people to become victims of financial fraud and abuse.

Elder fraud, as defined by, is “an act targeting older adults in which attempts are made to deceive with promises of goods, services, or financial benefits that do not exist, were never intended to be provided, or were misrepresented.”

It doesn’t come as a surprise that seniors are looking for ways to increase their retirement funds. Several of my friends have wondered, only half jokingly, if their money will run out before their life runs out.

I don’t know about you, but I receive invitations to “free lunch” or “free dinner” financial seminars about 4-6 times a year. They are tempting, particularly because they’re generally held at an upscale restaurant.

I’m sure you’re aware that the sole purpose of these seminars is to sell financial products to the attendees. I was sorely tempted to attend one or two until I found out about the FINRA (Financial Industry Regulatory Authority) study into these seminars.

FINRA regulators studied over 100 of these “educational” seminars in areas of the country that have large populations of seniors. They found that 57% of the firms used “advertising and sales material that may have been misleading or exaggerated or included seemingly unwarranted claims, and that 23% involved recommendations that seniors invest in unsuitable investment products.”

To find out more, and to educate yourself about these seminars, visit either FINRA or US Securities and Exchange Commission and search for investor alerts.

Unfortunately, senior fraud and abuse is not just the province of the financial industry. It runs rampant in virtually every industry that does business with seniors.

The following is a partial list of people and situations to be wary of.


Telemarketers are notorious for trying to scam people — particularly seniors. Even if you’ve put your telephone numbers into the Do Not Call registry, telemarketers seem to find ways around the system.

My Dad gave me a great piece of advice years ago. He said that when someone calls and asks, “Who is this?” instead of responding with your name, ask the person, “Who’s calling and whom do you wish to speak to?” That way, you haven’t given up any information about yourself.

If you do speak to a telemarketer, before you consider doing business make sure you get the person’s name, telephone number, name of the business he/she works for, the business telephone number, address of the business and business license number.

Don’t impulse buy, and don’t be swayed by someone who says, “This offer is only good for today.” Take your time and verify the information the person gave you.

Medicare-Covered Products

One of the other major scams dishonest people try to pull over on seniors involves Medicare. This is the usual scenario: you get a call from a salesperson who says they can sell you an item that will be paid for by Medicare. If that happens, it would be wise for you to call Medicare to verify that they will, indeed, pay for the product before you give the salesperson your Medicare number. As above, the best course is also to verify the salesperson’s business information.

Speaking of Medicare, it’s a good idea to check your statements when you get them to make sure you’re only being billed for services actually rendered. If you suspect anything involving Medicare, call 1-800-medicare to report it.


A lot of baby boomers have been in their home for many years. That generally means that repairs are going to have to be made. And that means having to hire contractors or home repair people. Unfortunately, this is an industry that is ripe for fraud and you need to be aware.

Before I have work done in my home, there are several websites I check to find contractors. One is a fee paid member based site, Angie’s List. The remainder are free to search: Thumbtack, Home Advisor and 1 800 Contractor. All of these sites have reviews from people who have used the contractor’s services. And just to be on the safe side, I also check the Better Business Bureau to see if the contractor is listed and how they’re rated.

Before I have any work done in my home, I always get at least three quotes. That way I can compare apples to apples when it comes to price and what’s being offered.

Buying Large Items

If you’re going to make a purchase in a store, it pays to not only visit at least 2-3 stores, but also check the item you want to buy online. If you’re more comfortable purchasing after you’ve actually seen the item, take a friend with you who can offer you a different perspective.

I’ve also found that most stores will deal with you, for example, if you see the same dishwasher in two stores and they’re about the same price, you can dicker with the salesperson regarding the warranty, delivery, etc. which will ultimately bring the price down.

Keeping Yourself Safe

Here are some general tips to protect yourself in any situation:

  1. The most important thing you can do is become a well-educated consumer. I usually try to find contractors/repair people before I’m in an emergency situation.
  2. Read all purchase agreements, bills of sale or contracts before signing — and that means every word. Make sure you know what the store’s policy is regarding returns, repairs, warranties, etc.
  3. Make sure you know what the contractor’s policy is regarding repairs down the road to work they’ve done and what they do to make sure you’re happy with the work you contracted them for. I usually set milestones for payment and I never pay for an entire job upfront.
  4. Don’t allow yourself to be pressured into buying something you’ll regret later. The best thing you can do is walk away and give yourself a day or two to think about the purchase.

If you think you’ve been the victim of fraud or abuse, talk to someone you trust. Believe me, you’re not alone. Here are some resources you can turn to for help. It’s a good idea to have their numbers on a piece of paper somewhere near your phone:

  1. Your local police.
  2. Your bank, if you think the fraud has been financial.
  3. The Adult Protective Services for your area. You can find their information by calling ElderCare at 1-800-677-1116 or going to their website, Elder Care.

And finally, nothing makes you feel more secure than being an educated consumer. Whatever you’re looking to purchase, repair, etc., you can generally find in-depth information about it online.