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BY CLAUDIA GARY

We have all seen too-good-to-be-true investment offers, strangers claiming to be old friends, or emails promising to send a big prize if we’ll just wire them a few hundred dollars. We know better, right? But these fraudsters are persistent, flexible, and motivated. What’s more, according to USAA, veterans are among their prime targets because scammers see vets as a source of steady, U.S. government-guaranteed income.

How do you avoid being a victim?

“If you receive a financial offer or advice, especially from a third party you haven’t contacted yourself, always check with the VA or your local VSO to determine if the group is reputable,” said Rep. Thomas J. Rooney (R-Fla.). “Since I came to Congress in 2009, my office has been looking into financial scams against elderly residents in my district, particularly veterans. We have heard from dozens of victims and potential victims in my district, and we’ve heard reports of thousands of victims nationwide.”

Rep. Rooney described the components of pension poacher scams that target elderly and disabled veterans:

• Unethical financial advisors and firms promise to help veterans qualify for VA pension benefits if they divert their assets into trusts or annuities.
• The firms profit from those trusts or annuities, which are often poor investments for seniors. As a result, victims lose access to their savings in exchange for a small pension. Meanwhile, the veterans’ pension fund is drained.
• These firms further profit by charging veterans exorbitant fees and selling them additional costly services.
• Since the VA only considers net worth at the time a veteran applies for benefits, it cannot determine if an applicant has diverted assets in order to qualify.

“As a veteran myself, I am outraged by any scam against our fellow veterans, but especially those that target America’s elderly and disabled veterans,” Rooney said. “These financial predators are scamming elderly veterans out of their life savings, while undermining the VA pension program for the veterans who rely on it.”

DAMAGE CONTROL

Because the scams seem to mutate as quickly as viruses, no one is immune. If you get scammed, it’s crucial not to let embarrassment get in the way of reporting the incident and to seek immediate help from law enforcement, governmental, and other resources.

Gideon Y. Schein, co-founder of Eddy & Schein In-Home Administrators for Seniors, has worked as a financial organizer and money manager for seniors since 1998. He has encountered many cases of fraud. “I have had experience with older veterans who were subjected to a wide range of scams,” Schein said. “One was a client who was subjected to identity theft. I saw it early enough that I froze everything on the credit report and then reported it to the police, so we managed to stop it. That was the simplest case.”

Another veteran became “a target for everyone,” he said, “Nigerian and Jamaican scams, psychics, investment schemes, and so on. He was also subjected to an impostor scam by so-called ‘friends,’ who may even have met him on the street. They ingratiated themselves into his life, created an alleged friendship, and then came into his house with various sob stories. He was giving anywhere from a few dollars to thousands of dollars to these people. He also started playing the lotto and replying to every form of solicitation that suggested he could win something.”

Getting an elderly victim out of such a situation requires many resources, Schein said. “You start by getting him unsubscribed from all the telephone lists, and you report it to the local police. You will likely talk to someone attached to the fraud division. Then you can go further: If it involves any overseas activity, you need to go to the FBI. They will put you in touch with the Department of Homeland Security. Also, once you go to the police, they have to report it to the District Attorney’s office, which has a division that deals with nothing but elder fraud. Everyone has to work together to identify the perpetrators, stop them, and hopefully arrest and convict them.”

Sometimes the scams can lead to violence and elder abuse. “The veteran I described had a woman coming to his house asking for money,” Schein said. “We reported it to the police and arranged a meeting, but the minute she came upstairs and was confronted by a police officer, she maced the police officer. Suddenly, it’s not just a scam anymore; it’s violent.”

TOO EMBARRASSED TO REPORT IT?

Although Schein sees much more public awareness of the scams, “it’s very difficult to keep pace with the criminals, because their ability to transform into something else is incredible. Some are so dogged that they just keep coming until they get caught.”

When asked about the prevalence of elder fraud, Schein said that “fifteen years ago, my company didn’t have one case of this. Now we see it everywhere. But [the prosecution rate] is getting better, because more people are finally reporting these crimes. People had, for many reasons, failed to report them in the past. One reason is that they grew up in an age when politeness was important. Another is they’re embarrassed. Third, there is often a general feeling that nothing can be done, and that it’s only ‘their’ problem. Fortunately, nowadays the press, television, and the Internet have made it so that there’s a lot more familiarity with this problem.”

Other damage-control resources include the Federal Trade Commission and the local FBI office for any national crime. “There is also something called Eldercare Locator, at 800-677-1116. If it’s really out of control—if you are the person seeing this and the victim is a person with no resources or family—eventually you might have to go to the local Adult Protective Service. And as a very last resort, if the victim is truly doing this out of dementia or lacks competence completely, and nothing else works to stop him or her, there is always the possibility of guardianship—but only as a last resort.”

If you are a caretaker, Schein said, “start talking to the senior you are with about different fraud scams before they occur and keep all their information extremely private. Also, it’s important that their credit reports be checked at least once a year for each of the three major credit bureaus. Try to understand what to do if you suspect fraud, and report any fraud immediately.”

A CATALOG OF SCAMS AND RESOURCES TO COMBAT THEM

Charging for Military Records. It’s scammers—not the VA—who charge for services such as filing pension or other claims or getting military records. This and other information is available for free by contacting the VA, the National Archives (archives.gov), or your service unit.

Charity Scams. Charity fraud solicitations may misrepresent how much of your donation is actually going to veterans; they may even keep it all. You can check the status of any unfamiliar charity online through the Federal Trade Commission, the BBB, or the IRS.

Another good source of information is the Financial Fraud Enforcement Task Force. For examples of charity scams and some of the damage they have caused, click here or here.

Debt Collection Scams. The Consumer Financial Protection Bureau, with the Attorneys General for Virginia and North Carolina, recently took action against Freedom Stores, a Virginia-based business, for illegal debt collection practices against veterans and service members.

Education Scams. According to FTC attorney Carol Kando-Pineda, “Some for-profit schools may care more about boosting their bottom line with your VA education benefits. In 2010, the Inspector General of the U.S. Department of Education said that 70 percent of the agency’s current fraud investigations were focused on for-profit schools.” See www.consumer.ftc.gov/blog/veterans-dont-get-schooled and www.consumer.ftc.gov/articles/0395-choosing-college. To report a school’s broken promises, email here.

Email Scams and Phishing. Unsolicited offers via email or telephone are often attempts to obtain personal or financial information. The VA does not make unexpected telephone or email requests for personal or financial information already on file, or to announce program changes. Any official correspondence will come by U.S. mail. If you receive such a call or email, do not provide any information before calling the VA at 800-827-1000 to verify the request.

Foreclosure and Impostor Scams. According to USAA, “Foreclosure-prevention scams are aimed at those in the worst possible position to be scammed.” In impostor scams, USAA says, a “con artist, claiming to be someone you know or trust, encourages you to send money or share personal information.” [Read more]

Job and Work-From-Home Scams. According to AARP, “On Internet job boards, fraudsters advertise phony positions, sometimes specifically trying to recruit veterans, in an effort to glean personal or financial information for identity theft.” [Read more]

To receive alerts about new scams, subscribe to aarp.org/fraudwatchnetwork

Loan Scams. Payday loans, car loans, and cash advances can carry interest rates as high as 36 percent, even for military personnel and veterans. Consider, instead, getting financial help from a military aid society. [Read more]

Romance Scams. Scammers pose as active-duty or retired military personnel to request money from lonely veterans. [Read more]