Watch for These Four Types of Elder Fraud

Sep 19, 2016

MoneyLife100Fraud comes in many forms, often disguised as an e-mail, a phone call, or a friendly investment seminar. It can affect people of all ages, but many of those behind fraudulent schemes feed off the weak, the infirm, and the older members of our society. Senior citizens, many of whom were raised to be polite and trusting, own their homes, have a nice nest egg of assets, and possess excellent credit ratings, are far too often victims of fraud. The Pennsylvania Institute of Certified Public Accounts (PICPA) warns senior citizens of four types of fraud they should look out for, as well as tips for avoiding them.

Medicare Fraud

Perpetrators of Medicare fraud use seniors as unwitting accomplices in schemes designed to steal money, often through the fraudulent billing of equipment, lab tests, and other services to insurance companies and Medicare. They pitch “free products” to seniors that have no medicinal value, even though insurers and Medicare get billed very large sums. Other times, scam artists administer fake tests to generate claims. Once they acquire insurance and Medicare information, they can submit false invoices for reimbursement.

Seniors should carefully monitor their insurer’s explanation of benefits and never sign blank insurance forms. They should also be reminded that there really is no such thing as free equipment or free services. Seniors should talk to their physicians before they sign up for any medical equipment or services.

Counterfeit prescription drugs and fraudulent anti-aging products have become prevalent. Product promotions, special deals, and cost reductions are promised, and unfortunately many of the “drugs” and anti-aging products are worthless. Seniors should be wary of buying drugs over the Internet, and they should talk to their physicians before purchasing any prescriptions. They should completely steer clear of anti-aging products as a general rule of thumb.

Funeral and Cemetery Fraud

Far too often, senior citizens fall victim to funeral and cemetery fraud. High-pressure promoters have been known to sell unnecessary current services, retain the right to bill for additional services in the future, and wrap people up in noncancellable contracts. Seniors should be advised to have an attorney review all contracts. They should also obtain the phone number for the Better Business Bureau so that they can call and find out if they are dealing with reputable individuals.

Telemarketing Fraud

High-pressure telemarketing frauds abound too. Free products, discount vacations, low-cost vitamins, and health care products are offered, but often unstated are the high postage and handling fees that must be paid. Unwelcome callers may also ask for credit card and banking information, and then this information is sold to individuals who run up credit card charges or wipe out bank accounts. The best advice to avoid these scams is to say “No thank you” and then hang up on every telemarketing call received.

Reverse Mortgage Fraud

Reverse mortgages can allow seniors access to the equity in their homes without the need to sell that home. Unfortunately, some schemes promoted by unscrupulous professionals end up stealing the equity in these homes. Victims of these scams are often offered free homes, investment opportunities, and refinance or foreclosure assistance. Legitimate reverse mortgages are insured by the Federal Housing Authority. Seniors should be warned against responding to unsolicited advertisements, reminding them that celebrity endorsements are not proof that a product is legitimate. They should never sign anything before they thoroughly understand it and have it reviewed.

A CPA Can Help

A CPA can help make seniors aware of the frauds previously mentioned and provide tips on how to steer away from them. For more information, find a CPA near you, or visit www.picpa.org/moneyandlife.
 


About PICPA

The Pennsylvania Institute of Certified Public Accountants (PICPA) is a premiere statewide association of more than 22,000 members working in public accounting, industry, government, and education. Founded in 1897, the PICPA is the second-oldest and fourth-largest state CPA organization in the United States.

Money & Life Tips are a joint effort of the AICPA and the Pennsylvania Institute of Certified Public Accountants (PICPA), as part of the profession’s nationwide 360 Degrees of Financial Literacy program.


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