Reuters Money

Elder financial abuse reaches “epidemic” proportion

For the past 30 years Jenefer Duane has seen older Americans fall victim to financial scams. But in recent years she has watched the problem get far worse.

“Elder financial abuse has grown to epidemic proportions,” she said.

Actor Mickey Rooney, now in his 90s, elevated the profile of the problem earlier this year when he won a restraining order against his stepchildren. He claimed they used intimidation to get access to his money and later told Congress how that can happen to a vulnerable senior.

Duane, who has led the San Francisco-based Elder Financial Protection Network for more than a decade, said the aging population has made more seniors a target for scam artists and, sadly, members of their own families. “The fact is that they’re living longer and are more dependent on support,” she said.

A study released this week by the MetLife Mature Market Institute found that nearly $3 billion a year is being lost to elder financial abuse. That’s 12 percent higher than in 2008.

Scams and fraud targeting the elderly are increasingly a problem, Duane said. Seniors are often pitched financial products they don’t need including reverse mortgages and annuities. “The prey on isolation and loneliness or diminished capacity,” she said.

Indeed, more than half the cases of elder abuse in the MetLife study involved strangers, the report found. About one-third of the alleged perpetrators were family, friends or neighbors.

Beware of sites that charge to change addresses

When you move, it’s pretty much expected that you’re going to change your address. Back in the day, it was understood that you filled out a little card at the post office and that was it.

You can still do that, but with the Web and all why bother — when you can just go online? Unfortunately, that has spurred some sites that look to misdirect you and capture your address information AND charge you. It’s not clear whether they actually file the address change for you, but it shouldn’t cost you $20 or $30 — the going rate on these sites.

One such site is www.usps-change-address.com. When you land there you see a “Change of address form.” It all looks normal until you reach the point where you get charged for this service.

Complaints have begun to mount against this site and some local postal officials have warned against using any site that profits from changing your address. A query about what consumers get for the charge beyond what they’d get for free was submitted through the site — the only contact information listed — but yielded no response.

The URL has existed since January, according to its domain registration, which obscures the ownership of the site by using a proxy service. Complaints started rolling in soon after and accelerated in March and this month.

The company has a D-  rating from the Better Business Bureau, which noted the accumulating complaints.

It makes sense that people would try to profit from address changes. The U.S. Postal Service said that it processed 41.5 million address changes in 2010.

Email theft: Is your company sorry?

What do Tastefully Simple, Hilton, Chase, Kroger, AbeBooks, 1800Flowers.com and Ethan Allen have in common? They’re among the dozens of companies doing business with marketing giant Epsilon forced to alert customers of a privacy breach.

How did they tell them? By email, of course. Did they apologize for the worry and the bother? Some did.

Prism Money analyzed email communications from more than 20 companies. One of the nicest apologies came from BeachBody.com: “We regret that this incident has occurred and apologize for any inconvenience this may cause you.”

Others expressing sorrow or regret include Brookstone, Ethan Allen, Walgreens, Kroger, Tastefully Simple, Disney Destinations, Target and Chase. Among those not apologizing: Hilton, AbeBooks, Citi and HSN.

Does it matter?

“Offering an apology is always good idea,” said Ed Tagliaferri, executive vice president at DKC Public Relations in New York City and an expert in crisis communications. “You’re obviously sorry that a problem occurred and had a negative impact on your customers, so why not say that? It conveys that there is a human side to your company, you appreciate the trouble that has been caused and you’re taking the matter seriously.

“An angry consumer can view no apology as a sign of buck-passing, insensitivity, or arrogance. But with that apology, it’s also important to make clear you’re looking into why the incident occurred and taking steps to make sure it doesn’t happen again.”

Email theft: 5 ways to avoid phishing attacks

With the extraordinary theft of millions of email addresses collected by some of the nation’s biggest companies, it’s time to think about the likely result — phishing attacks — and how to avoid becoming a victim.

If you have accounts with Citigroup, Capital One, The College Board, Walgreen, HSN or TiVo there’s a reasonable chance some con artist is trying to figure out how to get in touch with you — and not to be Facebook friends. They want to dupe you into giving them more information than they have right now.

Here’s what they’ve got: Your name (maybe just your first name) and your email address. Here’s what they want: The good stuff like your home address, phone number, Social Security Number and — of course — account numbers. Now they’re going to release a hailstorm of somewhat targeted emails intended to get you to believe they’re real, perhaps even referencing the theft itself.

Don’t just assume you’re too smart to become a victim. Thousands of consumers every month fall victim. These are not just people who are gullible or lack web savvy.

All sorts of people fall victim because the crooks have gotten very sophisticated, perfectly (sometimes) mimicking real communications from companies you do business with.

The big difference — and what you need to watch out for — is that the phishing emails are going to be angling for information from you. The real companies would never ask you for that kind of information in an email. Sometimes their attempts to con you will be well masked, like asking you to click on a link to go to their site to “update” your account information or some such rouse. Here are five ways to avoid phishing attacks.

Don’t click links in your emails. In most browsers, you can run your mouse over a link to see where it really goes. The crooks will often create URLs intended to confuse you — instead of yourbank.com/accounts they might use yourbank/accounts/and hide the real URL somewhere way over to the right.

FTC gets court order to shut down timeshare scam

A telemarketing operation that preyed on timeshare owners desperate to dump their properties was shut down after the Federal Trade Commission won a temporary restraining order in U.S. District Court in Tampa, Florida, the agency announced today.

The government alleged that tens of thousands of unsolicited calls were placed by St. Petersburg-based Vacation Property Services, Inc. and two related companies since 2006 that pitched the idea the businesses could get them buyers for their properties. In exchange for getting a promise quick sale — they said they had buyers ready to make a deal — the property owners were asked to send payments of $200 to $8,000.

Telemarketers even offer phony congratulations to the victims, the government said in court filings. When they questioned the fees, they were told they were to cover sales-related costs including a title search and processing fees.

After the payments were made, the FTC said, it became clear there were no buyers lined up. When the timeshare owners complained and asked for refunds, they were ignored or rejected, the court filings said. They led consumers to lodge hundreds of complaints against the telemarketing companies.

The FTC also charged the company with making hundreds of thousands of telemarketing calls between November 2009 and November 2010 to people registered on the national Do Not Call list — a violation of federal law.

In addition to Vacation Property Sellers, Timeshare Experts, Higher Level Marketing, (dba Vacation Property Services) as well as principals Albert M. Wilson, David S. Taylor and Frank M. Perry, Jr. were named in the court order. Wilson and the same companies were named in a series of complaints and subsequent settlements with the Florida Attorney General — in which the businesses agreed to stop the the practices the FTC cited. That was in 2007 and 2008.

These types of scams have proliferated in recent years as the timeshare resales market collapsed during the economic downturn. The FTC shut down a similar operation, Timeshare Mega Media, in the fall. That outfit was operating from a Fort Lauderdale-area boiler room that took in millions from timeshare owners.

Homeowners, don’t be fooled by this foreclosure scam

Looming foreclosure can be one of the scariest times for any family down on its luck. So, it stands to reason that crooks would design scams to target that vulnerability and try to squeeze whatever money these people who can’t pay their bills can scrape up.

The state of California has issued a warning about a scam that involves getting these vulnerable homeowners to pay fees up front with the idea of winning a lawsuit that will get them their homes free and clear. The cost to participate in this heavily marketed scam is $5,000.

The scam is particular elaborate since a federal ban went into effect earlier this year against requiring up-front payments to those offering mortgage relief. Rules being what they are, there is an exception to it — for lawyers. While the terms are a bit more specific than that, it opened the door to people supposedly working on behalf of lawyers to still preying on those whose homes are being foreclosed.

“Those who continue to prey on and victimize vulnerable homeowners have not given up,” the warning by Wayne S. Bell, chief counsel of the California Department of Real Estate, says. “They just change their tactics and modify their sales pitches to keep taking advantage of those who are desperate to save their homes. And some of the frauds seeking to rip off desperate homeowners are trying to use the lawyer exemption above to collect advance fees for mortgage assistance relief litigation.”

Those running the scam are making claims across the country, using the web as their vehicle in many instance, to try to sell these folks on the idea they will not only not lose their home to the bank, they’ll win full ownership.

The scammers try to convince their targets that they will be participating in a “mass joinder” or class-action lawsuit. Here are a few of the claims being made that were highlighted by California officials:

• If you join in the suit, you can remain in your home and stop paying your mortgage.
• When the lawsuit is filed, your obligation to the bank ends.
• Lawyers are “turning the tables on lenders and getting cash settlements for homeowners”.