Online security of seniors

Are older people at increased risk of becoming victims of online data mining and scams?

This is a simple question that deserves a straight answer. I conclude that even if our hunch is “yes”, there is no available published data that can allow us to answer the question directly. I conclude that most coverage of the topic is speculative.

Yesterday I published a blog post about online data mining of information for older Americans looking for Medicare information online. My belief – based mostly on anecdotal observations – was that older internet users are more susceptible to online scams and data mining campaigns but I have no in-depth understanding of the issue. A publisher then queried me about the possibility of expanding on the topic. I spent a little time researching the topic of online security for seniors and was surprised by the lack of published source data. This blog post is a roughly formatted summary of what I did find.

National Association of Insurance Commissioners (NAIC)

In my blog post yesterday I referred to a continuing education course on ethics in the insurance industry that compiled many examples of violations investigated by the various state insurance departments. The NAIC compiled data on insurance market conduct violations. Yet even if we look only at reports for online scams, there is no way, to my knowledge, to separate the data based on age of the victim.

Department of Homeland Security (DHS)
http://www.dhs.gov/publication/stopthinkconnect-older-american-resources

One of the few resources is “Cyber Tips for Older Americans

DHS does not say that older Americans are at increased risk of online security problems.

I sent an email: “I have been asked by xxxxxxxxxxx to write an article on cyber threats to older Americans.
It seems difficult to find sources of original research on this topic.
Can DHS help by pointing to any available data?”

Federal Bureau of Investigation (FBI)

“Internet Fraud

As web use among senior citizens increases, so does their chances to fall victim to Internet fraud. Internet Fraud includes non-delivery of items ordered online and credit and debit card scams. Please visit the FBI’s Internet Fraud webpage for details about these crimes and tips for protecting yourself from them.

From <https://www.fbi.gov/scams-safety/fraud/seniors/seniors>

The FBI does not indicate an increased risk to seniors.

I will call the National Press Office at (202) 324-3000

National Council on Aging (NCOA)

Says the #1 fraud for seniors is Medicare/health insurance fraud:
“Their unfamiliarity with the less visible aspects of browsing the web (firewalls and built-in virus protection, for example) make seniors especially susceptible to such traps. ”

and

“Financial scams targeting seniors have become so prevalent that they’re now considered “the crime of the 21st century.” Why? Because seniors are thought to have a significant amount of money sitting in their accounts.
Financial scams also often go unreported or can be difficult to prosecute, so they’re considered a “low-risk” crime. However, they’re devastating to many older adults and can leave them in a very vulnerable position with little time to recoup their losses.”

From <https://www.ncoa.org/economic-security/money-management/scams-security/top-10-scams-targeting-seniors/>

NCOA provides no citations for their report or links to additional information so I presume that the comments are opinions or are speculative.

Frontier Secure (2013)

A private web site commenting on the topic in 2013 said
“Seniors are typically more trusting and respectful of official looking material than younger generations, and more worried about notices that claim there is a problem with their information that might somehow tarnish their good name.”
“These concerns increase your risk of falling for ‘official notice’ types of scams. These may claim to be from your bank, from a utility company, the IRS, or a local, state, or national government body.  Whether you get a notice by phone, mail, email, or online, the ONLY way to avoid being scammed is to double check with the relevant company or government body to see if the notice/alert/etc. is legitimate. Do not provide any information or money before you have independently checked out the information.”

“Many seniors who feel an economic pinch are also at greater risk for discount drug scams, tax refund scams, disability scams, welfare or social security payment scams, as well as ‘free money’ scams like ‘you won the lottery.'”

From <http://blog.ftrsecure.com/why-seniors-face-increased-risks-in-some-online-activities/>

Again, no sources or references are provided so I presume the comments are speculative.

 

Medicare information: Are online sites safe?

I noticed that a major national publication(1) that is widely read by affluent seniors published a sponsored links section under the heading “2015 Medicare Premium Cost” that raised my curiosity and made me a little suspicious(2). I decided to check it out. The simple benchmark I used was to ask myself “Would I be comfortable referring my father to this site?“. This is what I learned:

The sponsored links page contained 14 listings. I clicked through to each of them to see what information was available and whether the sites seemed safe, straightforward and reputable.

  • Only one of the 14 was actually an information resource that did not sell any product on its page. It did link to product sales but gave an on-screen warning that “You are now leaving the Medicare information section”.
  • One of the 14 was actually just the search engine About.com drawing traffic to its site under the search term “Medicare Information”. An interesting approach; I had forgotten that sometimes the search engines actually purchase web traffic for resale.
  • The other 12 of the 14 were actually data mining pages where you had to give personal information first (name, location, email and phone number in each case) in order to enter the site of access any meaningful information. It would be naive to not realize that these collected leads are heavy marketed in various formats, sold and resold. Personal information on seniors looking for Medicare information are likely to be among the most valuable types of sales leads for a range of other product sellers. These sites do not limit the use of consumer data once they collect it.
  • Two of the sites were obviously misleading in that they advertised “Medicare Plans” or “Medicare Insurance” in the title when they were actually selling Medicare supplement insurance. In my opinion, these violate insurance market conduct rules.

Overall, I was disappointed in the quality of the “resources” in this exercise. I conclude that the best online resource for information about Medicare is still the government’s official 160 page national handbook “2016 Medicare and You“.

Individuals who want personal assistance with Medicare issues seem to have two basic options:

1) Give their personal information and allow the product provider to enter them into a marketing campaign and have a sales representative contact them, or

2) Hire a personal adviser and have their adviser do the legwork for them. This second option is further limited since the number of financial advisers skilled in Medicare insurance issues are few and most of these, I suspect, receive compensation as commissioned sales agents. It is not that the commissioned agent approach is wrong (in fact I believe it is the best option for most people), but it is important to recognize from the start that this creates a conflict of interest situation to the client that should be disclosed by the seller and understood by the client. A relative few individuals will be able to have their fee-only financial adviser recommend options on Medicare and supplemental coverage.

The most common tradition sources may still be the most practical. Friends, magazines, print advertisements, etc. have been common sources of information on Medicare, Medicare replacement plans and supplemental insurance.

The federal government and state insurance departments have long held the position that seniors searching for Medicare-related insurance products are vulnerable to unscrupulous or misleading sales practices and sometimes outright fraud. It appears that there is plenty of evidence to support these concerns so it seems that this topic of online Medicare product marketing deserves more regulatory attention.

Footnotes

(1) The publication was The Wall Street Journal but I omitted the name in the article because I don’t want the post to be a criticism of them; it could likely have been any publication that takes a similar approach to online advertising.

(2) I recently completed an online professional continuing education course on the topic of ethics in the senior insurance market that expanded on these risks. The list of schemes discovered by regulators and the number of prosecuted cases is overwhelming.