Warning on financial scams targeting the elderly
Friday 15 June 2012
Older people are being warned not to fall prey to bogus retail and investment schemes, after 78 rogue companies raking in more than £28 million from people were shut down in the last three years alone.
The companies scammed almost 2,000 investors between them and the oldest victim was aged 92, according to the Insolvency Service, which wound the firms up.
The service has joined forces with charities to warn older people and their friends and family about the scams, amid fears that this age group is being targeted by "callous" conmen.
Forty-nine of the companies wound up sold plots of land for building that did not exist or were on protected green belt land; four sold wine stocks that did not yield any profits, and nineteen sold other forms of investment.
Six sold retail products that were either unsuitable or at highly-inflated prices, including burglar alarms, mobility scooters, "heritage" coins and stair-lifts, the Insolvency Service said.
In one case, the Insolvency Service found that a mobility scooter was sold to an 80-year-old customer who had had both legs amputated, despite guidelines stating that the product was suitable for someone who had difficulty walking but had use of both legs.
In the case of another company, a family invested £600,000 in a land banking scheme but it later turned out that plots of land had been mis-sold, the Service said.
Representatives of another firm selling orthopaedic products were found to have falsely claimed they were from social services and sales visits often lasted for three hours or more.
The average age of customers was 79 and many had physical or mental health problems.
Salesmen used a confusing price structure and added mark-ups against the cost price of products of several hundred per cent and, in one case, as much as 1,326%, the Service said.
Issuing their warning on World Elder Abuse Awareness Day, campaigners said these scams often use high-pressure tactics or sell products at grossly inflated prices and conmen would cold call older people and refuse to hang up until they have closed a sale.
Robert Burns, head of investigation and enforcement for the Insolvency Service said: "We have observed a number of companies targeting older people in recent months.
"These scams are particularly unpleasant because they target the most susceptible members of society, older people who may be unsure how to seek advice or afraid to say no.
"They can destroy lives at a time when those targeted should be taking a break from worry and enjoying life after working hard.
"Victims are paying for something and getting nothing. The worst aspect is the callousness with which the fraudsters go about their business; ignoring the obvious fact that that because of their age, most victims will never be able to make good their loss."
Mr Burns said if people have any doubts they should take time to research the company and seek out some independent advice.
Michelle Mitchell, charity director general at Age UK, urged people not to feel embarrassed to report a crime to the police and said they should also tell their friends and relatives.
Jeremy Hughes, chief executive of the Alzheimer's Society said: "There are currently 800,000 people living with dementia in the UK.
"Many are older people and easy targets for con artists. It is disgusting that these scams specifically target the most vulnerable in our society.
"Con artists are dealing another blow to people who may already be struggling financially due to the huge cost of care."
Gary FitzGerald, chief executive of Action on Elder Abuse, said that everyone should be vigilant to help older people protect themselves from conmen, who see them as a way to make "easy money".
Business Minister Norman Lamb backed the warning, saying: "These scams are especially bad as they target some of the most vulnerable members in our society. Older people have grown up trusting other people.
"To take advantage of this trust, and then exploit it is both manipulative and deceitful."
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