Here is an example of an increasingly common and still-growing scam against seniors: A woman’s children thought there should be more money in her bank account. They decided to examine withdrawals from her checking account with her, knowing that she rarely looked at monthly statements. What they found shocked the children – and the woman as well.
Statements for the past six months revealed suspicious withdrawals that amounted to more than two hundred dollars each month – withdrawals the woman had not authorized and did not know anything about. One was from an unknown vacation club. Two were from renewals to magazines that had never been subscribed to or received. The fourth was a monthly donation to a charity, with one phone call to the number on the statement revealed it was a total scam. The woman requested her bank to stop these withdrawals and block all future automatic withdrawals without asking her if they were authorized.
In 2012, the New York Times published an investigation into one of the largest and most frequent scams directed at seniors and the elderly: reverse mortgages. These are loans, not free money. The Times told the story of Joan Serioux-Forde, who received a bill for $293,000 about one month after her husband, whose name was the only one on the reverse mortgage document, passed away. The investigation found that many seniors were encouraged by lenders to put their older spouses as the sole borrower on the loan, and not include the spouse; because that way, the brokers earn a larger commission.
The Times went on to say that many smaller brokers falsely promise the borrower he or she will never lose their home, but heartlessly foreclose on the house as soon as the survivor can no longer pay off the loan. Worse, there are estimates that about 70 percent of reverse mortgage loans made in the past eight years are taken in lump sums. The Times wrote, “When seniors use the money to pay off other debts, especially right before retirement or early into it, that can leave them with scarce resources to pay their property taxes and insurance.”
Before accepting any offer of a reverse mortgage, go to your bank and have one of the financial experts take a look at the offer. They can help with a reality check, and find out if this is a scam to rip you or other family members off, or a more legitimate offer that poses less risk of losing a home. When it comes to reverse mortgages, the more research you do first, the less likely you are of losing your home because of a predatory lender’s false promises.
MONEY SAVING TIPS
Recently, a man who had purchased an expensive computer found that a few months after the warranty expired, the computer stopped working. He took it to a shop, and the estimate for the repair was nearly $300. So there his expensive computer sat on a desk at his home, unusable and worthless. But had he purchased Best Buy’s annual Geek Squad computer protection, he would have paid $200 for the first year, and $100 for each successive year. For that sum, he could bring his computer to the store as many times as he wished, and received unlimited repairs and maintenance for no extra charge. A home visit by a technician would cost just $50.
Or, he could have joined Sam’s Club, which offers free over-the-phone tech support and troubleshooting. A basic membership to Sam’s Club costs $45; the ‘Plus’ membership costs $100 (each before taxes). The more expensive membership has special discounts on regular purchases and discounted prices at events like ‘VIP’ sales. But both memberships offer the free ‘tech’ club, where phone support for your computer is free day or night; it never closes.
There are also other ways to look at expenditures and save money. Do you pay for a gym membership? Do you use it? If you don’t really use it; or if you go only a few times a year, it may be more practical to purchase a set of dumbbells or a piece of fitness equipment. That way, you can work out at home without the inconvenience of going out to a gym.
How about annual dues to an organization that you’re really no longer interested in and don’t go to meetings. You can cancel those kinds of memberships if you think you would feel no loss.