By James Limbach
ConsumerAffairs.com
March 10, 2010
Older consumers trying to survive the economic downturn and avoid scam artists are getting a helping hand from the office of Illinois Attorney General Lisa Madigan.
The AG has introduced a guide for protecting seniors in the current financial turmoil and launched a program to educate seniors to identify and avoid consumer fraud.
Following the Federal Trade Commission's national theme of Dollars & Sense: Rated "A" for All Ages, the Madigan's office is using National Consumer Protection Week to focus on the financial challenges and scams that seniors face in a volatile economic climate.
"Although the recession has affected everybody, older Illinoisans living on fixed incomes are often targets of scams," said Madigan. She adds that it is important that "seniors have the information and resources they need to fight consumer fraud and deal with financial hardships."
Attorney General Madigan has created "Every Cent Counts -- for Senior Citizens," a guide designed to help seniors spot and avoid fraud and understand their consumer rights and options so that they can make the most of existing dollars and safeguard their finances.
The guide provides information for seniors facing credit and debt problems or difficulty paying their home mortgages, as well as details on how to assess whether a reverse mortgage is a legitimate option, and how to combat identity theft.
It also explains how seniors can identify and avoid scams associated with debt settlement, counterfeit checks, mortgage rescue fraud and secret shopper offers. Those interested individuals can access the guide -- which is available in English and Spanish -- on the Attorney General's Web site or by calling 1-800-386-5438 to request a copy by mail.
Amy of Ventura, CA, tells ConsumerAffairs.com of a problem her grandmother with a reverse mortgage held by Bank of America. "We had looked into refinancing the loan to get it FHA insured. B of A had scammed my 91 year old grandmother into accepting a Jumbo loan that was not backed by FHA insurance and held the loan had an extremely high interest rate."
She claims that as soon as negotiations began with another company, B of A gave the case and all the documentation to "some unauthorized, unknown broker who didn't even have a legitimate phone number. There were no signed documents and no authorization for them to give the case to anyone at that point. Needless to say, there was a domino effect that has cost us thousands of dollars, delays, stress and aggravation."
Duane of Melville, NY, has a problem with Somerset Mortgage Lenders. "They give out false confirmation numbers, they send out pre-application without disclosures, they sell reverse mortgages to seniors without explaining the program in detail," he tells ConsumerAffairs.com. "They also send out just signature pages to seniors without disclosures and they send the borrower's copy one to two weeks later. They arrange HUD counseling by acting as family members. They stall and manipulate borrowers until they are desperate and have no other recourse."
Madigan has also launched Silver Beat, a consumer education program as another avenue to ensure that seniors know how to protect themselves from con artists and deceptive practices. Far too often, scam artists perceive seniors as vulnerable and relatively wealthy due to their ability to access home equity, retirement accounts and pensions.
"One of the smartest actions we can take is to provide seniors with detailed information on how to avoid fraud and ask them to pass that knowledge along to other seniors," said Madigan.
The program is designed to educate seniors about how to avoid consumer scams, including debt settlement traps, fake check cashing scams, risky reverse mortgages and health care fraud.
Even without the attorney general's tips on how to cope with the recession, many seniors are finding ways on their own to handle the economic downturn.
