Financial scams targeting older adults are prevalent and costly. The FBI estimates that older adults lose more than $3 billion each year to fraudsters. Scammers go after older adults because they believe older adults have a significant amount of money sitting in their accounts.
But it’s not just wealthy seniors who are targeted. Low-income older adults are also at risk of financial abuse. And it’s not always strangers who perpetrate these crimes. Over 90% of all reported elder abuse is committed by an older person’s own family members. Most often their adult children, followed by grandchildren, nieces and nephews, and others.
Financial scams often go unreported or can be difficult to prosecute They are considered a “low-risk” crime. However, they’re devastating to many older adults. Many times leaving older adults in a very vulnerable position with little time to recoup their losses.
By identifying and avoiding the most common scams, you can protect yourself and your family from fraud.
Top Financial Scams
Government impostor scams
- Government impostors call unsuspecting victims and pretend to be from the Internal Revenue Service (IRS), Social Security Administration, or Medicare. They claim you have delinquent taxes, they may threaten arrest or deportation. Or they may say your Social Security or Medicare benefits are in danger of being cut off. They get the older adult to provide personal identifying information (that can then be used to commit fraud). Government impersonators often “spoof” the actual phone numbers of the government agency, or call from the same zip code. (202 for Washington, DC).
The grandparent scam
- The grandparent scam is so simple and so devious. This scam uses one of older adults’ most reliable assets, their hearts. Scammers will place a call to an older person and say something along the lines of: “Hi Grandma, do you know who this is?”. When an unsuspecting grandparent guesses the scammer’s grandchild’s name, he has created a fake identity without doing any research. Once “in,” the fake grandchild will ask for money to solve a financial problem (rent, car repairs, jail bond) and beg the grandparent not to tell. Scammers ask to be paid via gift cards or money transfers. These methods don’t always require identification to collect, the senior may have no way of seeing that money ever again.
Medicare/health insurance scams
- Every U.S. citizen or a permanent resident over 65 qualifies for Medicare, therefore scammers seldom need to investigate older adults’s private health insurance to swindle them. Scammers may pose as a Medicare representatives to get older people to give them their personal information. They will provide bogus services for elderly people at makeshift mobile clinics. Then they bill Medicare and pocket the money. Medicare scams often follow the latest trends in medical research, such as genetic testing fraud and COVID-19 vaccines.
Computer tech support scams
- Computer technical support scams prey on people’s lack of knowledge about computers and cybersecurity. A pop-up message or blank screen usually appears on a computer or phone, telling you that your device is compromised and needs fixing. When you call the support number for help, the scammer may either request remote access to your computer and/or that you pay a fee to have it repaired. The Federal Trade Commission (FTC) found that seniors who fell for this scam lost an average of $500 each to computer tech support scams in 2018.
Sweepstakes & lottery scams
- This simple scam is one that many are familiar with. It capitalizes on the notion that “there’s no such thing as a free lunch.”. Here, scammers inform their victims that they have won a lottery or sweepstakes of some kind. They tell the victim they need to make some sort of payment to unlock the supposed prize. Often, older adults will be receive a check that they can deposit in their bank account. The scammer knows it will be a few days before the bank rejects the (fake) check. During that time, the criminals pocket money for fake fees or taxes on the prize while the victim’s “prize money” is bouncing from their account. Unlike other scams, lottery and sweepstakes scammers can sometimes collect thousands of dollars from their unsuspecting victims.
- Robocalls take advantage of sophisticated phone technology to dial large numbers of households from anywhere in the world. Robocallers use a variety of tactics to cheat their victims. Some may claim that a warranty is expiring on their car/electronic product and need payment renew it. One popular robocall is the “Can you hear me?” call. When the older adult says yes, the scammer hangs up after recording their voice. Thus obtaining a voice signature to authorize unwanted charges on items like stolen credit cards.
- As more people use the Internet for dating, con artists see an opportunity to find their next victim. In fact, romance scammers create elaborate fake profiles, often on social media, and exploit seniors’ loneliness for money. In some cases, romance scammers may (or pretend to) be overseas. These scammers will request money to pay for visas, medical emergencies, and travel expenses to come to visit the U.S. Because they drag on for a long time, romance scammers can get a lot of money from an older adult. The FTC found that in 2019 alone, seniors lost nearly $84 million to romance scams.
Internet and email fraud
- While using the Internet is a great skill at any age. However, the slower speed of adoption among some older adults makes them easier targets. Especially for automated Internet scams that are ubiquitous on the web and email programs. Pop-up browser windows imitating virus-scanning software trick victims into downloading a fake anti-virus program (at a high cost) or a virus that gives scammers access to the user’s computer. Unfamiliarity with web’s less visible aspects (firewalls, virus protection) makes older adults vulnerable.
- Phishing emails and text messages may look like they’re from a company you know or trust. They may look like they’re from a bank, a credit card company, or an online store. Phishing emails request your personal information to verify your account or ask that you update your credit card payment. Then they use that information to steal your personal and financial information.
- Elder financial abuse
Usually, a known person is committing the Elder Financial abuse. This can be a family member, friend, power of attorney, or caregiver. These trusted individuals try and gain control of an older adult’s money, assets, and credit. As well as, they also may withhold needed care in order to retain control over the person and their assets. Older adults who have a disability or cognitive impairment (such as dementia) may be at particular risk.
- Charity scams rely on older adults’ goodwill to pocket money they claim they’re raising for a good cause. Some scammers may use a name similar to a legitimate charity. They often capitalize on current events, such as natural disasters. They may set up a fundraising page on a crowdsourcing site, which doesn’t always have to means to investigate fraud. Charity scammers may insist you donate immediately, sometimes with a payment method that should be a red flag. (e.g., gift cards or money transfers.)
Are you a victim?
If you suspect fraud… Don’t be afraid or embarrassed to talk to someone you trust. You are not alone, and there are people who can help. Doing nothing could only make it worse. Keep handy the phone numbers and resources you can turn to, including the local police, your bank (if money has been taken from your accounts), and Adult Protective Services.
To find Adult Protective Services in your area, call Eldercare Locator, a national resource line. 1-800-677-1116, or visit their website at: https://eldercare.acl.gov.
Furthermore, you can also report scams online to the Federal Trade Commission.