By Bridget Botelho
Contributing Writer
Seniors are often seen as prime targets for predators trying to make, or steal, a quick buck. That’s why banks, advocates such as the AARP of Rhode Island and the R.I. Department of Elderly Affairs have made it a priority to keep the elderly from falling into the money trap.
Seifert Systems Invests in Energy Efficiency to Strengthen Operations
For manufacturers, energy is more than just another operating expense. It plays a critical role…
Learn More
The AARP launched an initiative this year to educate seniors on smart investing and on how to avoid scams that can leave unsuspecting victims in debt.
The initiative – called “Smart Investing: Take Charge before a Bad Deal Takes You,” and produced by the AARP Foundation and the Investor Protector Trust – advises consumers to be skeptical of products that sound too good to be true and to thoroughly research products and companies before they invest money or give out any personal information.
“Victims of any type of fraud are emotionally and financially impacted by the experience,” said Kathleen Connell, state director of the AARP. “We cannot stress strongly enough the importance of checking the validity of an offer with a relative or close friend – and [we] also warn consumers not to write checks to anyone before they have all the information to make an informed decision.”
Barbara Peters, spokeswoman for the AARP in Rhode Island, said seniors are frequently invited to “investment workshops” that may include a free lunch. The events are advertised in newspapers; targeted seniors may also get invitations by mail.
After lunch, consumers who attend the seminars because they want to learn about investments may, for instance, be urged by persuasive salespeople to switch their 401(k) plans into variable annuities, Peters said.
“Annuities may work for some, but not for everyone,” she said. “They often carry high commissions [given to the sales agents] and punishing surrender costs. Older investors may not even live long enough to enjoy any benefits.”
Banks have sometimes been found to steer seniors toward what state regulators have deemed to be inappropriate investments. (Bank of America and Citizens Bank both have been in trouble for this, but have said they’ve since corrected the problem.)
But they can also play an important role in protecting seniors, by monitoring their accounts and notifying them immediately if there’s any irregular activity.
“Generally, it involves an unusually large withdrawal from an account,” said Michael Rauh, executive vice president of sales, service and delivery at The Washington Trust Co. “We try to gently ask questions to make sure that everything is okay.”
Other times, Rauh added, fraud “involves the deposit of an unusually large check and a series of subsequent withdrawals. Again, you look for things that are out of the ordinary and try to ask questions to determine the legitimacy of the transaction.
Ernesto Anguilla, spokesman for Bank of America, said the banking giant doesn’t have any programs specifically designed to protect the elderly, but all of its customers benefit from free fraud-detection services. In addition, any Bank of America customer with a checking or savings account who notices an unauthorized transaction, and reports it within 60 days, can be fully reimbursed for it, he said.
Online banking has made it easier for Bank of America customers to keep track of their accounts and quickly detect fraud, Anguilla said – and, in that sense, the elderly are at a disadvantage. Although a surprising number of older customers do use the online services, he said, they are less likely to do so than younger customers.
“The key is, for all customers, to diligently monitor their accounts and report any discrepancies as soon as possible,” Anguilla said.
Rhode Island has one of the largest shares of elderly residents in the country; to protect them, the state Department of Elderly Affairs is constantly on the lookout for fraudulent charities, fake sweepstakes, work-at-home schemes and telemarketing tricks.
When a new scam surfaces, the department reports it to area senior centers and housing complexes, as well as to other state agencies.
“The greatest ally of a scam is silence,” said department spokesman Larry Grimaldi. “If no one reports it, the scam perpetuates.”
This summer, the department reported that seniors were receiving calls from “the National Medical Office of New York.” The caller would enroll the senior in a nonexistent Medicare Part D plan, offering medications for life for a one-time fee of $300. The alleged scammers asked for names, addresses, and bank account numbers.
Medicare Part D plan coordinators are allowed to contact members by phone, but cannot ask for personal information such as Social Security numbers and banking information.
In September, the department also learned of a new lottery scam called “Luckday Lotto,” supposedly run out of the Netherlands. The “winners” are notified that they have won $1 million euros in a drawing, and to cash in, are told to simply e-mail their personal information on the “claims form.”
The Department of Elderly Affairs also offers victims of fraud the resources to deal with an incident. For instance, it may direct them to the Legal Service and Information Referral for the Elderly, a public-service program of the Rhode Island Bar Association designed to help persons 60 and older to obtain legal information and advice.
