Financial scammers often target the elderly, who may have weakened mental ability, but who have resources upon which to prey.
Recent local scams include:
Canadian lottery. A letter arrives saying the recipient has won a large cash prize in the Canadian lottery, and enclosing a sizeable check. All that’s required, the letter says, is for the recipient to send a check to pay the taxes due. The victim sends back a check, and only later discovers that the Canadian lottery check is bogus. In the meantime, the victim’s legitimate check has been cashed and the perpetrators have disappeared.
“Phishing” scams. In this type of scam, a call or email seeks personal or financial information for what sounds like a legitimate purpose.
Such a request may come from a source that sounds trustworthy. One example is a bogus email from “tax [email protected]” asking the recipient to provide confidential information in order to receive a personal income tax refund. The confidential information is sold or used to perpetrate a theft.
Living trust scams. By means of a free luncheon or door-to-door visit, a salesperson promises that a living trust will shelter assets from all probate costs and estate taxes, or allow a person to qualify for Medicaid without spending down assets. For an expensive price, the customer is sold a “kit” consisting mainly of pre-printed forms that may not conform to state law, or that is inappropriate for the customer’s specific circumstances.
AARP warns that such generic living trust packages “often don’t include clear instructions on how to fund the trust. Poorly drawn or unfunded trusts can cost you money and endanger your best intentions.”
In addition, there have been instances where the trust salesperson uses the information gained from the customer to sell that customer an annuity product which may be wholly unsuitable for the customer.
While living trusts can be useful for some persons, they are not appropriate for everyone. If you think one may be right for you, work with a reputable attorney.
For more information
The Senior Action Coalition (SAC), a Pittsburgh non-profit organization, helps educate the public about known frauds and scams, and provides advice to those who may be victims.
SAC maintains a website that describes various types of scams, offers prevention tips, and contains links to learn more. SAC also provides speakers free of charge. Visit www.senioractioncoalition.org or call (412) 359-7900.