Senior with white hair wearing a red sweater lying on the couch reading a message on their smart phone.

Retirement scams to watch out for

Written by:
November 25, 2019

Retirement scams to watch out for

Scams are on the rise. In 2018, the Federal Trade Commission announced it had collected 1.4 million fraud reports and that people had reported losing $1.48 billion to fraud—a 38% increase over the previous year. Younger people reported losing money to fraud more often than older people, with 43% of responders in their 20s confessed to losing money to scams. Only 15% of those in their 70s reported the same thing, but older people tended to lose more: The median loss for individuals in their 70s was $751; it was $400 for people in their 20s.

Senior citizens targets for fraud for many reasons, according to the FBI. First, seniors often have large "nest eggs," own their own homes, or have good credit, making them appealing targets for con artists. In addition, seniors may take longer to realize that they've been scammed and they take longer to report it, both of which make it easier for scammers to succeed. Finally, individuals who grew up during the 1930s, '40s, and '50s tend to be more polite and trusting, characteristics fraudsters exploit.

In light of this, Stacker rounded up 20 retirement scams seniors should watch out for. Using independently verified sources, we highlight some of the most common and dangerous scams that target the elderly. From Medicare scams, to reverse mortgage scams, to counterfeit anti-aging product schemes, these scams can be both financially and emotionally draining.

Those who believe they have been victimized by a scam should file a complaint with their local police department, as well as with the Federal Trade Commission. A complete list of where to report scams, based on the type of fraud involved, can be found on

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Medicare Beneficiary Identifier scams

To cut down on Medicare scams, the federal Centers for Medicare & Medicaid Services rolled out new cards for beneficiaries earlier this year. These cards no longer display beneficiaries' Social Security numbers; instead, they bear a random Medicare Beneficiary Identifier (MBI). However, scammers still are finding ways to gain users' personal information—such as asking you for your MBI to "activate" the card, or offering a plastic upgrade from the paper card that's sent out as long as you provide personal information (Social Security numbers, birth dates).

Don't fall prey to this scam: Know that Medicare employees will never call you without being invited to do so and that your insurance coverage cannot be canceled simply because you don't provide vital information over the phone.

Instagram scams

Social media is a popular place for scammers to run their cons, especially those that target older users who might not be tech-savvy. For example, scammers who use Instagram will view the photos and videos you like and accounts you follow, and then try to hook you with a scam based on your interests. If you follow accounts that post photos exclusively of Paris, for example, someone might send you a direct message offering cheap tickets to the city. But when you click on the link to claim your tickets and provide your personal or banking information, the link will steal it. The best way to avoid this scam is by not responding to any unsolicited direct messages or to direct messages coming from individuals you don't know.

Funeral frauds

Many older Americans will prearrange or prepay for their funerals to save loved ones from additional financial and emotional burdens. Knowing this, scammers will often overcharge for their services or listing themselves as the financial beneficiary of an individual. Laws regulating the industry vary state to state, but shrewd individuals can ensure they won't be scammed by shopping around, reading all contracts and purchasing agreements carefully, and making sure cancellation terms are explicitly spelled out before signing.

Counterfeit prescription drug scams

Using targeted ads, scammers may post ads for prescription drugs at super-low prices. Buyers should be aware that these drugs may be contaminated, have no active ingredient, or include the wrong dosage of active ingredients. Avoid being scammed by not purchasing medications from unlicensed pharmacies or those without the Verified Internet Pharmacy Practice Site (VIPPS) seal. Examining the product closely and asking your doctor or pharmacist about any concerns are other ways to make sure you aren't putting dangerous medications into your body.

Social Security Administration phishing scams

Many seniors use the my Social Security portal to access their Social Security benefits and manage their personal information. Scammers who know this have begun sending "phishing" emails that contain malware to steal personal information or coerce individuals into providing it willingly. These emails often warn retirees that something is wrong with their account and that it will be frozen if they don't act immediately. Before clicking any links or sending any personal information, be sure to check the URL included in the email—real government websites only end in .gov or .gov/. Anything else is a scam.

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Telemarketing scams

Telemarketing scams vary, but the core of the scams is almost always the same: You'll receive an unsolicited call from a company, public utility, or government agency claiming that you've either won a prize, qualified for a steep discount on a product, or that there's a serious problem.

The scammer will pressure you into acting now to get you to provide vital personal information that will allow them access to your bank accounts, or convince you to wire them money directly. These scams can be hard to identify, but general hallmarks include pressuring you to act faster than you'd like, not answering questions, and offering you deals that are too good to be true.

Charity scams

In a similar vein to telemarketing scams, charity scams solicit money for fake charities, usually via telephone. To ensure you aren't being duped into lining someone's pockets rather than helping a good cause, always research a charity before donating (websites like Charity Navigator are great for this), and never donate with cash, gift cards, or via wire transfer. In addition, make sure you know exactly how a charity plans to use your donation—ask for specifics and be wary of sentimental claims.

Advance fee scams

Also similar to telemarketing scams, advance-fee scams can take many forms. Usually, they require an individual to send a little money "upfront," in anticipation of receiving something of much greater value, like found money or investment earnings. To make sure you don't fall victim to advance fee scams, avoid offers that sound too good to be true or business that is handled in unprofessional ways (i.e. dropping an envelope full of cash at a specific destination).

Vacation rental scams

Many seniors choose to spend their retirement traveling, which can lead to falling prey to vacation rental scams. Scammers will concoct an entire vacation rental listing, down to the details, promising great amenities or a lower-than-normal price if you book now. Then, when excited vacationers show up at the property, they find it doesn't exist. Watch out for super-cheap rates in prime locations, make sure to get a copy of the contract before sending money, and never wire money to cover the rental fee.

Computer technical support services scams

In 2018, the Federal Trade Commission began warning the public that computer technical support service scams were on the rise. In these scams, cons claiming to be from well-known technology companies call targets (often seniors), claiming that their security software had expired, leaving them open to hackers who could steal their personal information. They then sell them overpriced, outdated security software, and steal the target's personal information themselves as they are installing it. Asking lots of questions, not being rushed into anything, and doing independent research are the best ways to avoid this scam.

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Fraudulent anti-aging product scams

The volume of fraudulent anti-aging products entering the United States is increasing, according to the FBI. These products, usually sold online, generally come from businesses headquartered outside the country and can include dangerous ingredients like arsenic, beryllium, high levels of aluminum, and dangerous levels of bacteria from sources like urine. To avoid wasting money on products that don't work and could be dangerous to your health, be aware of claims that sound too good to be true, do your research, and consult a doctor before using anything (especially if the product is one you ingest).

Home repair scams

An in-person scam, fraudsters may appear on your doorstep posing as repairmen and offering their services to fix something they've just spotted, like broken gutters or clogged drain pipes. After you've agreed to the work, they'll demand payment upfront, perform some unlicensed and/or shoddy work, and then reveal that the problem was more serious than they'd initially thought and that you'll have to pay more for them to finish the job. Retirees can avoid being scammed by demanding to see a repairman's references, signing a contract before any work has been completed, and not accepting unsolicited offers of work.

Reverse mortgage scams

Reverse mortgage scams are perhaps the most prevalent and dangerous scams aimed at senior citizens. These cons, run by real estate and financial professionals, intend to steal equity from older homeowners or coerce them into unwittingly stealing equity from flipped properties. To avoid these scams, seek a housing counselor licensed by the U.S. Department of Housing and Urban Development before signing or agreeing to anything. Also watch out for unsolicited advertisements, never sign something you don't understand, and be wary of anyone claiming you can do fantastic things (like own a home without a down payment or accept payments for a home you never purchased).

High-yield investment scams

Phony investment scams often play on retirees' fears that they won't have enough money to fund their retirements. High-yield investment scams, often run on the internet, promise investors incredible returns of 30% to 40% daily, weekly, or monthly. The U.S. Securities and Exchange Commission warns the public that offers to invest in "high-yield investment programs" are almost always scams and should be rejected.

Multilevel-marketing scams

Some retirees may wish to make a little extra money by starting a small business from home. In doing so, they are positioned to fall victim to multilevel marketing (MLM) scams or pyramid schemes. These scams, which require you to sell a low-quality or non-existent product while simultaneously signing up others to do the same thing, often end up costing you more than you could ever make from them. Watch out for unfounded and over-the-top product claims, pressure to buy and stock inventory, and low BBB ratings—and steer clear of any businesses that give you a generally unsettled feeling.

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Sweepstakes scams

Winning that dream vacation, new car, or brand-new grill may sound like a dream come true—until it isn't. Sweepstakes scams alert victims that they've won a sweepstakes or lottery and that they just need to provide some personal information or send a small amount of money to cover the taxes and fees to claim their prizes. In reality, there are no prizes, the money is going straight into a scammer's pocket, and that personal information can now be used to steal your identity or hack into your bank accounts. Be wary of sweepstakes that require you to send money to claim a prize (especially money that must be sent via wire transfer), prizes for contests you don't remember entering, and winnings from foreign lotteries.

Rolling lab scams

Many seniors rely on mobile diagnostic labs for their medical tests. While these rolling labs make health care more accessible, they can also be the sites of major health insurance scams. Some of these labs provide fake or unnecessary testing before billing health insurance companies for expensive procedures. Victims can be left with drained coverage, increasing co-pays, and false medical records, all things that can take financial and emotional tolls. To avoid these scams, be sure to keep detailed records, review billing and summary statements, and know what your insurance does and does not cover.

Grandparent scams

Preying on grandparents' love for their grandchildren, so-called grandparent scams usually involve a con artist posing as a target's grandchild. The con artist will call the target on the phone and explain that they're in a lot of trouble, desperate for money to cover some last-minute bill, bail, or other made-up expense, and need a wire transfer immediately to get out of the jam. To ensure you aren't getting scammed, and to avoid losing a large sum of money, be sure to call the "relative" on the other end of the line at a known phone number or verify the story with another family member before acting.

Social Security Advisory Board scams

In May 2019, the inspector general of Social Security warned about a new government employee impersonation scam involving the Social Security Advisory Board. The scam begins with an individual receiving a phone call that displays the board's phone number. Then, during these calls, a scammer tries to obtain that individual's personal details, such as their Social Security number, birth date, address, etc. The inspector general emphasized that the board never contacts the general public over the phone to collect information and that government employees never take a threatening stance. If either of these things happens to you, hang up because you're being scammed.

Sweetheart scams

In sweetheart scams, con men pose as loving, attentive, potential suitors online, earning the trust of their targets and creating the illusion of happy, normal relationships. Playing on their targets' trust, scammers convince individuals to turn over banking information, or other personal information, before draining the accounts and vanishing. The best way to avoid this scam is to never send money to someone you haven't met in person no matter how much you may care for them.

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