Word To The Wise: Scammers Know No Bounds!

Financial predators are becoming highly sophisticated, and their ranks are swelling as legitimate businesses join in the scamming free-for-all. Some sordid examples will illustrate this premise. A case in point is one gentleman who was in his eighties, and becoming very forgetful. In consequence, his wife had to take over the financial duties of the household. With elderly couples, this is not an unusual pattern. Often one becomes the caretaker of the other, if there is a severe decline in mental or physical health of either partner.

Requests for subscription renewal would come in the mail for the husband on a steady basis, to magazines he had already paid for ten times over. Because of his failing memory, he would completely forget he had already paid for the subscription on numerous occasions prior in a matter of a few months. The more frequently he would pay, the more often the subscription renewal forms would come in. Eventually the deluged old fellow was getting one notice a month for each of numerous magazines and newsletters.

Along with the spurious requests for magazine renewal, the elderly octogenarian began receiving books and CDs he never ordered. To complicate the issue, the man was also receiving numerous offers of “free” merchandise, which caused more unsolicited books and CDs to arrive on the doorstep. With the books and CDs came written threats to send any refusals of payment for the unwanted merchandise on to a collection agency.

Once the wife took a serious look at the couple’s finances, she took the trouble to total up expenditures on the unwelcome merchandise and unnecessary renewal of magazine subscriptions. Shockingly, it came to almost a thousand dollars a year. The problem was that no matter how much the elderly man agreed with his wife that he should stop answering this mail, he would promptly fail to recall her warnings. If another renewal notice or payment request for unsolicited merchandise came in the mail, he would promptly write out a check for it. The pair were having frequent arguments on the subject, that became quite intense.

I advised the woman to monitor her husband’s mail, and remove any magazine renewals or offers of “free” merchandise. At first, she balked at my suggestion, insisting that screening someone’s mail would take away dignity. I asked if she would favor her husband’s assets being stripped from him, or would it be preferable to protect him from the scam artists out there. For a long time she resisted my admonitions, but finally realized monitoring her husband’s mail was the only solution to a difficult problem. She saw too much money being frittered away for no good reason, which was causing the couple to economize in other uncomfortable ways.

In another situation, a friend of mine was contacted via telephone, ostensibly by her bank. The caller insisted there was unauthorized activity on her account, wanting her to divulge personal information to “verify” the account information. This was followed by a threat to close the account if she wasn’t forthcoming with the desired information immediately. In consequence, she gave the caller her bank account and Social Security number, then called me for advice once alarming afterthoughts set in.

My advice was to follow seven simple rules for addressing possible identity theft:

• Get a free credit report, then check for any fraudulent activity.
• Place a fraud alert on the credit report.
• Close the account.
• Follow up with a letter to each and every creditor in regard to any fraudulent activity.
• Get a letter from each creditor indicating any resolution in regard to the fraudulent activity.
• File a police report and obtain a copy as evidence of the crime.
• Contact the Federal Trade Commission

Not surprisingly, my friend was reluctant to go to all the trouble of taking the above steps. She really couldn’t see any justification for following through with my advice. It took some convincing, but I made her realize she needed proof a crime had been committed. Otherwise she would be responsible for paying any accounts opened in her name in which purchases were made. I gave her an example of what had happened to another client of mine.

A woman had been divorced from her ex-husband for a number of years. Over time, she had never used a credit card, nor borrowed any money. Neither had she ever bothered to obtain a free credit report. So this unfortunate lady received quite a rude shock when she started the process of obtaining a mortgage to purchase a home. Unbeknownst to her, her credit had been ruined by all sorts of unpaid purchases she knew nothing about. My speculation was that her ex-husband, who was the only person to have had access to her personal financial information, had taken out numerous accounts in her name. Then the scoundrel went on a spending spree on her credit.

I myself have been the target of business scams. In the mail I have often received what look like rebate checks in an amount of about ten dollars. The first time I was in a real quandary whether to cash it. I couldn’t remember having purchased anything that would have resulted in a rebate. The check looked perfectly legitimate, with an actual expiration date, to encourage it being deposited quickly without thinking. I finally turned the thing over onto the back, and saw some very fine print on one end. Here is what it said:

“By cashing this check I agree to a thirty-day trial offer in X Credit Protection Company. I understand that the $13.99 monthly fee will be automatically charged to the credit card account I have on file with Y Rental Car Company unless I cancel my membership by calling [the following telephone number:1-8ZZ-ZZZ-ZZZ] before the end of the trial period. I understand that after my first year I will be charged $14.99 a month for the next twelve months and I will also be charged every month thereafter at the then-current monthly fee, unless I call to cancel and owe nothing further. I authorize Y Rental Car Company to securely transfer my payment information to X Credit Protection Company for enrollment, billing and benefit processing and I authorize X Credit Protection Company to charge the monthly membership fee after my thirty-day trial.”

Needless to say, I won’t be using that rental car company again. Had I cashed the check without reading the fine print on the back, I would have inadvertently opted into a credit protection program I had not asked for. The fees for this program were astronomical, when I could have provided the same service to myself for nothing. And the fees could have been jacked up in two years to whatever the credit protection company wanted to charge. Heaven help any customer in trying to opt out of the program once the check was inadvertently cashed. S/he would no longer have the necessary telephone number to call and cancel the membership.

Scammers masquerade in all sorts of clever camouflage, and can actually be a legitimate company using highly unethical business practices. Because our federal government seems unwilling or unable to police these unscrupulous tactics, consumers must be extra vigilant in avoiding financial predators. The elderly are particularly vulnerable because they are often forgetful, not necessarily sophisticated nor technologically savvy, and frequently are the folks with the money.

Here are some rules of thumb to avoid becoming a victim of fraud:

• Don’t give advance payment/fees/taxes
• Just say “NO” or hang up the phone; ask lots of questions
• Don’t give out personal information; guard it with care
• Be wary of strangers
• Trash phony mail; shred financial information
• Get everything in writing; read the fine print
• Think before doing; take your time
• Don’t trust – verify and clarify
• Monitor financial accounts
• Make a copy of wallet contents
• Prizes – give no money for a “free” prize; foreign lotteries are illegal; buying something will not win a prize; entering contests puts the applicant on a “sucker list”

Lesson to be learned: Forewarned is forearmed. Be wary. Financial predators come in all shapes, sizes and disguises.

Elaine Roberts Musser is an attorney who concentrates her efforts on elder law and aging issues, especially in regard to consumer affairs. If you have a comment or particular question or topic you would like to see addressed in this column, please make your observations at the end of this article in the comment section.