How to Prevent Theft by Caregivers Part 2

How to Prevent Theft by Caregivers Part 2

 

 Read Part 1 Here

 

 

 

 

 

 

 

Don’t Use Cash

 

If your hired caregiver is responsible for running errands or buying groceries, don’t give them cash. Instead, use prepaid debit cards or gift cards along with asking for receipts for all purchases.

 

That way, all purchases can be tracked and verified. Plus, if the hired caregiver steals those cards, they’re only getting a limited amount.

 

Though the vast majority of senior caregivers are reputable and honest, occasionally someone comes along who takes advantage of an elderly client.

 

According to Sally Hurme, coordinator of AARP’s Financial Protection Outreach & Service, there are at least 5 million financial abuse victims each year in the U.S., and only one in 25 of them are reported to authorities.

 

Hurme cites many reasons why elder financial abuse is a “particularly pernicious crime.”

 

“Studies point to specific cracks in victims’ defenses against exploitation: trust, financial niavete, cognitive impairments, social isolation, dependency, fear, and embarrassment.”

 

Hurme goes on to explain that elder financial abuse is unique because “there is a very real chance that the victim has no idea that she has been … victimized. The victim may have no awareness that anything is amiss with his finances.”

 

There are many ways of combating and preventing financial abuse of elders, one of which is using a reputable caregiving agency. Many of these agencies not only screen their employees, but also do background checks to ensure the safety and security of their elderly clients.

 

Some such agencies have also begun a gift card program. Gift cards are a convenient and easily accessible solution to preventing certain financial abuses. Agencies issue the gift card to the caregiver, who can then buy groceries and other essentials for their clients. Since the gift card is purchased through a bank, the agency can track purchases online and know when transactions take place. All risk, which is limited to the amount of money put into the gift card, is borne entirely by the agency. The caregiver never needs to use the senior’s cash or credit cards as all purchases must be made using the gift card. Receipts are kept and purchases are then billed to the client with their regular invoice.

 

Though financial abuse of elders is a reality, measures can be taken to minimize the damages and the possibility of elderly clients being victimized.

 

As Hurme points out, “Even though there are no broken bones, the effect is devastating financially and emotionally.”

 

Being aware, taking steps to prevent theft, and utilizing reputable In-Home Care Agencies are the first defenses against elder financial abuse.

 

 

 

Watch for Over Attachment

 

Hired caregivers who are planning to steal might start out by creating an unusually close relationship with your senior. Through this tight bond, they may be able to get your older adult to voluntarily give them money, valuables, or extravagant gifts like cars!

 

That’s not to say that you should be suspicious a little suspicious and look into things, especially if you see any of the signs outlined below.

 

An heirloom bracelet goes missing, electronic gadgets can’t be found, a wallet or bank account seems to be bleeding cash. Talk to anyone who’s hired someone to help care for an older loved one, and theft is almost always a major worry. Bringing a paid caregiver into the home — whether through an agency or privately — can come as welcome relief to all, but it can also feel like a risky decision. Stories abound about vulnerable people who’ve been taken advantage of.

 

The solution? Be careful, proactive, and alert. Here, some of the key warning signs that a caregiver is on the take.

 

Receipts that don’t add up

If grocery shopping and other errands are among a caregiver’s responsibilities, it’s pretty easy for “mix-ups” to occur. You might notice items listed on a receipt that seem out of character for your loved one, or certain supplies that seem to run out — and be replaced — with surprising frequency. If the caregiver takes your loved one out to shop or dine, you may notice purchases from stores that he or she doesn’t typically frequent or restaurant meals that are out of your family’s typical price range.

Why it’s worth worrying about:

A few dollars here, five dollars there may not seem worth making a fuss over. After all, caregivers aren’t usually well paid, so is it worth rocking the boat over a little bit of paycheck padding?

Yes, says Carolyn Rosenblatt, author of The Boomer’s Guide to Aging Parents. “You may see $6.50 for a lipstick, knowing Grandma doesn’t wear lipstick, but if you let it slide you’re sending a signal that no one’s minding the store.” Typically, these first purchases are tests, Rosenblatt says. “The caregiver is saying, ‘Let’s see if I can get away with it.’ If you don’t respond by confronting her, you’re saying, ‘Yes, you can.'”

 

What to do:

For starters, avoid cash. Supply the caregiver with debit gift cards preloaded with a limited balance. This way, if fraud is occurring, you can limit the amount of liability your family is exposed to. Also, use online banking to monitor card transactions, so you can see how much is being spent at each store. Ask the caregiver to supply receipts for each shopping trip, and keep an eye out for any purchase that seems unnecessary or for quantities that seem overlarge.

If you find yourself hesitating over a questionable purchase in case it’s an honest mistake, bring it up in that spirit, keeping it light and nonconfrontational. Explain that you noticed a purchase that didn’t seem to be something intended for your family member, and you’d like to keep those kinds of purchases separate in the future so it’s easy for you to keep track.

 

Phone Use and Friendships

 

Frequent cell phone use on the job

Texting or taking calls on the job is discourteous and distracting — but it could also be a sign of something more serious.

 

Why it’s worth worrying about:

While there are legitimate reasons a caregiver may need to make an occasional call, if someone’s on the phone all the time, it’s a signal that some outside relationship or network of relationships is more important than caregiving. It may even be that some outsider is calling the shots, says Rosenblatt.

 

What to do:

If you — or the agency you’re working with — haven’t already done so, run a thorough background check on the person you’ve hired. While some agencies do an in-depth background check on all employees, including requiring drug testing, others are much less thorough. It’s important to make sure good research was done, says Rosenblatt, because all too often records of crimes committed in other states or counties may not come up during a simple records search in your area.

Next, make sure you’ve securely protected your family member’s finances from potential fraud. The best way to do this is by having your family member sign a durable power of attorney for finances, which authorizes you or another trusted person to oversee financial transactions. A power of attorney is just a piece of paper, though, unless it’s recognized by the financial institutions that handle your loved one’s money. The safest strategy is to inform the banks and other financial institutions that you’re the proper legal agent for your loved one’s finances and that no one else is authorized to act. To do this, you’ll probably be asked to show a copy of the power of attorney document and may need to fill out additional forms.

 

 

Cultivating a Personal Connection

 

For many older adults, a caregiver quickly becomes a trusted friend, often the only person they see from day to day. With such consistent and intimate contact, close bonds are common. But keep your eyes open for anything that seems to step over the boundaries of professionalism. Watch and listen for signs that your loved one is becoming emotionally involved with or dependent on his or her caregiver, such as talking about the caregiver all the time or seeming to consider that relationship more important than friendships or family ties.

 

Why it’s worth worrying about:

Typically, thieves planning a scam will gradually “prime the pump,” seducing an elderly target with greater and greater shows of affection until he or she becomes emotionally dependent on the caregiver. “It can start very subtly: touches on the arm, little gifts, shows of affection,” says caregiving author Carolyn Rosenblatt. Hugs, compliments, and attention become stepping stones to building a connection that’s overly intimate. Some concerned family members have found themselves in situations in which their loved ones bought their caregivers cars or gave other expensive gifts, paid their rent, or “loaned” them money that was never repaid.

 

What to do:

Prevention is worth a pound of cure, experts say. Loneliness and isolation leave many older adults susceptible to all manner of exploitation, from relatively small expenditures to outright fraud and identity theft. To protect your loved one, you’ll want to act on two fronts.

First, the psychological: Think about your loved one’s day-to-day interactions. Does he have opportunities for companionship other than his caregiver’s visits? Can you find a day program or other activity for him to attend, or are there others who might visit from time to time to liven up his routine?

Next, the practical: Focus on safeguarding against his caregiver gaining access to his finances. Experts recommend setting up online banking for checking, credit cards, and any other accounts, so you can monitor all activity in real time. (Most transactions post within a few days.)

If you check credit card records and discover charges that you or your loved one didn’t authorize, act quickly to protect yourselves from identity theft, says Caring.com legal expert Barbara Kate Repa. Close the account and immediately alert the company holding the account that you believe it’s been used without your authorization. Then alert one of the three major consumer credit reporting agencies and request a fraud alert. If your loved one hasn’t already signed a durable power of attorney for finances so someone trusted has authorization to access financial accounts, encourage him or her to do it now.

 

Manipulation and Missing Work

 

Bids for sympathy

Personal tales of woe are a common danger sign. If your loved one begins expressing worry and concern for a situation his caregiver has told him about, that’s your cue to get involved — and quickly. “A sister with cancer who can’t afford medical care, a child who needs dental work, a family member in another country who’s being persecuted and desperately needs to come to the U.S. — these are the kinds of scenarios we hear all the time,” says caregiving author Carolyn Rosenblatt. “The next thing you know, your loved one’s writing checks and that money’s gone.”

 

Why it’s worth worrying about:

The caregiver relationship is a professional service. If it becomes personal enough for your loved one to become involved in the caregiver’s private life, the caregiver has clearly crossed a line. Best-case scenario: The caregiver is manipulating your family member. Worst-case scenario: An outright fraud is in progress.

 

What to do:

Act quickly. You may hesitate to question your loved one’s judgment, but the caregiver, if he or she is a practiced scammer, will be counting on that. Call a family meeting and discuss the situation with all family members, including siblings who don’t live nearby. Make sure everyone is on the same page, so you don’t end up in the all-too-common situation in which family members are divided against one another or undermine one another. As many of you as possible should talk to your parent or other loved one together, explaining how concerned you are and why you need to take steps to protect him or her.

If the caregiver was hired through an agency, it’s a good idea to alert the agency to your concerns and ask them to double-check the records of the searches performed and make certain this caregiver hasn’t been accused or convicted of exploitation or fraud in the past. If the caregiver was hired independently and a thorough background check was not performed at the time, now would be the time to do some digging.

Depending on how your loved one reacts, you may wish to terminate the caregiver’s employment or set up a more careful monitoring situation in which you limit access to funds. If possible, consult a family lawyer to make sure all possible legal protections are in place, says Caring.com legal expert Barbara Kate Repa. If your loved one’s judgment appears to be seriously impaired and you’re not able to convince him or her to grant you power of attorney, you may need to consider trying to obtain legal guardianship, also called conservatorship.

 

Missing Work on Mondays

 

Some days your loved one’s caregiver seems responsible and reliable; other days — particularly Mondays or the first day back after time off — he or she goes AWOL.

 

Why it’s worth worrying about:

“This is a classic sign of alcoholism or substance abuse; people go on a bender over the weekend and then can’t make it into work on Mondays,” says caregiving author Carolyn Rosenblatt. “Unfortunately, alcoholism and chemical dependency often go hand in hand, and they frequently lead people to steal to meet their need for drugs.”

 

What to do:

Be on the alert for other signs of alcohol and substance abuse. Check the liquor cabinet and make a note of liquid levels in each bottle; you might even taste the contents to see if they’ve been watered down. Go through bathroom and kitchen cabinets and empty them of any prescription and over-the-counter medicines that might tempt an abuser. For prescriptions in current use, count the pills so you can check if doses go missing. Hide medications in a safe place or — if your loved one doesn’t need them right now — take them home with you. Keep prescription receipts and labels in a safe place, so the caregiver can’t call in refills without your knowledge.

If your caregiver was hired through an agency, report all unexplained absences and discuss the situation with the agency. If the caregiver has a history of this type of behavior with previous clients, the agency should be proactive about assigning you a new caregiver. If the caregiver was hired independently, have a frank discussion and set boundaries. Explain that you require 24 hours advance notice if he or she has to miss work, and another unplanned absence is going to be grounds for dismissal. Then stand firm. The caregiver will almost certainly use illness as the excuse and protest that illnesses come on suddenly, but don’t get sucked into that debate.

While this is happening, take all necessary precautions to protect your loved one’s cash and financial records, since a caregiver with a drinking or drug problem is a risk and a disgruntled former caregiver can be a threat.

 

By using common sense and due diligence, you can both reduce the risk of caregiver theft and minimize it’s scope.  Always pay attention and trust your feelings.

 

 

Thoughts, questions, tips?  Feel free to comment below.

 

 

Suggested Security Camera System:

Arlo Security System – 4 Wire-Free HD Cameras, Indoor/Outdoor, Night Vision

 

 

 

 

 

 

 

 

 

 

 

 

 

Recommended Reading: 

How to Care for Aging Parents (3rd Edition);  A One-Stop Resource for All Your Medical, Financial, Housing, and Emotional Issues

by Virginia Morris

 

 

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FBI Warning: Seniors Getting Scammed!

Seniors Are Getting Scammed

Older adults get scammed out of $36 billion each year. Even worse, most of this money can never be recovered. Fraudsters are stealing hard-earned savings and ruining seniors’ lives.

 

Being aware of popular senior scams helps you protect your older adult from losing money to these thieves. Here, I’ve summarized advice from the FBI about common senior scams and tips to protect against them.

 

Talk with your older adult about these scams and let them know about the warning signs. It’s better to be safe than sorry – emphasize that they’re not being rude for refusing to speak with a potential scammer. Since stolen money isn’t likely to be recovered, the key is to shut down the scams before they can do any damage.

 

Senior Citizens especially should be aware of fraud schemes for the following reasons:

 

  • Senior citizens are most likely to have a “nest egg,” to own their home, and/or to have excellent credit—all of which make them attractive to con artists.

 

  • People who grew up in the 1930s, 1940s, and 1950s were generally raised to be polite and trusting. Con artists exploit these traits, knowing that it is difficult or impossible for these individuals to say “no” or just hang up the telephone.

 

  • Older Americans are less likely to report a fraud because they don’t know who to report it to, are too ashamed at having been scammed, or don’t know they have been scammed. Elderly victims may not report crimes, for example, because they are concerned that relatives may think the victims no longer have the mental capacity to take care of their own financial affairs.

 

  • When an elderly victim does report the crime, they often make poor witnesses. Con artists know the effects of age on memory, and they are counting on elderly victims not being able to supply enough detailed information to investigators. In addition, the victims’ realization that they have been swindled may take weeks—or more likely, months—after contact with the fraudster. This extended time frame makes it even more difficult to remember details from the events.

 

  • Senior citizens are more interested in and susceptible to products promising increased cognitive function, virility, physical conditioning, anti-cancer properties, and so on. In a country where new cures and vaccinations for old diseases have given every American hope for a long and fruitful life, it is not so unbelievable that the con artists’ products can do what they claim.

 

 

What to Look For and How to Protect Yourself and Your Family

 

Health Care Fraud or Health Insurance Fraud

 

Medical Equipment Fraud:

In this fraud, equipment manufacturers offer “free” products to individuals. Insurers are then charged for products that were not needed and/or may not have been delivered.

 

“Rolling Lab” Schemes:

Unnecessary and sometimes fake tests are given to individuals at health clubs, retirement homes, or shopping malls and billed to insurance companies or Medicare.

 

Services Not Performed:

Customers or providers bill insurers for services never rendered by changing bills or submitting fake ones.

 

 

Medicare Fraud:

Medicare fraud can take the form of any of the health insurance frauds described above. Senior citizens are frequent targets of Medicare schemes, especially by medical equipment manufacturers who offer seniors free medical products in exchange for their Medicare numbers.

Because a physician has to sign a form certifying that equipment or testing is needed before Medicare pays for it, con artists fake signatures or bribe corrupt doctors to sign the forms. Once a signature is in place, the manufacturers bill Medicare for merchandise or service that was not needed or not ordered.

 

Tips for Avoiding Health Care Fraud or Health Insurance Fraud:

 

 

  • Never sign blank insurance claim forms.

 

  • Never give blanket authorization to a medical provider to bill for services rendered.

 

  • Ask your medical providers what they will charge and what you will be expected to pay out-of-pocket.

 

  • Carefully review your insurer’s explanation of the benefits statement. Call your insurer and provider if you have questions.

 

  • Do not do business with door-to-door or telephone salespeople who tell you that medical services or equipment are free.

 

  • Give your insurance/Medicare identification only to those who have provided you with medical services.

 

  • Keep accurate records of all health care appointments.

 

  • Know if your physician ordered equipment for you.

 

Counterfeit Prescription Drugs

 

Tips for Avoiding Counterfeit Prescription Drugs:

 

  • Be mindful of appearance—closely examine the packaging and lot numbers of prescription drugs and be alert to any changes from one prescription to the next.

 

 

  • Consult your pharmacist or physician if your prescription drug looks suspicious.

 

  • Alert your pharmacist and physician immediately if your medication causes adverse side effects or if your condition does not improve.

 

  • Use caution when purchasing drugs on the Internet. Do not purchase medications from unlicensed online distributors or those who sell medications without a prescription. Reputable online pharmacies will have a seal of approval called the Verified Internet Pharmacy Practice Site (VIPPS), provided by the Association of Boards of Pharmacy in the United States.

 

  • Be aware that product promotions or cost reductions and other “special deals” may be associated with counterfeit product promotion.

 

 

Funeral and Cemetery Fraud

 

 

Tips for Avoiding Funeral and Cemetery Fraud:

 

  • Be an informed consumer. Take time to call and shop around before making a purchase. Take a friend with you who may offer some perspective to help make difficult decisions. Funeral homes are required to provide detailed general price lists over the telephone or in writing.

 

  • Educate yourself fully about caskets before you buy one, and understand that caskets are not required for direct cremations.

 

  • Understand the difference between funeral home basic fees for professional services and any fees for additional services.

 

  • Know that embalming rules are governed by state law and that embalming is not legally required for direct cremations.

 

  • Carefully read all contracts and purchasing agreements before signing, and make certain that all of your requirements have been put in writing.

 

  • Make sure you understand all contract cancellation and refund terms, as well as your portability options for transferring your contract to other funeral homes.

 

  • Before you consider prepaying, make sure you are well informed. When you do make a plan for yourself, share your specific wishes with those close to you.

 

  • As a general rule governing all of your interactions as a consumer, do not allow yourself to be pressured into making purchases, signing contracts, or committing funds. These decisions are yours and yours alone.

 

 

Fraudulent “Anti-Aging” Products

 

 

Tips for Avoiding Fraudulent “Anti-Aging” Products:

 

  • If it sounds too good to be true, it probably is. Watch out for “secret formulas” or “breakthroughs.”

 

 

 

  • Don’t be afraid to ask questions about the product—find out exactly what it should and should not do for you.

 

  • Research a product thoroughly before buying it. Call the Better Business Bureau to find out if other people have complained about the product.

 

  • Be wary of products that claim to cure a wide variety of illnesses—particularly serious ones—that don’t appear to be related.

 

  • Be aware that testimonials and/or celebrity endorsements are often misleading.

 

  • Be very careful of products that are marketed as having no side effects.

 

  • Question products that are advertised as making visits to a physician unnecessary.

 

  • Always consult your doctor before taking any dietary or nutritional supplement.

 

 

Telemarketing Fraud

 

If you are age 60 or older—and especially if you are an older woman living alone—you may be a special target of people who sell bogus products and services by telephone. Telemarketing scams often involve offers of free prizes, low-cost vitamins and health care products, and inexpensive vacations.

 

There are warning signs to these scams. If you hear these—or similar—phrases from a telephone salesperson, just say “no thank you” and hang up the telephone:

 

  • “You must act now, or the offer won’t be good.”

 

  • “You’ve won a free gift, vacation, or prize.” But you have to pay for “postage and handling” or other charges.

  • “You must send money, give a credit card or bank account number, or have a check picked up by courier.” You may hear this before you have had a chance to consider the offer carefully.

 

  • “You don’t need to check out the company with anyone.” The callers say you do not need to speak to anyone, including your family, lawyer, accountant, local Better Business Bureau, or consumer protection agency.

 

  • “You don’t need any written information about the company or its references.”

 

  • “You can’t afford to miss this high-profit, no-risk offer.”

 

Tips for Avoiding Telemarketing Fraud:

 

 

 

It is very difficult to get your money back if you have been cheated over the telephone. Before you buy anything by telephone, remember:

 

  • Don’t buy from an unfamiliar company. Legitimate businesses understand that you want more information about their company and are happy to comply.

 

  • Always ask for, and wait until you receive, written material about any offer or charity. If you get brochures about costly investments, ask someone whose financial advice you trust to review them. But beware, not everything written down is true, unfortunately.

 

  • Always check out unfamiliar companies with your local consumer protection agency, Better Business Bureau, state attorney general, the National Fraud Information Center, or other watchdog groups. Unfortunately, not all bad businesses can be identified through these organizations.

 

  • Obtain a salesperson’s name, business identity, telephone number, street address, mailing address, and business license number before you transact business. Some con artists give out false names, telephone numbers, addresses, and business license numbers—verify the accuracy of these items.

 

  • Before you give money to a charity or make an investment, find out what percentage of the money is paid in commissions and what percentage actually goes to the charity or investment.

 

  • Before you send money, ask yourself a simple question: “What guarantee do I really have that this solicitor will use my money in the manner we agreed upon?”

 

  • Don’t pay in advance for services. Pay only after they are delivered.

 

  • Be wary of companies that want to send a messenger to your home to pick up money, claiming it is part of their service to you. In reality, they are taking your money without leaving any trace of who they are or where they can be reached.

 

  • Always take your time making a decision. Legitimate companies won’t pressure you to make a snap decision.

 

  • Don’t pay for a “free prize.” If a caller tells you the payment is for taxes, he or she is violating federal law.

 

  • Before you receive your next sales pitch, decide what your limits are—for example, the kinds of financial information you will and won’t give out over the telephone.

 

  • Be sure to talk over big investments offered by telephone salespeople with a trusted friend, family member, or financial advisor. It is never rude to wait and think about an offer.

 

  • Never respond to an offer you don’t understand thoroughly.

 

  • Never send money or give out personal information such as credit card numbers and expiration dates, bank account numbers, dates of birth, or social security numbers to unfamiliar companies or unknown persons.

 

  • Be aware that your personal information is often brokered to telemarketers through third parties.

 

  • If you have been victimized once, be wary of persons who call offering to help you recover your losses for a fee paid in advance.

 

  • If you have information about a fraud, report it to state, local, or federal law enforcement agencies.

 

 

Internet Fraud

 

As web use among senior citizens increases, so does their chances to fall victim to Internet fraud. Internet Fraud includes non-delivery of items ordered online and credit and debit card scams. Please visit the FBI’s Internet Fraud webpage for details about these crimes and tips for protecting yourself from them.

 

 

Investment Schemes

 

 

As they plan for retirement, senior citizens may fall victim to investment schemes. These may include advance fee schemes, prime bank note schemes, pyramid schemes, and Nigerian letter fraud schemes.

Nigerian Letter or “419” Fraud

 

Nigerian letter frauds combine the threat of impersonation fraud with a variation of an advance fee scheme in which a letter mailed, or e-mailed, from Nigeria offers the recipient the “opportunity” to share in a percentage of millions of dollars that the author—a self-proclaimed government official—is trying to transfer illegally out of Nigeria.

 

The recipient is encouraged to send information to the author, such as blank letterhead stationery, bank name and account numbers, and other identifying information using a fax number given in the letter or return e-mail address provided in the message.

 

The scheme relies on convincing a willing victim, who has demonstrated a “propensity for larceny” by responding to the invitation, to send money to the author of the letter in Nigeria in several installments of increasing amounts for a variety of reasons.

 

Payment of taxes, bribes to government officials, and legal fees are often described in great detail with the promise that all expenses will be reimbursed as soon as the funds are spirited out of Nigeria.

 

In actuality, the millions of dollars do not exist, and the victim eventually ends up with nothing but loss.

 

Once the victim stops sending money, the perpetrators have been known to use the personal information and checks that they received to impersonate the victim, draining bank accounts and credit card balances.

 

While such an invitation impresses most law-abiding citizens as a laughable hoax, millions of dollars in losses are caused by these schemes annually. Some victims have been lured to Nigeria, where they have been imprisoned against their will along with losing large sums of money.

 

The Nigerian government is not sympathetic to victims of these schemes, since the victim actually conspires to remove funds from Nigeria in a manner that is contrary to Nigerian law.

 

The schemes themselves violate section 419 of the Nigerian criminal code, hence the label “419 fraud.”

 

Tips for Avoiding Nigerian Letter or “419” Fraud:

 

  • If you receive a letter or e-mail from Nigeria asking you to send personal or banking information, do not reply in any manner. Send the letter or message to the U.S. Secret Service, your local FBI office, or the U.S. Postal Inspection Service. You can also register a complaint with the Federal Trade Commission’s Complaint Assistant.

 

  • If you know someone who is corresponding in one of these schemes, encourage that person to contact the FBI or the U.S. Secret Service as soon as possible.

 

  • Be skeptical of individuals representing themselves as Nigerian or foreign government officials asking for your help in placing large sums of money in overseas bank accounts.

 

  • Do not believe the promise of large sums of money for your cooperation.

 

  • Guard your account information carefully.

 

 

Reverse Mortgage Scams

 

The FBI and the U.S. Department of Housing and Urban Development Office of Inspector General (HUD-OIG) urge consumers, especially senior citizens, to be vigilant when seeking reverse mortgage products. Reverse mortgages, also known as home equity conversion mortgages (HECM), have increased more than 1,300 percent between 1999 and 2008, creating significant opportunities for fraud perpetrators.

 

Reverse mortgage scams are engineered by unscrupulous professionals in a multitude of real estate, financial services, and related companies to steal the equity from the property of unsuspecting senior citizens or to use these seniors to unwittingly aid the fraudsters in stealing equity from a flipped property.

 

In many of the reported scams, victim seniors are offered free homes, investment opportunities, and foreclosure or refinance assistance. They are also used as straw buyers in property flipping scams. Seniors are frequently targeted through local churches and investment seminars, as well as television, radio, billboard, and mailer advertisements.

 

A legitimate HECM loan product is insured by the Federal Housing Authority. It enables eligible homeowners to access the equity in their homes by providing funds without incurring a monthly payment. Eligible borrowers must be 62 years or older who occupy their property as their primary residence and who own their property or have a small mortgage balance. See the FBI/HUD Intelligence Bulletin for specific details on HECMs as well as other foreclosure rescue and investment schemes.

 

Tips for Avoiding Reverse Mortgage Scams:

 

  • Do not respond to unsolicited advertisements.

 

  • Be suspicious of anyone claiming that you can own a home with no down payment.

 

  • Do not sign anything that you do not fully understand.

 

  • Do not accept payment from individuals for a home you did not purchase.

 

  • Seek out your own reverse mortgage counselor.

 

If you are a victim of this type of fraud and want to file a complaint, please submit information through the FBI’s electronic tip line or through your local FBI office. You may also file a complaint with HUD-OIG by calling HUD’s hotline at 1-800-347-3735.

 

Recommended:

“The bible of eldercare”—ABC World News. “An indispensable book”—AARP. “A compassionate guide of encyclopedic proportion”—The Washington Post. And, winner of a Books for a Better Life Award. How to Care for Aging Parents is the best and bestselling book of its kind, and its author, Virginia Morris, is the go-to person on eldercare for the media, appearing on Oprah, TODAY, and Good Morning America, among many other outlets.

How to Care for Aging Parents is an authoritative, clear, and comforting source of advice and support for the ever-growing number of Americans—now 42 million—who care for an elderly parent, relative, or friend. And now, in its third edition, it is completely overhauled and updated, chapter-by-chapter and page-by-page, with the most recent medical findings and recommendations. It includes a whole new chapter on fraud; details on the latest “aging in place” technologies; more helpful online resources; and everything you need to know about current laws and regulations. Also new are fill-in worksheets for gathering specifics on medications; caregivers’ names, schedules, and contact info; doctors’ phone numbers and addresses; and other essential information in one handy place at the back of the book.

From having that first difficult conversation to arranging a funeral and dealing with grief—and all of the other important issues in between—How to Care for Aging Parents is the essential guide. Read the reviews.

 

You may also be interested in:

Elder Abuse Questions and Answers

Easy Home First Aid Kit

Preparing For Your Elderly Parent to Move In

Be Aware of Bone Diseases in the Elderly

Convincing Your Parents to Transition to Assisted Living

Assisted Living Questions and Answers

First Signs of Alzheimer’s Disease

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