Keeping Seniors Safe From Scams
Our seniors are a charitable bunch, but sometimes that can get them into trouble. And the scammers out there know it. The scammers know that our seniors are often isolated and being a friendly bunch are willing to talk to a friendly voice. They also know the mail is the highlight of the day for many seniors. Seniors are also inclined to provide information via surveys. And everyone likes to think they could win it big with the lottery or sweepstakes.
Take my father in law. He has always been charitably minded, but when the stack of donations threatened to topple off the kitchen counter we knew there was a problem. This is a smart man who had a very successful career in sales, but now he was exhibiting signs of short-term memory loss and reduced executive function. We learned soon thereafter that he did indeed have all the hallmarks of Alzheimer’s disease.
The charitable snowball was a wake up call for my family. It was really scary when we started digging into things. At one point, we made a list of all the “charities” he donated to and it topped 100. Fortunately, it wasn’t big amounts, $15 – $30 at a pop, but that added up quickly to hundreds of dollars a month. Not surprisingly, in researching these “charities” we determined that some of them were not non-profit 501(c)s and many of them used the majority of the money they received not for their charitable purposes, but rather for administration and obtaining more donations.
We found the following resources to be very helpful in wading through this mess.
Check out the credentials of a potential charitable organization before you make a donation. Charity Navigator – www.charitynavigator.org – is a great site to gather information.
You can also confirm charitable status of an organization through the IRS web site- www.irs.gov/app/pub-78/– remember that some organizations (like churches) may not be listed, so ask the organization for more information if you’re not sure.
Charity Watch (formerly American Institute of Philanthropy) www.charitywatch.org rates many organizations and provides copies of their annual reports. This is where you can find information about how they are using the funds, especially the amount spent on administration i.e., fundraising.
The Better Business Bureau Wise Giving Alliance—www.bbb.org/us/charity/ – publishes the Wise Giving Guide three times a year. The Guide summarizes the results of the Alliance’s latest national charity evaluations and features a cover story, usually with giving tips, on charity accountability issues or other topics of interest to donors.
The more difficult item that we also dealt with was surveys. My father-in-law received surveys from all sorts of groups, many with often polar opposite political slants, and he felt compelled to fill them out and return them, sometimes with a donation. This only served to get his name on more lists and create more mail.
Finally, and most dangerously, there were the “sweepstakes” and “lottery” winner letters. Hundreds of them. You know the ones . . . “you may be a winner”. . . just send in $$ to pay for the tax, insurance, or handling. In some instances what you are actually doing in returning the response form and fee is agreeing to allow the company to take a monthly amount out of your checking account or credit card to keep you informed of upcoming lotteries, etc. In other instances they use the information to hound you for more money and will even arrange to come to your house to pick up the insurance and handling fee.
We saw this first hand as well. We’re sure it started with sending in a response and check, but it ended with a series of increasingly harassing phone calls and his consent to allow someone to come to the house to pick up the insurance fee. Fortunately we were able to head off the in-person visit and the wiping out of his bank account, but just barely. It gave us a terrific scare. No sooner had we closed his bank account and opened a new one, the very next day he received a call from some outfit requesting his bank account number to set up an account to prevent identity theft of his internet accounts! Sadly, and in this case fortunately, his short-term memory allowed him to give out the old bank account number and no further damage was done.
Three key things to remember when it comes to lotteries or sweepstakes:
No legitimate lottery or sweepstakes will ask you to pay the taxes in advance of receiving your winnings.
If you don’t remember entering, it’s likely a scam.
If it sounds too good to be true, it probably is.
If you have a senior in your life you can do them a world of good by just checking in and taking a look at the mail. If something seems out of order it may be time for a tough conversation and someone to provide a little more oversight. Communication with compassion is the key since no one wants to think they can no longer be independent. But that conversation may lead in interesting directions. I have a number of clients that were grateful when their loved one offered to help with the everyday financial management such as bill paying.
Here are some ways to prepare for and start tough conversations:
If charitable contributions are getting out of control checking out the charities using the above resources can be a great starting point.
The Federal Trade Commission, among other helpful information for consumers, has a terrific Consumer Alert regarding scams.
If you have never heard of the “Lottery” organization and/or never entered a drawing this is a big clue that it is a scam.
Read the fine print to see what you are really paying for with the lottery. No legitimate lottery will make you pay insurance, shipping, or handling, and taxes are not paid up front.
It’s a jungle out there and we all need to do our homework and be safe when it comes to our hard earned money.
Heather R. Chubb, Esq.
The Chubb Law Firm
Fair Oaks, California