Seniors are prime targets for scammers. Many have amassed impressive financial resources, while many others are struggling with the challenges of living on a fixed income. Scammers often jump in to exploit this situation. Biggest rip-offs targeting seniors…


Rip-off: Unscrupulous insurance agents misrepresent Medicare policies.

Medicare beneficiaries have a bewildering array of health insurance options now. They can choose from dozens of “Part D” prescription drug plans to supplement Medicare, and they can opt out of traditional Medicare and enroll in private Medicare Advantage Plans for their medical and drug coverage. This is fertile territory for scam artists…

  • Medicare Advantage. To reap hefty commissions, some insurance agents push seniors into buying a type of private policy called a Medicare Advantage Plan without explaining the limitations of the plans. Examples: You may use only doctors and hospitals in the plan’s network… you may lose supplemental coverage from a former employer’s plan. They’ve even been known to sign up people without their knowledge. How: The agent says that he/she needs the senior’s Social Security number, and the senior gives it to him. The agent then uses the number to enroll the senior.
  • Part D. Posing as “Medicare representatives,” unscrupulous insurance agents call and ask you about the Part D plan that you have already signed up for. Since you know that you do have Part D, you can be tricked into thinking that it’s safe to give personal information to the caller, such as your Social Security number, which the scammer then uses for identity theft.
  • Drug discount cards. An individual may be offered a plan from a licensed insurance agent that costs less than Medicare Part D, but the agent does not disclose that the plan provides much less coverage than Medicare.
  • Self-defense: Before buying any Medicare-related plan, card or policy, contact your state insurance department. Ask if the agent is licensed, if the product is legitimate and whether there have been any complaints against the agent or the company. If you have been fraudulently enrolled in a Medicare Advantage Plan, contact State Health Insurance Assistance Programs (SHIP) at (Click on “Find a Counselor.”) Also contact your state insurance department and attorney general’s office, which can take action against agents for sales abuses.


    Rip-off: Investment deals that are really Ponzi schemes.

    In a Ponzi scheme (named for a 1920s con artist), you are offered the opportunity to put money into a sophisticated investment — such as real estate, oil and gas leases, promissory notes for a start-up company or housing for the homeless — that will pay very high returns. You invest, and soon you’re getting statements and the promised returns. But after a while, the statements and the payments stop coming. You can’t get your money out because the scammer has disappeared.

    There never really was an investment. You were paid with money that later participants “invested” in the scheme.

    Beware: There are a variety of Ponzi schemes being used right now. Examples…

  • In New Jersey, hundreds of investors so far have been defrauded of a total of $90 million because they invested in a real estate scheme to supposedly renovate and maintain certain rental properties. Investors are promised annual returns of 15% to 20%. But: The properties don’t exist.
  • In Washington state, two oil firms falsely advertised themselves as being actively involved in the energy sector in Southeast Asia. To date, 200 people have invested a total of $54 million.
  • Self-defense: Be especially suspicious of an investment company that claims to be registered in one state, physically exists in a second state and sells to investors in a third state. It’s likely the company does not exist.

    Always check with your state securities regulator to verify an investment company’s registration. You can find your state’s regulator through the North American Securities Administration Association (202-737-0900, At its Web site, click on the “Contact Your Regulator” link and the state where the business is supposed to be registered. Or go to the Financial Industry Regulatory Authority site ( to look up a securities firm or broker.

    If you think you may be a victim of a Ponzi scheme, contact your state attorney general’s office.


    Rip-off: International investment schemes that “offer” extremely high yields in a relatively short period of time.

    The con artist purports to have access to “bank guarantees” that he can buy at a discount and sell at a premium, producing exceptional returns. To make the schemes more enticing, con artists often refer to the “guarantees” as being issued by the world’s “prime banks.”

    Legal documents associated with such schemes often require victims to enter into nondisclosure agreements, offer returns on investments in “a year and a day” and claim to use forms required by the International Chamber of Commerce (ICC). In fact, the ICC has issued a warning to all potential investors that no such investments exist.

    Self-defense: Reject any investment that offers unusually high yields by buying and selling anything issued by “prime banks.”


    Rip-off: Claiming to be able to prevent foreclosures.

    The scammer makes misleading promises that a victim’s home will be permanently saved from foreclosure by signing the title over to the scammer. The victim ultimately loses his home, along with the money he paid to the scammer, who walks away with the title and equity in the home.

    Because foreclosure filings are public information, scammers target already troubled home owners, repeatedly contacting them by phone or mail. Self-defense…

  • Check the credentials, background and references of anyone offering to buy your home to save it from foreclosure.
  • Take your time. Don’t sign anything without checking with your lender. Never sign away ownership of your property to settle a default.
  • Have an attorney or a financial professional, such as an accountant, review the paperwork before you sign anything.
  • Don’t let anyone persuade you to cut off communication with your lender. The lender should be your first contact if you’re struggling to make your mortgage payments.
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