Financial Fraud Against Seniors

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Five million! That's the number of financial fraud cases perpetrated against seniors in the United States. Unfortunately, care givers, law enforcement, or government officials only learn about one in 25 cases. Why the gap?

Financial fraud involving senior citizens happens every day. However, since most are discovered long after the crime is committed or are unreported for various reasons, it is hard for law enforcement or even family members to be proactive in preventing such occurrences.  For this reason, taking steps to make seniors less vulnerable is the best approach.

Why Seniors?

According to the FBI, scammers prefer to target senior citizens because they are more likely to have savings, to own their home, and to have excellent credit.  There is also a higher probability they are home when the criminal comes calling; are physically or mentally disabled; are distraught over the loss of a spouse; or are welcoming to a visitor because they simply feel lonely. Furthermore, people of this generation were generally raised to be polite and trusting, making them more likely to take the call or open the door.

Another appealing factor for criminals is that the elderly are less likely to report fraud. Lack of reporting can be due to not knowing the process to do so, being too ashamed, not realizing they were scammed, or fearing that relatives may conclude they are no longer able to live on their own and place them in a home. The fear of losing independence becomes a powerful barrier.

Con artists also understand that seniors can have failing memories and therefore make poor witnesses.  And, if the victim doesn't realize he/she has been scammed for weeks or months, the details become even more blurred.

Telemarketer Scams

The U.S. Department of Justice estimates that telemarketers scam around $40 billion a year from one in six Americans.  Approximately 80% of the victims are age 50 or older.  Scammers use the phone for investment and credit card fraud, lottery scams, identity theft, and selling goods that don’t exist. 

One of the best ways for Indiana residents to protect themselves against phone scammers is to register for the “Do Not Call” list at or call 888-834-9969.  According to the Indiana Attorney General, Indiana’s “Do Not Call” list is one of the most restrictive in the nation and it is free.

If an unsolicited call is received, understand that by law the caller must provide a signed written contract and allow seven days for the transaction to be canceled prior to any costs being charged.

Home Repair Scams

Home repair is another way that seniors are scammed.  Typically a person knocks on the door, claims to notice damage to the home (i.e. the roof), and offers to repair it.  Some seniors with mobility issues may not be able to actually see the damage mentioned and will take the scammer at their word.  If this happens, no agreement should be made until a second opinion is secured from another firm.  Any home improvements should have a written, signed contract and never require more than one-third of the total cost up front.

Reverse Mortgage Fraud

Reverse mortgage scams are prevalent since these vehicles were designed to allow older homeowners to convert the equity in their residence into supplemental income.  For seniors who are house rich, but cash poor, the reverse mortgage can appear to be an attractive option. Because of this, it is also popular with scammers.

According to the FBI, the two most common scams are equity theft and foreclosure rescue. In equity theft, the scammer purchases a home in foreclosure and sells it to a senior. The new senior homeowner is then instructed to take out a reverse mortgage. Once the transaction is complete, the scammer steals the proceeds of the loan.

In foreclosure rescue, the scammer identifies seniors who are at risk of losing their homes. The senior is encouraged by the scammer to obtain a reverse mortgage to save the property, but will not qualify. The scammer then advises the homeowner to take out a traditional mortgage instead, at which point the property and its equity is transferred to the scammer.

Be aware that reverse mortgages are complicated and not always the best option. For information visit the Federal Trade Commission at and search for Reverse Mortgages.


The best way for seniors to protect themselves is to be alert to current scams and know what to do to mitigate the risk.  The Indiana Attorney General’s website provides helpful information and allows individuals to sign-up for email and text notifications of the latest scams.  Go to and click on “Senior.”

This article was contributed by Meredith Carbrey, CFP, a Wealth Advisor at Bedel Financial Consulting, Inc.

Elaine E. Bedel, CFP, is CEO and president of Bedel Financial Consulting, Inc., a wealth management firm located in Indianapolis. She is a featured guest each Wednesday on the WTHR (NBC, Indianapolis) Channel 13 News at Noon, “Your Money” segment.  Elaine’s book, “Advice You Never Asked For…But wished you had,” is available on For more information, visit or email Elaine at

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