Identity theft is a problem at any age, and the prevalence of computers only makes stealing our private information easier, from any part of the world. When most of us think of identity theft, we think of credit card fraud, or rubber checks. The fact is that there are many kinds of identity theft, and the most destructive of these target seniors, who are a growing demographic. Seniors in particular are attractive targets because they have good manners, targetable assets and are less inclined to be negative, which makes them more susceptible to the untrustworthy. Caregivers and homecare companions need to learn the most common kinds of identity theft, and how to defend against them, so that loved ones don’t fall prey to these ruinous scams.
First, let’s review the most common types of identity fraud that target seniors, and how the scams work:
- Medical identity theft: scammers steal a Social Security number or other piece of personally identifiable information (PII) from a senior, then bill Medicaid or a health insurance company for services the senior doesn’t receive. This type of identity theft is expensive, because health care overall is expensive. It’s also tricky to unravel, requiring interaction with federal and state governments, as well as national insurance carriers, most of whom don’t have strong security and investigative teams. Medicaid will continue to pay fraudulent charges, simply because the charges are submitted.
- Estate identity theft: with PII from a recently deceased person in hand, criminals can collect tax returns, Social Security checks, and all kinds of other benefits. Sadly, the criminal in this type of fraud is often a family member of the deceased, and while this can be considered a “victimless” crime, it takes a terrible emotional toll on the rest of the grieving family. The possible consequences of lost inheritances or debt incurred can also be serious, as the legal and bureaucratic tangle can take years to work through.
- Tax fraud: it’s simple enough for a scammer to file a tax return and collect a refund with a stolen Social Security number or Employee ID number. This type of identity theft is growing, especially against seniors, because they are slower than other age groups to discover the crime and to seek help. All it takes to launch this kind of scam is losing a purse or wallet.
- Telemarketing scams: they are as old as the telephone, and the scams get more creative every year. Whether selling ‘free’ products with insanely expensive shipping, or pretending to be from the IRS with sheriffs ready to beat down the door, seniors are especially vulnerable to these phone fraudsters. The FBI warns that older women living alone are particularly at risk, and urge seniors to never give their personal or financial information out over the phone.
- Military identity theft: scammers perpetrate this particularly vile type of theft by taking over a service member’s personal information, often by calling veterans to ‘confirm’ disability status. Much like Medicaid fraud or medical identity theft, the criminals claim and receive military benefits they aren’t entitled to.
- Wire transfer fraud: after obtaining a victim’s online banking information, criminals transfer money from their financial accounts by wire transfer. As most bank statements are monthly, these crimes are often unreported until the victim sees their bank statement. Wire transfer fraud complaints to the Federal Trade Commission reached a high of 44 percent in 2010, more than double the rate in 2009. And on March 1, 2013, the Social Security Administration stopped sending paper checks, and began direct deposit for all Social Security benefits, meaning that seniors who didn’t bank online previously were forced to start.
- Familiar fraud: this last type of fraud is especially troubling for seniors, as no matter what the fraud, the perpetrator is a trusted friend or family member. Whether traditional identity theft like credit card fraud or unauthorized loans, or any of the special brands of identity theft we just reviewed, seniors are most at risk because they are least able to guard against friends and relatives.
Next week, in Caregivers Cheat Sheet: Seniors and Identity Theft Part II, we’ll talk about the strategies that caregivers, homecare companions and loved ones can use to protect themselves against most kinds of identity theft.