Seniors Lose Billions Each Year to Scammers: 5 Quick Tips to Protect Yourself

According to the FBI, scammers take advantage of seniors to the tune of billions annually. A lot of this happens because seniors own a massive amount of U.S. real estate, a hard and valuable asset.

To avoid enriching the wrong people, keep our five tips in mind. Consider sharing this column with friends who need to know.

1. Making a Decision? Get a Second (and Third) Opinion.

Scammers associate age with vulnerability and think older adults are likely to accept advice. That assumption is working out for the swindlers so far. According to the FBI’s Internet Crime Complaint Center (IC3), reported losses by those aged 60+ is running at well over $3 billion a year.

Instead of jumping at any financial opportunity, show it to someone knowledgeable about finance. If the opportunity arrived through a smartphone or computer, speak with someone who is up on technology before responding or clicking links. 

This goes for signing papers with contractors who approach you. It’s possible you could end up with a mechanic’s lien on your home title from an unscrupulous company. To steer clear of trouble, seek opinions from local, licensed professionals on (1) the full price estimate; (2) whether your home needs the work; and (3) whether there’s a better, less costly way to make any fix that may be needed.

Sit with any offers that come from unknown contractors. Don’t be rushed. Check the online reviews. Use your internet search engine, and a dedicated review site such as the Better Business Bureau.

2. Got a Paid-Off Home? Protect Your Equity

Many seniors have paid-off homes. So they’re sitting on a good deal of equity. And there’s no mortgage company sitting there with them, keeping track of claims on the deed.

Swindlers figure the prize for getting their hands on the value of the home, and the ease with which they can get it, could make their risky schemes worthwhile.

Some of these people carry out deed forgery to transfer senior adults’ homes. They use data from the public records to create the deed, then they fake the real deed holder’s signature. They either falsify the notary stamp, or use a corrupt notary. They record the fraudulent deed with the county. Then, they might rent out the home (if it’s empty) or sell the home to a third party.

If your county (or city) deed recorder offers automatic deed alert messages, register. Then you’ll know when a claim is filed against your deed. A homeowner who reports an issue quickly may be able to prevent a further transfer, and recover the deed.

3. “House-Rich”? Watch for Reverse Mortgage Borrowing Risks

Sometimes, a reverse mortgage is the perfect way to enjoy travel, outfit a home with equipment to age in place, or meet educational or business goals.

But if you’re cash-strapped yet “house-rich,” you might be thinking that using a reverse mortgage to get at the value of your home could save your finances.

Tread with caution into the sphere of reverse mortgages. They’re complicated. Shady lenders may use their know-how against you. You might feel some pressure to move quickly to lock in a rate.

Remember, a reverse mortgage puts a lien on your title. Due diligence is essential here, to prevent the risk of losing your home to a manipulator. So…

Do compare fees, costs, and rates before settling on one mortgage company. Apply for a reverse mortgage after hearing the advice of your financial adviser. Understand how the loan impacts your tax situation, and your credit profile.

4. Transferring Your Deed to Someone You Trust? Look Before Leaping

Perhaps you’re struggling financially. Or maybe you just want to do the right thing by a trusted relative, helper, or friend. You could easily transfer your deed yourself, with a quitclaim deed.

Still, pause and reflect. Transferring a deed without representation is often a financial misstep.

And please do not even think about writing up a deed for someone else to pocket “in case something happens” to you. Deeds that sit around waiting to be recorded after death create title risks. They’re legally flawed anyway — as the recipient won’t be formally receiving a present gift.

Typically, placing your home in a trust or will, letting it pass after you pass, is a tax-savvy way to convey a deed to the next generation. Consult a reputable estate planning specialist.

5. Wiring Funds? Hold On a Moment

Did you get a call, message or mailing from your escrow or title company asking you to wire money? Hold the phone!

Maybe the supposed issue is an escrow account that, you’re told, needs to be replenished. Maybe you’re hearing about an urgent title matter.

As a deed holder, you cannot fix a title or escrow problem by wiring funds from your bank account.

If you believe there’s any issue with your mortgage, call your mortgage company and discuss remedies.

Avoid elder real estate fraud! Never send money to anyone without calling the party who’ll receive it, and making sure the request is authentic.

Risks Can Be Anticipated. Set Yourself Up for Success

Protect your interests by setting up a trust or by establishing a power of attorney.

Seniors in the know train themselves to pause, stay firm, and carry out due diligence with the support of professional advice. After this refresher, we know you will, too. But Deeds.com is not a lawyer or financial advisor. Be sure to consult a licensed professional for legal, tax, and general financial clarity.

Important note: A power of attorney will trump your will. Be sure to consider the POA pitfalls here.