Retirees: Watch out for grandparent scams and other frauds that target the elderly

John Allen’s concern for his grandson cost him $16,500.

A series of calls from scammers to the 86-year-old’s home in East Amherst, New York, in July 2018 indicated that his grandson was in trouble with Chicago law enforcement following a car accident, and Allen needed to pay attorneys to keep his grandson out of jail.

“Absolute terror was in our minds,” says Allen, whose grandson actually was fine. “When you’re talking to them, they can be very convincing.”

The scammers first got him to send $5,400 in Home Depot gift cards, saying that was the quickest way to cover the supposed legal fees. Next, as Allen was urged to, he mailed $10,000 in cash ahead of what he was told was his grandson’s impending trial date.

The fraudsters didn’t stop there. Allen got more than a dozen calls demanding $150,000 and threatening his grandson’s freedom.

By then, Allen and his wife had made their normal weekly call to their daughter Karen Allen, 56, of Rogers Park, who sensed something was up, coaxed the story out of them and told them it wasn’t true.

Beyond the $15,000-plus he’d already paid, he spent $1,100 on a lawyer, trying, without success, to get his money back.

“These stories can be so convincing that your good judgment isn’t worth a lot,” Karen Allen says.

Her father had fallen victim to a grandparent scam — a common fraud targeting retirees. In 2018, the Federal Trade Commission got more than 21,000 complaints about grandparent or friend-in-need scams.

FTC investigators suspect that scammers get information about their victims through social media or even obituaries and then concoct stories that a grandchild is hurt or imprisoned. The key to their success? Making their victims maintain secrecy by convincing them not to call the child’s parents or law enforcement.

To avoid grandparent scams:

• Call your family directly at trusted phone numbers to check out what you’ve been told.

• Never wire money, send cash or buy gift cards for someone you’ve never met.

• If you’re being pressured to act immediately, don’t. That’s a huge red flag.

Romance scams often target older people, too. Imposters pose as a love interest on a dating site, eventually asking for money. Last year, the FTC got 21,500 complaints about romance scams, reporting $143 million in losses.

These scam artists create dating profiles, often with fake photos or using someone else’s identity, and later ask for money for some medical emergency or other misfortune. Or they claim to live abroad and need money for travel.

“They’re very effective at earning the other individual’s trust, and the victim really thinks they’re in love with this person, so they’re willing to do whatever the person asks,” says Todd Kossow, director of the FTC’s Midwest region.

Tips to protect yourself from romance scams:

• If someone on a dating website immediately asks to take the conversation offline, don’t.

• Never send money or gifts to someone you haven’t met.

• Watch for inconsistencies during conversations. You also can search images and names included on dating profiles.

The second-most common consumer complaint reported by the Consumer Federation of America last year was home-repair scams. After a natural disaster or severe weather, shady salespeople try to convince homeowners to pay for unnecessary work. Other scammers go door-to-door offering affordable but shoddy repairs. Some request upfront payment, then disappear.

Tips to avoid home-repair fraud:

• Beware of any contractor who demands money to buy basic supplies.

• Never pay cash for repairs. And do not let the contractor arrange financing.

• Don’t pay for or authorize work without a contract outlining the scope and anticipated timelines and material costs.

• If someone presents a very low bid, ask why. They may be cutting corners.

• Ask for multiple references — and call those people and ask detailed questions.

• Check companies online with the Better Business Bureau and Illinois attorney general’s office.

Another scam that often targets retirees involves work-at-home opportunities such as business coaching opportunities, in which people are asked to pay upfront for training, and “mystery shopper” schemes. Those involve paying the victim with a fake check for sharing experiences at stores, then getting the person to wire back a portion of the money before the check bounces. Another iteration involves reshipping packages — and never getting paid.

“Work-at-home scams just don’t pay,” says Julie Kenney of the U.S. Postal Inspection Service’s Chicago division. “Work-at-home is attractive, especially to retired people looking to make a few extra bucks.”

Tips to spot work-at-home scams:

• Never deposit a check received unexpectedly.

• Do not pay for work-at-home training.

• Google the business name along with words like “complaint,” “fraud” and “scam.

“Be On Guard” is reported by the Chicago Sun-Times and made possible through the support of AARP Illinois. The AARP Fraud Watch Network can help protect you from fraud and scams. Call this free helpline (877) 908-3360 to speak with volunteers trained in fraud counseling.