What to Look For and How to Protect Yourself and Your Family
The Grandparent Scam: Don’t Let It Happen
a grandparent, and you get a phone call or an e-mail from someone who identifies himself as your grandson. “I’ve been arrested in
another country,” he says, “and need money wired quickly to pay my bail. And oh by the way, don’t tell my mom or dad because they’ll
only get upset!”
This is an example
of what’s come to be known as “the grandparent scam”—yet
another fraud that preys on the elderly, this time by taking advantage of their love and concern for their grandchildren.
scam has been around for a few years—our Internet Crime Complaint Center
(IC3) has been receiving reports about it since 2008. But the scam and scam artists have become more sophisticated. Thanks to the
Internet and social networking sites, a criminal can sometimes uncover personal information about their targets, which makes the
impersonations more believable. For example, the actual grandson may mention on his social networking site that he’s a photographer
who often travels to Mexico. When contacting the grandparents, the phony grandson will say he’s calling from Mexico, where someone
stole his camera equipment and passport.
A grandparent receives a phone call (or sometimes an e-mail) from a “grandchild.” If
it is phone call, it’s often late at night or early in the morning when most people aren’t thinking that clearly. Usually, the
person claims to be traveling in a foreign country and has gotten into a bad situation, like being arrested for drugs, getting in
a car accident, or being mugged…and needs money wired ASAP. And the caller doesn’t want his or her parents told.
Sometimes, instead of the “grandchild” making the phone call, the criminal pretends
to be an arresting police officer, a lawyer, a doctor at a hospital, or some other person. And we’ve also received complaints
about the phony grandchild talking first and then handing the phone over to an accomplice…to further spin the fake tale.
We’ve also seen military families victimized: after perusing a soldier’s social
networking site, a con artist will contact the soldier’s grandparents, sometimes claiming that a problem came up during military
leave that requires money to address.
While it’s commonly called the grandparent scam, criminals may also claim to be a
family friend, a niece or nephew, or another family member.
What to do if you
have been scammed. The financial losses in these cases—while they can be
substantial for an individual, usually several thousand dollars per victim—typically don’t meet the FBI’s financial thresholds for
opening an investigation. We recommend contacting your local authorities or state consumer protection agency if you think you’ve been
victimized. We also suggest you file a complaint with IC3, which not only forwards complaints to the appropriate agencies, but it
collates and analyzes the data—looking for common threads that link complaints and help identify the culprits.
And, our advice
to avoid being victimized in the first place:
Resist the pressure to act quickly.
Try to contact your grandchild or another family member to determine whether or not
the call is legitimate.
Never wire money based on a request made over the phone or in an e-mail….especially
overseas. Wiring money is like giving cash—once you send it, you can’t get it back.
Fraud or Health Insurance Fraud
manufacturers offer “free” products to individuals. Insurers are then charged for products that were not needed and/or may not have
sometimes fake tests are given to individuals at health clubs, retirement homes, or shopping malls and billed to insurance companies
providers bill insurers for services never rendered by changing bills or submitting fake ones.
Medicare fraud can
take the form of any of the health insurance frauds described above. Senior citizens are frequent targets of Medicare schemes,
especially by medical equipment manufacturers who offer seniors free medical products in exchange for their Medicare numbers. Because
a physician has to sign a form certifying that equipment or testing is needed before Medicare pays for it, con artists fake signatures
or bribe corrupt doctors to sign the forms. Once a signature is in place, the manufacturers bill Medicare for merchandise or service
that was not needed or was not ordered.
Tips for Avoiding
Health Care Fraud or Health Insurance Fraud:
Never sign blank insurance claim forms.
Never give blanket authorization to a medical provider to bill for services
Ask your medical providers what they will charge and what you will be expected to
Carefully review your insurer’s explanation of the benefits statement. Call your
insurer and provider if you have questions.
Do not do business with door-to-door or telephone salespeople who tell you that
services of medical equipment are free.
Give your insurance/Medicare identification only to those who have provided you with
Keep accurate records of all health care appointments.
Know if your physician ordered equipment for you.
Tips for Avoiding
Counterfeit Prescription Drugs:
Be mindful of appearance. Closely examine the packaging and lot numbers of
prescription drugs and be alert to any changes from one prescription to the next.
Consult your pharmacist or physician if your prescription drug looks suspicious.
Alert your pharmacist and physician immediately if your medication causes adverse
side effects or if your condition does not improve.
Use caution when purchasing drugs on the Internet. Do not purchase medications from
unlicensed online distributors or those who sell medications without a prescription. Reputable online pharmacies will have a seal
of approval called the Verified Internet Pharmacy Practice Site (VIPPS), provided by the Association of Boards of Pharmacy in the
Be aware that product promotions or cost reductions and other “special deals” may be
associated with counterfeit product promotion.
Tips for Avoiding
Funeral and Cemetery Fraud:
Be an informed consumer. Take time to call and shop around before making a purchase.
Take a friend with you who may offer some perspective to help make difficult decisions. Funeral homes are required to provide
detailed general price lists over the telephone or in writing.
Educate yourself fully about caskets before you buy one, and understand that caskets
are not required for direct cremations.
Understand the difference between funeral home basic fees for professional services
and any fees for additional services.
Know that embalming rules are governed by state law and that embalming is not
legally required for direct cremations.
Carefully read all contracts and purchasing agreements before signing and make
certain that all of your requirements have been put in writing.
Make sure you understand all contract cancellation and refund terms, as well as your
portability options for transferring your contract to other funeral homes.
Before you consider prepaying, make sure you are well informed. When you do make a
plan for yourself, share your specific wishes with those close to you.
As a general rule governing all of your interactions as a consumer, do not allow
yourself to be pressured into making purchases, signing contracts, or committing funds. These decisions are yours and yours alone.
Tips for Avoiding
Fraudulent “Anti-Aging” Products:
If it sounds too good to be true, it probably is. Watch out for “Secret Formulas” or
Don’t be afraid to ask questions about the product. Find out exactly what it should
and should not do for you.
Research a product thoroughly before buying it. Call the Better Business Bureau to
find out if other people have complained about the product.
Be wary of products that claim to cure a wide variety of illnesses—particularly
serious ones—that don’t appear to be related.
Be aware that testimonials and/or celebrity endorsements are often misleading.
Be very careful of products that are marketed as having no side effects.
Question products that are advertised as making visits to a physician unnecessary.
Always consult your doctor before taking any dietary or nutritional supplement.
If you are age 60 or
older—and especially if you are an older woman living alone—you may be a special target of people who sell bogus products and services
by telephone. Telemarketing scams often involve offers of free prizes, low-cost vitamins and health care products, and inexpensive
There are warning
signs to these scams. If you hear these—or similar—“lines” from a telephone salesperson, just say “no thank you,” and hang up the
“You must act now, or the offer won’t be good.”
“You’ve won a free gift, vacation, or prize.” But you have to pay for “postage and
handling” or other charges.
“You must send money, give a credit card or bank account number, or have a check
picked up by courier.” You may hear this before you have had a chance to consider the offer carefully.
“You don’t need to check out the company with anyone.” The callers say you do not
need to speak to anyone, including your family, lawyer, accountant, local Better Business Bureau, or consumer protection agency.
“You don’t need any written information about the company or its references.”
“You can’t afford to miss this high-profit, no-risk offer.”
Tips for Avoiding
It’s very difficult
to get your money back if you’ve been cheated over the telephone. Before you buy anything by telephone, remember:
Don’t buy from an unfamiliar company. Legitimate businesses understand that you want
more information about their company and are happy to comply.
Always ask for and wait until you receive written material about any offer or
charity. If you get brochures about costly investments, ask someone whose financial advice you trust to review them. But,
unfortunately, beware—not everything written down is true.
Always check out unfamiliar companies with your local consumer protection agency,
Better Business Bureau, state attorney general, the National Fraud Information Center, or other watchdog groups. Unfortunately,
not all bad businesses can be identified through these organizations.
Obtain a salesperson’s name, business identity, telephone number, street address,
mailing address, and business license number before you transact business. Some con artists give out false names, telephone
numbers, addresses, and business license numbers. Verify the accuracy of these items.
Before you give money to a charity or make an investment, find out what percentage
of the money is paid in commissions and what percentage actually goes to the charity or investment.
Before you send money, ask yourself a simple question. “What guarantee do I really
have that this solicitor will use my money in the manner we agreed upon?”
Don’t pay in advance for services. Pay services only after they are delivered.
Be wary of companies that want to send a messenger to your home to pick up money,
claiming it is part of their service to you. In reality, they are taking your money without leaving any trace of who they are or
where they can be reached.
Always take your time making a decision. Legitimate companies won’t pressure you to
make a snap decision.
Don’t pay for a “free prize.” If a caller tells you the payment is for taxes, he or
she is violating federal law.
Before you receive your next sales pitch, decide what your limits are—the kinds of
financial information you will and won’t give out on the telephone.
Be sure to talk over big investments offered by telephone salespeople with a trusted
friend, family member, or financial advisor. It’s never rude to wait and think about an offer.
Never respond to an offer you don’t understand thoroughly.
Never send money or give out personal information such as credit card numbers and
expiration dates, bank account numbers, dates of birth, or social security numbers to unfamiliar companies or unknown persons.
Be aware that your personal information is often brokered to telemarketers through
If you have been victimized once, be wary of persons who call offering to help you
recover your losses for a fee paid in advance.
If you have information about a fraud, report it to state, local, or federal law
As web use among
senior citizens increases, so does their chances to fall victim to Internet fraud. Internet Fraud includes non-delivery of items
ordered online and credit and debit card scams. Please visit the
FBI’s Internet Fraud webpage for details about these crimes and tips for protecting yourself from them.
As they plan for
retirement, senior citizens may fall victim to investment schemes. These may include advance fee schemes, prime bank note schemes,
pyramid schemes, and Nigerian letter fraud schemes. Please visit the
Common Fraud Schemes webpage for more information about these crimes and tips for protecting yourself from them.
The FBI and the U.S.
Department of Housing and Urban Development Office of Inspector General (HUD-OIG) urge consumers, especially senior citizens, to be
vigilant when seeking reverse mortgage products. Reverse mortgages, also known as home equity conversion mortgages (HECM), have
increased more than 1,300 percent between 1999 and 2008, creating significant opportunities for fraud perpetrators.
scams are engineered by unscrupulous professionals in a multitude of real estate, financial services, and related companies to steal
the equity from the property of unsuspecting senior citizens or to use these seniors to unwittingly aid the fraudsters in stealing
equity from a flipped property.
In many of the
reported scams, victim seniors are offered free homes, investment opportunities, and foreclosure or refinance assistance. They are
also used as straw buyers in property flipping scams. Seniors are frequently targeted through local churches and investment seminars,
as well as television, radio, billboard, and mailer advertisements.
A legitimate HECM
loan product is insured by the Federal Housing Authority. It enables eligible homeowners to access the equity in their homes by
providing funds without incurring a monthly payment. Eligible borrowers must be 62 years or older who occupy their property as their
primary residence and who own their property or have a small mortgage balance. See the FBI/HUD Intelligence Bulletin for specific
details on HECMs as well as other foreclosure rescue and investment schemes.
Tips for Avoiding
Reverse Mortgage Scams:
Do not respond to unsolicited advertisements.
Be suspicious of anyone claiming that you can own a home with no down payment.
Do not sign anything that you do not fully understand.
Do not accept payment from individuals for a home you did not purchase.
Seek out your own reverse mortgage counselor.
If you are a victim
of this type of fraud and want to file a complaint, please submit information through our
electronic tip line or
local FBI office. You may also file a complaint with HUD-OIG at
www.hud.gov/complaints/fraud_waste.cfm or by calling HUD’s hotline at 1-800-347-3735.
intelligence bulletin on reverse mortgages.
Resources on Frauds Impacting Seniors:
Resources for Seniors
- Resources from the United
States Senate Special Committee on Aging