7 scams targeting Florida seniors — and how to avoid them

It's common for retirees to head south to Florida to live out their golden years. But there are also scammers and lowlifes that see these seniors — and their nest eggs — as ripe prey for scams. Here are seven examples of scammers conning the Sunshine State's seniors, and what you can do to prevent becoming the next victim:

1. The lottery scam

How it works: A Jamaican-based lottery scam emerged this weekend that has seniors on high alert. The con artists are cold-calling seniors to tell them they've won the lottery, and convincing them to pay shipping expenses and other fees in order to claim their fat paydays. U.S. law enforcement officials warn that the men behind the ruse are drug traffickers, and that they often make threats over the phone to intimidate seniors into signing away their savings.

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How to avoid it: It's illegal to play foreign lotteries from the U.S., so any calls like these are blatantly fraudulent. Officials also advise seniors to use their common sense. "Our message it very simple; if it sounds too good to be true, it's not true," said Victoria Funes, AARP's Florida state director.

2. The Medicare scam

How it works: In 2005, seniors in Florida applying for Medicare prescription drug coverage plans were told to avoid companies claiming that they are "authorized" or "funded" by Medicare to offer assistance. These so-called advocates are actually peddling pharmaceutical drugs at a higher price than what beneficiaries should be paying.

How to avoid it: Don't give out your Social Security number, bank account number, or personal financial information to anyone over the phone whom you don't know. In addition, keep in mind that door-to-door solicitations are only permitted when the beneficiary requests it.

3. The insurance scam

How it works: In 2004, hundreds of Florida retirees were conned out of a total of $2 million in fraudulent insurance sales commissions. The perpetrators had assured victims that they would save a bundle of cash on their health insurance. But, in reality, it was a bait-and-switch scheme. The perpetrators exchanged the seniors' health insurance for a low-cost option, then overcharged them.

How to avoid it: Know what you're signing. If you have questions about your health insurance, talk directly with your provider; don't go through a third party representative.

4. The trust and annuity scam

How it works: In 1998, postcards began arriving at Florida homes claiming that the wills and estates of seniors were insecure. Those who replied were then subjected to an hours-long, in-person consultation (which amounted to pure bullying, according to observers) during which the scammers would persuade them to purchase living wills and insurance annuities instead. The victims were convinced that liquidation of all assets was the best way to keep their savings, but were not informed that the changes would result in massive taxes and hefty hourly legal fees.

How to avoid it: Trust a well-known and well-regarded financial adviser to take care of your nest egg.

5. The IRS identity theft scam

How it works: As of last spring, more than 460,000 taxpayers nationwide had been victims of wage and/or identity tax fraud since 2008. Florida is a hotbed of such schemes, with scammers targeting seniors who aren't technologically savvy. Thieves are selling names and personal information of unsuspecting citizens for $200 to $300 a pop, which is then used to file fraudulent tax returns. The refunds are deposited on a prepaid money card, and victims don't realize they've been bilked until they try to file their taxes.

How to avoid it: Keep your personal information safe; unsecured mailboxes, for example, are often used by identity thieves to access mail with sensitive information like Social Security numbers. When on the Internet, don't leave yourself logged into your bank statements, credit card statements, Medicare statements, or other personal documents.

6. The securities scam

How it works: There are many examples of this type of scam. In 2003, for instance, a Florida-based church asked Christian communities for donations with promises that contributors could double their investments over a short period. Investors, many of them seniors, lost thousands of dollars.

How to avoid it: Experts say to pay attention to how the investment is presented. Phrases like "low-risk," "no-risk," and "guaranteed return" are signs that something is amiss. Pressure to commit is also a good indicator that there isn't really a pot of gold at the end of the rainbow.

7. The "investment seminars" scam

How it works: Lots of financial advisers will try to attract new business by offering freebies to money-conscious retirees at information sessions. But an investigation into such scams in Florida, among other states, revealed that some of these seminars involve hawking products that could be in violation of securities law. "They're not educational events," Lori Richards, then the director of the SEC's Office of Compliance Inspections and Examinations, told the Associated Press in 2007.

How to avoid it: The sales pitches made at these kinds of seminars must be approved by a brokerage or investment firm's supervisors, and submitted to review by Financial Industry Regulatory Authority. "Our research shows that almost one in five seniors who lost money on an investment attribute that loss to being misled or defrauded," said Mary Schapiro, then FINRA's chairman and chief executive.