Unfortunately, the word “scam” has become too common in today’s world. A scam is an act by a dishonest person or organization to trick someone out of something, usually money. Search common scams and you’ll get pages of results. I found one site that listed 21.
However, there are two scams missing from the list that you may not have heard about but are becoming more common. Two recent situations in my life show why I believe that the nature of these scams makes seniors particularly vulnerable.
Gift Card Draining
I went out to dinner with a family member. He doesn’t have any credit cards, and, because of a recent incident, he’s learned to bring enough cash with him.
He received a gift card for his favorite restaurant. When the check came, he presented the card. He was shocked when the server came back and told him the balance was zero. He had just scratched off the PIN cover label.
My relative was the victim of gift card draining and, unfortunately, he isn’t alone. An AARP survey found about one in four Americans have given or received a gift card that had no funds.
Gift card draining happens when a thief steals a gift card, gets the number and the security code, reseals it in a way hides the alteration, and returns the card to the store display. Then, when the recipient activates the card, the crook can drain the money out of it. The unsuspecting victim discovers the fraud when using the card to pay a bill. It’s unlikely these victims will ever get any of that money back.
Personal experience tells me why seniors are more vulnerable to this scam. What can we give Grandma or Grandpa for their birthdays? How about a gift card to the movie theater, a restaurant, the beauty or barber shop? And what do grandparents give to their grandkids? Gift cards for their favorite music or gaming system are easier choices than wandering through a mall, trying to find the right gift.
How can you avoid this scam?
- Buy eGift cards. Downloading and printing the card means the crook can’t get to it first and scratch off the code. Just about any company that offers physical gift cards will sell them online. I have even discovered a couple of companies that sell only virtual cards.
- Buy gift cards that are stored behind a counter if online purchasing is not an option. A thief wouldn’t be able to get to that display.
- Purchase a gift card with a credit card. It may be possible to get a refund if it’s been drained. However, that won’t help seniors, like my relative, who don’t have credit cards.
Check Washing
I was waiting in line to check in at my doctor’s office. The older gentleman in front of me pulled out his checkbook to pay his bill. However, the patient service representative said the system no longer accepts checks on-site. When he asked how he was supposed to pay the bill, she said he could use a credit card. “Never had one,” he replied. So, she said they would mail him a copy of the invoice and he could send in a check.
Sending a check through the mail opens the door to a scam known as check washing. A crook steals a check from a mailbox and washes it with chemicals to remove all information but the signature. Then, when dry, the crook writes in a new payee name and dollar amount, and fraudulently deposits it into a checking account or gets cash at a check cashing store.
Postal Inspectors recover more than $1 billion in counterfeit checks and money orders every year. And the Better Business Bureau claims that check washing accounts for over $815 million in losses to individuals, businesses and financial institutions per year. But, who knows whether the victim will ever see any of the money again?
Because older individuals may not have credit cards and could be uncomfortable with online payment, they are vulnerable. So, here’s a few tips from the Postal Service to help protect against check washing.
- Rethink the use of checks. Pay bills by credit card or online, if you can.
- If writing checks, use a gel pen, which makes it more difficult for scammers to wash off the ink. Some pens even claim that their ink protects against check washing.
- If you have to mail a check, deposit it at the post office or in a USPS blue collection box right before the last pickup. Scammers have been known to steal mail from boxes.
- Do not put checks in your mailbox with the red flag up, which can be a green light for scammers.
- If you are expecting a check, retrieve your mail as soon as it is delivered.
- Never leave your mail in the mailbox overnight.
- If you’re going on vacation, have the mail held at your local Post Office or ask a trusted neighbor to collect it for you.
As our methods of communicating, shopping, bill paying, web browsing, and whatever else evolve, be assured that opportunists will be refining their methods to defraud as well. But, if you know what’s going on and take some steps to protect yourself, you’ll minimize your chances of becoming a victim.