Elder Abuse -
Consumer Scams and Fraud
Unfortunately, many different scams target the elderly. Those who
have been victimized are not only stripped of their dignity, but are
often swindled out of their life savings. The following information
will describe how some consumer scams and fraudulent schemes operate
and how you can protect yourself.
Fraudulent telemarketers who know an elder is likely to have
retirement savings, good credit, and the time to talk on the phone
often victimize seniors. Many telemarketers are very aggressive,
persuasive, and intimidating. Keep in mind: if it sounds too
good to be true, it probably is. You have the right to refuse
calls from telemarketers. Just say "no" and hang up the phone.
Note: Often a person who has sent money to a fraudulent
telemarketer will continue to get telemarketing phone calls.
Fraudulent telemarketers have been known to sell lists of easy targets
to other scammers placing those victims at risk for further abuse.
- Prize and Sweepstakes Fraud:
- If the first thing you hear from a telemarketer is,
"Congratulations! You have just won a ____ (trip to Las Vegas,
$5,000 prize, etc.)," be careful. They often want your
- When youíre told to send money in order to claim your prize or a
sweepstakes requires you to buy a product in order to receive your
prize. As a common rule, never buy anything over the phone
unless you initiated the call.
- If you are asked to call a "900," "976" or other unknown
telephone number in order to claim a prize. Making such calls can
result in a very expensive phone bill Ė one that you will be
responsible for. In California, it is a crime to require a person to
call a "900" or "976" telephone number in order to collect a prize.
If this happens to you, immediately report it to the L.A. County
Department of Consumer Affairs at (213) 974-1452.
When to suspect a telemarketer may be up to no good:
- When the telemarketer does not give you their telephone number
and name when you ask for it and quickly changes the topic so as to
- When the telemarketer uses pressure tactics, telling you the
award expires today unless you act immediately;
- When the telemarketer asks you for your social security number,
birth date, or credit card number;
- When the telemarketer asks you to "wire" the money as soon as
possible to ensure you receive your prize or limited-time only
Remember, you can always say, "Iím not interested, good-bye."
- Pyramid and Ponzi Schemes:
A pyramid scam works by recruiting people to pay money to
participate in an investment scheme that has minimal or no legitimate
purpose. The objective of most pyramid schemes is to recruit people in
order to pay back those at the top of the pyramid. Eventually, no more
investors are willing to participate and those at the bottom of the
pyramid Ė typically the most recent investors Ė lose out. The Federal
Trade Commission has reported that almost 90% of investors lose
money through pyramid schemes.
Ponzi scams are "get-rich-quick" investment frauds. Promoters often
use the early investorsí own money to pay back bogus profits. This
encourages the investors to put up even more money and recruit friends
to also make a qui1ck profit. Rather than invest the money as
promised, the promoter eventually disappears with it.
Many of these "get-rich-quick" scams target the elderly because of
their available income and time. Both pyramid and ponzi scams are
illegal. Both schemes usually fold quickly, leaving most victims with
less than what they started with.
Protect yourself and beware:
- Be suspicious of any offer to make money by recruiting others,
particularly combined with promises of earning huge profits while
working at home with little effort. Again, if it sounds too
good to be true, it probably is.
- If the salesperson is overly aggressive in recruiting you, it
may be a desperate attempt to recover some of the money already paid
to those higher on the pyramid. Donít be pressured into
investing in a business, especially if you are asked for a large
- Before signing a contract or writing a check, consider
consulting with a trusted family member, friend, or financial
- If someone wants you to invest in securities or commodity
investments, you can verify if such a company exists. The
California Department of Corporations [(213) 576-7500]
can tell you if the investment company is a registered corporation.
If the corporation does not appear to exist, the securities,
land, or commodities they offer also may not exist.
- Be wary of Internet investing with a company you donít know.
It can be extremely difficult to trace where your money went,
especially if the Web page disappears.
When to suspect an investment opportunity may be no good:
- A salesperson offers you a business opportunity involving the
sale of a product, but charges you a substantial start-up fee in
order to sell the merchandise or service. Most legitimate
companies do not charge their sales force in order to sell their
- A salesperson invites you to invest in his company, pays you a
quick return, and encourages you to invite your friends to also
invest. To lend credibility to the scheme, some early investors
may even be repaid their original investment on demand. Be
leery of any offer to make money by recruiting others.
- Be wary of bold representations claiming that the investment
is legal. Rarely do legitimate companies make such claims up
front. They donít need to!
Criminals engage in numerous fraudulent charity scams that exploit
and capitalize on the kindness of strangers, especially seniors. All
legitimate charitable organizations are registered. To make sure your
money is going to the good cause you intended it for, check with the
California Registry of Charitable Trusts
P.O. Box 903447
Sacramento, CA 94203-4470
BBB (Better Business Bureau) Wise Giving Alliance
4200 Wilson Boulevard, Suite 800
Arlington, VA 22203
A listing of charitable organizations can be found at:
If the charitable organization is legitimate, its representatives
will give you the opportunity to confirm that it is a bonafide
charity. Aggressive pressure tactics are often signs that the
charitable organization may be fraudulent.
Things to consider:
- A fraudulent charity may have a very legitimate sounding name,
but that does not mean it sends any money to the cause it
represents. Some fraudulent charities intentionally have names that
are very similar to well-known charities so as to confuse would-be
donors. Ask to review written materials on the charitable
organization before donating. Legitimate charities willingly
send informational material to prospective donors. Always
double-check with the registries above to make sure the charities
- Scam artists may falsely claim to be well-known charitable
organizations (like the American Red Cross or United Way) or to be
affiliated with such charitable groups when in fact they are not.
Ask them to whom your check should be made. If youíre
told to make the check out to a business of some kind rather than
the well-known charitable organization, donít do it. Likewise, if
youíre asked to write the check out to an individual, donít do it.
When to suspect a so-called charitable organization may be up to
- The charitable organization insists on having you pay over the
phone with a credit card or asks for your checking or savings
account numbers. Do not give strangers personal information
that will give them access to your money. As a general rule,
only give people your credit card or bank information if you
initiate the call and have checked that the organization is a
legitimate charitable business.
- The charitable organization tries to entice you by telling you
that they will give you a gift if you donate. Charities need to
raise money, so they usually are not in the business of giving
prizes or gifts. Trust your instincts, if it doesnít make
sense, it may not be a legitimate charity.
FRAUDULENT LIVING TRUSTS
Fraudulent businesses and unethical individuals are taking
advantage of the current consumer trend of placing assets in living
trusts to avoid probate. Many scam artists tell seniors that "living
trust kits" can save them thousands of dollars. In reality, these kits
often are very costly, lack proper instructions, and simply may not
fit your financial planning needs. An attorney or a financial
planner whom you trust is best suited to evaluate whether a living
trust is appropriate for you.
- A salesperson pressures you into creating a living trust after
asking you only a few questions about your assets and will. It is
impossible for any salesperson to make a legitimate determination as
to whether you should create a living trust based on only a few
minutes of conversation. Remember, you have the right to end
the presentation or hang up the phone at any time.
- A salesperson avoids answering direct questions about the costs,
fees, and withdrawal penalties associated with the living trust.
If your questions are not answered or if the answers are unclear,
do not sign any documents. Reputable businesses make their
services and fee policies as clear as possible. Vague or unclear
answers are often signs of fraud or possible future problems.
- A salesperson or phone telemarketer wants you to decide right
away, rather than letting you talk to your family or close friends.
- Shortly after creating your living trust, you begin receiving
offers in the mail to liquidate or convert your assets in the trust
for an exorbitant fee. The living trust company may simply be
looking for a way to take more of your money. Any offer to
liquidate or convert your assets should be reviewed by an attorney
or a financial planner.
Door-to-Door Sales and Home REPAIR FRAUDS
Criminals know that seniors may be retired and at home during the
day. As a result, many scam artists target elders at home. As a
general rule it is good to be very cautious with any salesperson or
contractor who solicits your business out of the blue.
- A contractor or repair person says, "We want to check your
_______ (heater, air conditioner, roof, plumbing, etc.) for
free to make sure itís in good condition." Con artists may also try,
"I just did a repair at your neighborís house and I have some
leftover supplies. If you want I can do the same work for you for
dirt cheap." Unscrupulous contractors use such ploys to get into
your home, make simple inspections, and then suggest unneeded
costly repairs. Get a second opinion before making any
costly repairs, especially if you did not initiate the contractorís
first visit to your home.
- A door-to-door salesman tells you he or she has a gift for you
as long as you give him a few minutes of your time. This scam
enables dishonest salespeople to get into your home in order to
pressure you to buy what they are selling.
- The oral sales presentation is done in your language, but the
written contract is given to you in another language. Never
sign anything you do not understand.
When to suspect a door-to-door salesperson or contractor may be up
to no good:
- He insists on reading only key portions of the contract aloud to
you or tells you there is no need for you to read it. If they
have nothing to hide, they will let you read the entire contract and
let you ask questions.
- The salesperson has no form of identification or the contractor
or repairperson cannot prove that they are licensed to do the needed
work. Even if proper identification or a license is provided,
it does not mean you are dealing with a legitimate business.
Honest business people will offer you their business cards and
give you time to decide whether you want their product or service.
Ask for and check their references.
- The contract is mostly handwritten and may be so sloppy that it
is difficult to read key sections. If itís not readable, you
should not sign it.
- The salesperson or contractor tells you that you must act today
or their offer is off. Unethical salespersons often use pressure
tactics to close a deal. If they want your business, the offer
should remain on the table for a reasonable length of time.
All offers or estimates should be in writing. Always ask them if you
will have some time to change your mind and cancel the contract even
after you sign it.
- If you feel you may be a victim of fraud and would like to
explore your civil legal options, contact Public Counsel Law
Center at (213) 385-2977 or Bet Tzedek Legal Services at
Seniors may also be susceptible to what are known as "sweetheart
scams." These cons are much like other consumer scams, except what
these con artist are peddling is their time and affection Ė all in an
attempt to get the victimís money. Often, they promise a love
relationship, but seldom do they follow through. Meanwhile, the
victimís confidence is gained, the con artist begins to tap and
exploit the senior for money, personal expenses, car repairs, etc.
Once they get what they want, the scam artists often disappear,
leaving the senior feeling exploited and ashamed.
- A stranger approaches you at a store, library, park, or another
everyday setting and quickly shows interest in you and seems to want
to spend time with you. He or she may be trying to pull a sweetheart
scam. Be particularly careful if the interested person is much
younger and appears too eager to go out with you, especially since
you just met.
- You go out on a date with someone new, and they soon ask you to
help them financially.
AUTO SALES FRAUD
Seniors often are the target of unethical auto dealers. These scam
artists frequently conceal the poor condition of used cars or lure
consumers with advertisements of cars they donít have or do not intend
to sell. When the customer asks for the advertised car, he or she is
told the car was "just sold." Having the customer at the dealership,
the salesperson then persuades the customer to buy a more expensive
vehicle ("bait and switch"). Other dealer scams include attempting to
inflate the interest rate at the time of financing, and/or adding
unnecessary items to the purchase price of the car (extended warranty,
paint protectant, etc.).
Protect yourself and beware:
Make sure the terms of the car loan and your car payment amount
are as promised. If the car dealership changes the terms of
its offer at the time of signing the sales contract (price
increased, interest rate jumps, etc.), leave the
dealership immediately. A tip: Never demonstrate your
enthusiasm for a vehicle until the car is yours.If a salesperson says you can qualify for a car that appears
beyond your budget, clarify whether the dealership is offering
a sales or lease package. If you are leasing a vehicle, the
terms of the lease should be explained, particularly:
- Always review the vehicle sales contract before signing it.
- the length of the lease,
- costs you may incur for damages or repairs upon returning the
- and the penalties for going over the annual mileage limits.
- If a salesperson or friend asks you to sign as a "co-signer," be
advised that you will be fully responsible for the car payments
regardless of whether you ever drive the car.
- If you negotiate the terms of the contract primarily in Spanish,
you are entitled to a Spanish translation of the contract. Ask for
When to suspect a car dealership may be up to no good:
- A salesperson asks you what monthly car payment amount youíre
seeking. To protect yourself, always focus the deal on the
total price of the car, not on monthly payments that appear to
minimize the vehicleís cost.
- A car salesperson tells you the dealership will not honor the
offer if you walk away. Do not be pressured into buying a car
you are unsure about. Talk to friends or family about the vehicle
offer before signing the sales contract. Think about it.
Under California law, once you sign the sales contract, the car is
yours, with very few exceptions, such as cases of odometer fraud and
salvaged vehicle title.
- If you feel you may be a victim of fraud and would like to
explore your civil legal options, contact Public Counsel Law
Center at (213) 385-2977 or Bet Tzedek Legal Services at
AUTO REPAIR FRAUD
In order to take your money, unscrupulous mechanics may falsely
claim that your vehicle needs expensive repairs. Often mechanics scare
seniors into believing their vehicle is unsafe and needs immediate
repair. For example, what was supposed to be a simple oil change
suddenly becomes a major tune-up or costly brake job.
- An auto mechanic refuses to give you a written estimate for the
cost of repairs. As a general rule, you should always get a
second opinion on the vehicleís repairs. Donít be intimidated into
making an over-priced or unnecessary repair.
- An auto mechanic tries to pressure you into car repairs by
telling you that it is unsafe to drive the vehicle off his property.
Use your judgment. Aside from an overheated engine, a flat
tire, or very bad brakes, you can probably drive your car to another
local mechanic to get a second opinion. If you feel your car
is unsafe, you can have it towed to the nearest mechanic of your
- An auto mechanic claims you need to replace some parts, but
insists that they need to keep the original parts. If the auto part
truly needs replacing, the part is useless and no one should have an
interest in keeping it. Unless your repair is through a
vehicle extended warranty, there is no reason why you cannot get the
original parts back. If you suspect fraud and would like to
file a complaint, call the Bureau of Automotive Repair at
One of the fastest growing frauds Ė identity theft Ė can be
financially and emotionally devastating. The identity thief attempts
to obtain your personal information, such as your birth date and
credit card and Social Security numbers. With this information, the
imposter can assume your identity and establish credit or bank
accounts in your name. Seniors can be victimized by unscrupulous
caregivers or others who can steal mailed credit applications and
fraudulently use them and other personal information to make purchases
or borrow money.
- Shred all unwanted mail as soon as it is received, particularly
unsolicited credit applications.
- Have mail delivered to a post office box and have it picked up
on a regular basis. Never leave mail out for pick-up. Thieves can
steal your mail and gain access to your personal identification
information Ė including bank account numbers. They also can tamper
with personal checks, altering them in order to steal your money.
- Be careful about giving out personal information, including your
address, Social Security number, or bank account numbers. Provide
this information only when absolutely necessary, and only to a
business or agency you know to be legitimate. Avoid giving out this
information on sweepstakes application cards, commercial surveys, or
over the Internet.
- Immediately report identity theft to your local police station.
Law enforcement officials are required to take an identity theft
report from a local resident. California law allows a victim to send
a photocopy of a police report to the major credit bureaus so that
derogatory credit information resulting from identity theft can be
quickly removed from the victimís credit history.
- If you feel you may be a victim of identity theft and would like
to explore your civil legal options, contact Public Counsel Law
Center at (213) 385-2977 or Bet Tzedek Legal Services at
- For more information on identity theft and solutions for
victims, click here.
Fraudulent miracle cures abound and seniors are primary targets of
the quacks who peddle them. Those suffering from serious illnesses
such as cancer, arthritis, and heart problems desperately try "cures"
that are of no help and often divert them from traditional medical
treatment. Current health scams include male potency drugs, miracle
weight-loss pills, and sure-fire cancer cures.
- Discuss any health care product with your doctor or a reputable
health care professional.
- For serious illnesses, don't be pressured into buying any health
product that claims to be able to cure your illness or save your
- Be sure that the health product does not conflict with
medications you are already taking.
- Do not stop taking prescription medication without first
discussing it with your physician.
- Prior to making a purchase, ask for written details on any costs
for returning a product. Fraudulent remedies with "money back
guarantees" often include undisclosed charges.
STAGED AUTO COLLISIONS
Organized fraud rings target seniors for staged auto collisions in
several ways. These con artists can intentionally cause an accident
with a senior in order to collect on fraudulent insurance claims. Some
may then ask for cash for the alleged damages and request that the
settlement be confidential, telling seniors not to report the
"accident" because they could lose their license or insurance.
Finally, some criminals may steal money or identification cards and
credit cards from the seniorís wallet or purse at the accident scene.
Most people who are victims of staged collisions donít realize the
"accident" was staged. Auto collision stagers target seniors and
drivers of expensive cars or business vehicles. They choose victims
they anticipate have insurance and/or money to pay for the alleged
- Staged auto collisions usually involve two drivers, working
together to "swoop and squat." The "swoop" car driver maneuvers to
seemingly cause the "squat" car to stop suddenly in front of the
victim, who canít avoid rear-ending the "squat" car. (Itís called
"squat" because the car squats or stops suddenly, and the passengers
squat to minimize the impact they know is coming.) It is very
difficult to anticipate staged accidents, but you can protect
yourself by immediately calling the police when youíre involved in a
collision. If you feel unsafe or threatened, wait in your car until
the police arrive.
- Another staged auto accident involves a suspect who befriends
the elder and suggests they go for a drive along a specific route.
Along the way, the senior hits a pedestrian, who claims serious
injury. Often the pedestrian is never actually injured, but the
elder is convinced by the stranger that the accident occurred.
- Notify law enforcement of any auto collision involving injury or
death. If anyone claims to have been seriously injured, call
"911." Inform the Department of Motor Vehicles of collisions
resulting in more than $500 damage.
- Keep a disposable camera in your car. If you can do so safely,
take photographs of the vehicles involved in the collision and of
the passengers. Photo documentation is helpful in criminal
investigations and prosecution, but never put yourself in harmís way
to take the photos.
When to suspect another driver may be up to no good:
- You start exchanging information with one driver and notice that
other individuals involved in the accident are leaving the scene.
Insist on obtaining relevant identification information on all
persons involved in the collision, including their names, addresses,
phone numbers, vehicle license plate, driversí licenses, and
insurance carriers. Be suspicious of any driver or passenger
who refuses to give you his/her personal information.
- The car that hit you has lots of rubber tires or other objects
in it to cushion the occupants from the impact of the collision.
- The driver of the vehicle you hit insists on settling the matter
between the two of you without involving the police or auto
insurance. Do not be intimidated by threats of future lawsuits that
you will lose your driverís license. Play it safe and donít
give cash to anyone at an auto crash scene as a way to settle
- Soon after the collision, someone comes to your home to ask for
cash to settle an auto accident claim. Report the individual to law
enforcement immediately. Any offers to settle an auto accident
claim should be made directly to your insurance carrier.
- The other driver asks for your wallet to write down personal
information from your driverís license and insurance card.
Never give your wallet to anyone at an accident scene. In
providing identity information, display only your driverís license
and proof of insurance card. Criminals will often steal money
and credit cards from seniors at the scenes of staged collisions.
REAL ESTATE FRAUD
Most seniorsí primary asset is their home. When seniors are
victimized through mortgage loan fraud or when caretakers and others
defraud them out of title to property, elders risk losing their home
or tying up title in a legal mess.
Fraud artists search public records to find mortgage-free homes or
homes with significant equity, many of which are owned by seniors.
Posing as the homeowner, these criminals fraudulently obtain mortgage
loans and disappear with the money. When mortgage payments are not
made, the lender forecloses, which could result in the senior losing
his or her home or having to pay a lawyer to clear the title.
- If you receive a letter from a mortgage company notifying you of
a mortgage on your home that you never applied for, immediately call
the L.A. County Department of Consumer Affairs Real Estate
Hotline at 1(800) 973-3370. Also notify the mortgage company
that you did not apply for the loan. The L.A. County Real Estate
Hotline helps prevent homeowners, particularly seniors, from
becoming victims of real estate fraud.
- If you receive a notice from the County regarding the recording
of a deed, call (800) 973-3370. When a loan, lien and/or deed
to real property is recorded in L.A. County, the owner is sent a
copy of the document and a postcard with notification. If you
receive such information, read it carefully. If you donít understand
it, ask someone you trust to look it over.
- Some lenders violate consumer protection laws by targeting
seniors with offers of mortgage loans that do not fully disclose the
cost of a loan. The senior is then committed to repaying a high-cost
loan he or she canít afford and risks losing the home. The law
requires mortgage lenders to make full disclosure of all costs of a
loan and payment amounts. Never sign anything without being sure you
know the full consequences of what youíre signing. If you
have any doubts, discuss them with someone you trust.
- Do not give any personal information such as your Social
Security number to a stranger or loan salesperson. Donít give
personal identification information to a stranger on the phone or to
a loan salesperson who comes to your door. Never provide personal
information in response to a mail solicitation.
- If you are told that your loan documents are ready for "closing"
but you have not received any disclosures in advance specifying the
amounts of the closing costs and fees, do not sign any closing
documents until you have had a chance to review all the fees
and closing costs.
When to suspect a mortgage lender may be up to no good:
- You are urged to take out a second mortgage on your home in a
"canít miss deal" in order to get out of debt (from credit cards,
etc.) fast. The fraud artist submits false financial information so
that you qualify for the new loan, but then pockets your closing
costs. Now youíre stuck with unaffordable mortgage payments.
- A lenderís representative contacts you about refinancing your
mortgage. Youíre told you are under no obligation, but the
representative asks you for personal identification information
(Social Security number, etc.). Now the thief can use your
personal information to obtain a loan or other bogus credit.
- Caretakers and/or caregivers may persuade seniors to sign a deed
conveying property to the caretaker/caregiver or sign loan documents
in order to take out a mortgage against the seniorís property. The
caretaker/caregiver can then appropriate the property or money for
her or his own use. Do not take out a loan or convey property
unless trusted family members or friends agree that it should be
done and they witness the proposed transaction.
- If you feel you may be a victim of real estate fraud and would
like to explore your civil legal options, contact Public Counsel
Law Center at (213) 385-2977 or Bet Tzedek Legal Services
at (323) 939-0506.
A reverse mortgage is a home equity loan that allows homeowners to
convert some of the equity in their homes to cash while they retain
ownership. Reverse mortgages work much like traditional mortgages, but
in reverse. Rather than making a payment to your lender each month,
the lender pays you. Unlike conventional home equity loans, most
reverse mortgages do not require any repayment of principal, interest,
or servicing fees as long as you live in your home. Funds you obtain
from a reverse mortgage may be used for any purpose Ė personal
expenses or housing expenses such as taxes, insurance, and maintenance
costs. However, all reverse mortgages come with the risks
associated with traditional home mortgages Ė the main one being that
you may lose your home if you do not repay the loan.
Protect yourself and beware:
- Reverse mortgages are designed for people who are "house-rich,
but cash-poor." Because your home is such a valuable asset, you
should consult with your family, attorney, or financial advisor
before applying for a reverse mortgage.
- Although they provide a monthly payout, reverse
mortgages are rising-debt loans. Each payment will have
to be repaid with interest. Keep in mind that if you move,
sell your home, reach the end of the loan term or pass away, the
loan will become due and you or your heirs will have to repay the
loan, either in full or by refinancing the loan into a traditional
(forward) mortgage. You may even lose your home.
- One of the best protections you have with reverse mortgages is
the Federal Truth-in-Lending Act, which requires all lenders to
inform you about the planís terms and costs. The law requires
lenders to disclose the Annual Percentage Rate (APR) and payment
terms. On plans with adjustable rates, lenders must provide specific
information about the variable rate feature. On plans that provide
you with a credit line, lenders must also inform you of any charges
to open and tap the account. Be sure you understand all the
terms of the reverse mortgage and do not sign any document until the
terms have been explained to you or to someone you trust.
Elder Abuse Section
Los Angeles County District Attorney's Office
201 North Figueroa Street, 12th Floor
Los Angeles, CA. 90012
Phone (213) 580-3383
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