Personal Finance: Protect yourself from common senior scams

photo Chris Hopkins

Computer hacking and data theft have gotten all the attention lately. But many of the old standby schemes are still in circulation. They often target seniors and run the gamut from phony funeral plans to bogus drugs. With a healthy dose of caution, you can easily avoid becoming another victim.

According to the FBI, senior citizens are especially vulnerable to victimization since they tend to have larger nest eggs, often are reluctant to seem unfriendly or skeptical, and may be reticent to admit to being scammed. Crooks also consciously target older victims who may be less likely to accurately remember important details about the con or the perpetrator.

Remember first of all that if someone you do not know well is attempting to elicit payment from you for any product or service, a healthy dose of skepticism is not rude but prudent. Legitimate purveyors will not be offended by your caution.

Common cons of health care

Health care scams are among the most frequently perpetrated. These schemes often involve the sale of discounted medical equipment or offers of free products or services in exchange for information about your Medicare account. The company then fraudulently bills Medicare under your name for services not actually rendered.

Don't ever sign blank claim forms, and only order equipment from companies you know and trust. Never share your Medicare information to a new provider until you verify their legitimacy. If in doubt, contact your doctor's office manager or your insurance carrier to inquire about the seller and to verify the doctor's order for the equipment.

Another popular scam is the sale of counterfeit prescription drugs. This is not only a financial rip-off but may be dangerous if the drug is phony. Never purchase prescriptions from local sources that are not well known and established pharmacies. And be very wary of Internet sources offering "special deals." Look for the seal of approval from the Association of Boards of Pharmacy in the U.S., known as the VIPPS certification of reliability for Internet pharmacies, and double-check with the Better Business Bureau.

Funeral services

Many seniors make pre-arranged funeral plans in a thoughtful attempt to relieve grieving relatives of the burden. But scammers know that a decision as emotional as your future eternal resting place is the perfect opportunity for a swindle.

In January of 2014, the FBI broke up a ring of bogus funeral plan arrangers who conned 100,000 victims out of $450 million in prepaid services and then absconded with the loot. Smaller-scale scams involving embezzlement of prepaid funds have occurred even in some long-established family-owned funeral homes. And legitimate presale representatives from reputable funeral homes can sometimes exert undue pressure in an effort to upsell you into products you do not need.

Check out the sales representative, consult with another family member or friend, and visit the funeral home in person. Never sign any document during your first meeting, don't give away any personal information and insist on an itemized price quotation in writing. You might even touch base with the state board of funeral directors to confirm the legitimacy of the company. And if the sales tactics seem pushy to you, walk away.

A healthy dose of caution is warranted when dealing with unknown sales representatives, especially when you are solicited over the phone or on the Internet. Take it slow, and do your homework.

Christopher A. Hopkins, CFA, is vice president at Barnett & Co. Advisors.

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