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Elder Fraud

Concept of Reverse Mortgage Fraud

Concept of Reverse Mortgage Fraud

The concept of a reverse mortgage in itself may not be all that well-known to the average homeowner, so that recognizing attempted reverse mortgage fraud could prove exceedingly difficult for the uneducated consumer. Realistically, the market for reverse mortgages at present is small, but evidence suggests that demand for information on them and applications for them are growing rapidly.
By extension, so are reported cases of reverse mortgage scams. As is often stressed, the elderly are an all-too-frequent target for fraud, especially in matters concerning the home (e.g. door-to-door salesmen charging unreasonable rates for home repairs). Concordantly, various government agencies like the Federal Trade Commission and the U.S. Department of Housing and Urban Development are making it their mission to monitor reverse mortgage fraud schemes directed at the elderly, and prosecute against the originators of these reverse mortgage scams whenever possible.
Going back to the fundamentals of reverse mortgages, though, we cannot hope to understand why seniors are so sought after in reverse mortgage fraud attempts beside presumptions of weakness and senility. A reverse mortgage is rather aptly named because it employs the opposite payment scheme of a conventional home mortgage. Conventionally, a home mortgage orchestrates a loan with a series of repayments to be made every month to the lender after the signing of the contract.
With a reverse mortgage, on the other hand, a homeowner turns equity in his/her home into a lump sum payment from a lender or a regular system of receipt of funds from said lender to be repaid in bulk plus interest upon death, relocation or some other life-changing effect ceases occupation of the property. Usually, seniors are the most attractive targets for reverse mortgage scams because they tend to have the most home equity built up after years of steady mortgage payments.
As for how this reverse mortgage fraud manifests itself, perpetrators will convince elders to pay large amounts money for property deeds based on appraisals of homes artificially inflated after cosmetic changes are made to the house (a.k.a. “flipping” these homes). Not only are elderly individuals overpaying in these reverse mortgage scams, but they are using up their most or all of the value in their home to do so. 
While the federal government and elder advocates are doing everything in their power to sniff out and curb the rate of reverse mortgage scams in America, it is still up to seniors and their families to exercise a great deal of caution and discretion when making any deals with a foundation in real estate. Some tips for avoiding reverse mortgage fraud victimization:
If genuinely interested in seeking out a reverse mortgage and is in need of a place to start regarding research, HUD is a good place to start. The Department of Housing and Urban Development offers free information to consumers about these kinds of loans. Meanwhile, some paid services may try to charge hundreds, if not thousands, of dollars to do the same. In general, solicitors should be wary of upfront fees, and should make sure they are provided with a schedule/list of all charges to be compensated over the course of service.
Be aware of what may feel like unnecessary attempts to move along a conversation about reverse mortgages to a binding agreement, i.e. pushy salesmanship. A good realtor/lender will be forthcoming with you about what such arrangements entail, and will look to see that you understand these proceedings. In the event you are not comfortable with any proposal, you reserve the right to refuse it and protect your best interests.
If you suspect reverse mortgage fraud, do not hesitate to call HUD, the Federal Bureau of Investigation, or another appropriate authority. These organizations will usually have hotlines established for this very purpose whose staff should regard all legitimate claims with the utmost seriousness. 

Understanding Elder Fraud

Understanding Elder Fraud

Elderly people are prime targets for fraudulent activity and scams. The criminals who target elders do so because of their vulnerability, their needs for companionship and financial stability, and their tendency to be caring and giving people. 

Fraudulent schemes are created and employed disguised as popular programs or organizations. Fake companies present themselves as reliable entities in which the elderly can trust for their services. These people model their schemes closely after the operations of legitimate corporations or activities with slight changes where the ringleaders create an opportunity for themselves to turn a profit.

By contacting older people through telephone calls, mailing or even door-to-door campaigns, they try to convince them that their cause is legitimate and that they should do what they are being told. In reality, their phone calls and mail messages can falsely tell people they have won a competition with a large cash prize, or door-to-door sales persons can be trying to get their targets to pay for a service they will never receive. Federal and state laws have been created to protect the interest of the consumer when dealing with false sales information and other fraudulent sources. 

Telephone/Mail Fraud

Being contacted through phone calls or mail messages that explain that an individual has won a sweepstakes, lottery or some other competition may be tantamount to dealing with a fraudulent criminal. These calls or messages will inform targets that they have won a large cash prize and need to act quickly in order to receive their prize or their opportunity will be lost.

These scams will require their “winners” to pay a processing fee or transfer charge in order to receive their winnings. These charges or taxes, instead, are to be sent to an out-of-country bank account, and the scammer will keep this sum of money. Targets will never hear from the fraudulent contest organizers again, their money effectively stolen. Being aware of whom one is contacted by and being cautious of these get-money-quick schemes will help individuals avoid becoming victim to one of these plans.  

Health Care/Health Care Insurance Fraud

Practicing health care or health care insurance fraud is punishable by incarceration, heavy fines and even the loss of license to practice health services. 

Home Repair Fraud

Door-to-door campaigns can include contractors coming to elderly people’s houses and providing them information to try to convince people to use their business. These contractors or builders are often frauds and are trying to scam money from people who will fall prey to their scheme. They offer immediate services at a discount price, raw materials that are special to their practice and they offer a “one-time’ opportunity. Any company that uses these strategies are most likely fraudulent businesses.

They can try to force their targets into acting quickly on their services by saying that this opportunity is only good that day or that they are lucky winner in their campaign. Elders contemplating home repair should consult with professionals by contacting them through referrals from people they trust and read reviews online or in the papers. One should always do research to check the credentials of any company offering to do a service.

Reverse Mortgage Fraud

The Housing and Urban Development organization (HUD) created reverse mortgage programs from those people who were having trouble meeting the payments for their houses. With the installation of new programs, it opened the door for fraudulent criminals to take advantage of a newly established program that was new to the public.

Reverse mortgage fraud scams convinced people, mostly elders, that by doing a reverse mortgage with their company, they will be safe and have financial stability in the future. They were also convinced to buy insurance and other programs and services from the same program, which ended up taking their targets payment for these services and never fulfilled the promised service. HUD and AARP have established newer programs that will try to limit and eliminate reverse mortgage fraud schemes. 

State Consumer Fraud Laws

The Federal Trade Commission (FTC) has jurisdiction over monitoring consumer fraud and establishing fraud laws for the entire United States. They decide which practices are fair and unfair to the consumer. Common law, or judge-made laws, effect a broad and spectrum for governing over misrepresented sales between businesses and consumers.

Each state has their own restrictions and regulations when deciding over consumer fraud laws and issues. Some states have established specialized agencies and branches of law whose sole purpose is to monitor over fraud laws and consumer fraud. Some states, such as New Jersey, have taken it a step further and created acts and laws in how to deal with deceptive sales practices within their state. 

Health Care Health Insurance Fraud

Health Care Health Insurance Fraud

Health care and health insurance fraud vary in the types
of schemes and plans employed. Such setups include: individuals obtaining
fully-paid or subsidized prescriptions, receiving those medications, and
selling them illegally to make profits, individuals billing practitioners when
they never used their care, altering descriptions or dates and lengths of visits
and billing a service that isn’t covered by insurance, among many
others. Providing false information when applying for health care or
health services, forging prescription drugs and reselling them for profit, and
loaning people or using others’ health insurance cards all are violations and
examples of health care fraud or health insurance fraud. When health care fraud
or health insurance fraud is committed, companies pass along monies lost
through charges to their users. The customers then have to pay more for
prescriptions and visits to doctors. Statistics now show that 10 cents of every
dollar spent on health care goes to paying off the fees from the apparently
vast amounts of fraudulent activities in health care and health insurance
claims. 


Health care insurance companies have 30 days to pay a
legitimate claim, as current congressional legislation states. The FBI, U.S.
Postal Service and the Office of the Inspector General are responsible for the
investigations of health care fraud and health insurance fraud. These agencies
rarely have enough time to conduct a full investigation in those 30 days to be
able to prevent and protect against fraudulent activities before an insurance
company has to pay the claim. Parties indeed found guilty of health care
fraud or health insurance fraud, though, depending on their identity, are
subject to punishment of incarceration, large fines and possibly the loss of
right to practice in the medical field in the future. Violations of health care
fraud are not taken lightly and those who commit these crimes will be punish
ed accordingly.  

Quick Glance At The Background on Elder Fraud

Quick Glance At The Background on Elder Fraud

Though it would seem to be indicative
of generalizations and AARP        
Many
elders have valuable assets including homes, proceeds from appraised real
estates and retirement funds.

        
Elders
may be concerned with losing money and could be looking for a quick
money-generating plan.

        
Many
elderly people have memory issues, whether by product of disease or simple loss
of memory, which makes it easier for them to fall victim of elderly fraud.

        
Elders
may be lonely and in need of companionship, even from people they don’t know,
which could make them more vulnerable to financial elder fraud/exploitation.

        
Older
people have traditional values which could lead to them being more generous to
charitable offers.

        
The
fear of losing their independence keeps elders from reporting elderly fraud
when it happens.


The factors above combine for just some of the ways by which frauds target
elderly people when trying to scam money from them. Some warning signs of
potential elder fraud and the like:

        
Winning
a special gift/prize or being selected to receive a special offer when no entry
in a sweepstakes was ever made

        
Being
urged to “act immediately” and pay for your prize

        
Being
told there is a secret loophole to receive a cash prize

        
Being
prompted for Social Security number, bank number, or credit card number by a
company unfamiliar to the individual

        
Being
asked to donate money to a foundation whose name sounds similar to a
well-known, established charity

        
Being
pressured to allow mail service to be ordered and pick up one’s payment

        
Being
informed of a purchase made from a company that one does not remember or have
statements for

For seniors, being aware of the people who contact them
over E-mail and the phone will help them save their money and prevent them from
falling for one of these elderly fraud schemes. Indeed, there are many ways to
protect one’s money and other assets. If you are concerned about elder fraud,
to make sure your assets are as safe as possible, follow these guidelines:

        
Keep
all bank numbers, credit card numbers and Social Security numbers private.

        
Never
allow strangers to come into your home or ask about your assets.

        
Be
critical of the sales pitches used, especially if a salesperson says your
proceeds will go to a good cause.

        
Do
not sign a         
Never
sign contracts with blank spots; people can fill these in after you sign.

        
Have
a knowledgeable third party look over all home loans.

Elderly fraud happens frequently because criminals
understand the easy-going and good-willed nature of many elders. These
criminals will be relentless in their efforts to persuade elders into buying
into their scheme or plan. To the consumer, stay aware of who is behind these
suspect calls or E-mails, and always check the sources before following through
with any action. 


What You Need to Know About Telephone Mail Fraud

What You Need to Know About Telephone Mail Fraud

Perpetrators of elder fraud contact their targets in many ways, with the most common being by telephone or mail messages. By using these two platforms, criminals can hide their identity from their victims. Certainly, there are many ways that telephone fraud and mail fraud may be conducted. However, the main message that virtually every scam copies that the person who receives the message has won a prize or cash winnings.

The “winner” is then instructed to follow a list of steps to take in order to access his or her prize, which usually includes him or her sending some kind of fee or tax as a processing or holding charge. If the chosen target follows these instructions and sends money or bank account information, he or she will likely not receive his or her “winnings” and fall victim of telephone fraud or mail fraud instead. 

Those in charge of telephone fraud schemes contact people at random who are listed in a phone book. These criminals continue to solicit the person who answers the phone until they can hook him or her into believing their sales pitch, convincing the individual that he or she has randomly been selected to receive a cash prize or some other reward.

Dangling a large sum of money in front of people looking to make money quickly can prove quite an effective tool for schemers. People who have been found most likely to fall victim of these scams are young adults and elderly persons. Elders who are afraid of not having enough money to last them or pass on to their families will be yet more likely to believe these instances of telephone fraud. 

Mail fraud is very similar to telephone fraud in that defrauders will announce to targets that they have won a sweepstakes or lottery with a large prize that needs to be collected. Most of these mail messages will come from organizations or companies with names that seem very similar to large, well-known organizations designed to try to confuse their targets by seeming like legitimate companies. Of course, by doing this, people will be more likely to believe that they have won.

These fraudulent plans will instruct their “winners” to send money or bank account information to an off-shore or out-of-country bank, telling them that by paying a processing fee or tax, it will allow them to have access to their large sum of winnings and that the fee will be reimbursed.

These criminals will receive this “fee” into their account and then cease any communication with their target. Telephone fraud and mail fraud scammers will pressure their targets into quickly sending the fees by saying their offer will expire or that they will lose out on their prize. 

Being pressured into acting on a prize is one sign that an individual could be in the crosshairs of a telephone or mail fraud plan. Other signs to look out for: 

Not recognizing the sweepstakes, lottery or competition the powers-that-be claim one has won. You can not win a competition if you have not entered.

 Suspicious organization name. If they sound too familiar, check trusted resources and do research.

Being required to pay a processing fee for winnings. More than likely these fees will be kept and no prize will be sent, especially if there is a P.O. box or out-of-country bank involved.