Source: Federal Bureau of Investigation: Elder Fraud Report 2020
The Federal Trade Commission (FTC) says protecting older consumers is one of its top priorities. Unfortunately, older adults are disproportionately affected by fraud—elder fraud targets older adults for financial exploitation. According to the FBI, senior citizens lose nearly $3 billion annually to elder fraud. While the average loss was more than $9,000, almost 2,000 elderly adults lost more than $100,000 in 2020.
Scammers prey on the elderly using various fraud schemes, such as romance scams, impersonation of government agencies, lottery scams, and more.
Seniors are often viewed as prime targets for elder fraud because they have money, such as retirement savings, and are seen as more polite and trusting. In addition, elderly adults may live alone and be lonely, making them more likely to engage with scammers.
According to the FBI, seniors are also less likely to report elder fraud, which makes it easier for criminals to get away with senior citizen fraud.
Scammers have no shortage of schemes to try to trick older adults into becoming victims of elder fraud. Here are some of the most common elder scams being used today that you should be aware of.
Romance scams often target single or lonely seniors. Scammers try to befriend seniors and develop online relationships. A scammer may offer you companionship or potential romance before springing the trap. The scammer then asks for money to help them travel to meet you or to pay bills.
Scammers pretend to be from a government agency, such as the Social Security Administration. They may claim that your social security number has expired, been suspended, or stolen. They then ask for personal information to confirm your identity, including providing your Social Security number.
Scammers will often threaten arrest, prosecution, or dire actions if you do not comply. For example, a scammer may claim that you will lose your Medicare benefits if you don’t act.
Criminals pose as tech support teams and offer to fix computer problems that do not exist. Not only do the scammers charge for their services, but they also gain remote access to your computer and can then steal bank account numbers and other sensitive information.
According to the FTC, older adults are nearly six times more likely to be victims of tech support scams than younger adults.
In this scam, you are told you have won a lottery, sweepstakes, or prize. To claim your winnings, you must pay taxes on the winnings, a fee for processing, or a delivery fee.
Criminals “detect” a problem at your home, such as roof leaks. Once they get a down payment on the repair, they then disappear.
Scammers frequently use email, text, or calls to steal a person’s identity or personal information. For example, one common phishing scam involves an email that may appear to be from an elder’s bank or credit card asking them to update information. They are then directed to a fake website to enter their password. In other scenarios, victims of senior citizen fraud are tricked into clicking on a link; doing so launches malicious software that extracts personal information from a victim’s computer.
In this particularly nefarious scheme, criminals lie, threaten, or intimidate elderly victims into signing a legal document allowing access to their accounts or property. Documents such as a power of attorney may give criminals unfettered access to your bank or investment accounts.
In a grandparent scam, a scammer will call you and pretend to be your grandchild, asking for money for any number of reasons: medical bills, auto repairs, rent money, or bail. The scammers will also plead with you not to tell their parents.
If you are unsure whether something is legitimate, your best approach is to terminate any contact with someone and make a call to verify the information.
For example, if someone claims to be from the police department with an outstanding warrant, hang up and call the police to check. The same applies to calls from someone claiming to represent Medicare or the Social Security Administration. If you get a call or email that appears to originate from your bank, broker or even a company like Amazon, ignore it and check with the company directly.
Here are other ways to beat and avoid elder fraud:
Finally, be aware of the red flags that may indicate activities leading to elder fraud.
Blocking scam calls from getting through in the first place can help prevent senior fraud. There are various apps you can install on your cell phone, including ones provided by your carrier, to stop scammers from reaching you.
According to the Better Business Bureau, these ten red flags of senior citizen fraud are the most common to look out for:
If you have become a victim of elder fraud, call your local police department to report it. You can also call the Department of Justice (DOJ) National Elder Fraud Hotline at (833) FRAUD-11 (372-8311) from 10 am to 6 pm ET Monday through Friday.
Anyone age 60 or older can get free help in reporting. In addition, the DOJ provides experienced caseworkers at no cost to help assist with reporting fraud to the appropriate authorities. Caseworkers will also offer advice on how you can take appropriate action to recover funds or protect yourself from further elder fraud.
The DOJ also provides an Elder Abuse Roadmap for Financial Scams. By answering a few simple questions, the roadmap will direct you to the right agency to report senior citizen fraud.
If you provided a scammer with your bank account or credit card information, call your financial institution or card issuer and report the fraud. Ask them to reverse the charges.
Scammers are ultimately after your money, so it's essential to safeguard your bank and credit card accounts. Follow our top 15 things to protect your bank account and make sure your money doesn't fall into the wrong hands.
You should also alert the consumer credit reporting bureaus. Place a fraud alert with Equifax, Experian, or TransUnion. Once you set up a fraud alert with one credit agency, they will notify the others.
You can ask for a fraud alert to be placed on your account by mail, but the credit bureaus recommend reporting it online or by phone. A fraud alert will notify potential lenders to contact you directly before authorizing a new loan or credit card.
You can also freeze your credit, which limits access to your credit report. This will stop anyone from establishing new credit in your name (including you). Contact the credit bureaus for a credit freeze:
You can also request a credit freeze by mail. However, unlike a fraud alert, you must request a credit freeze from each of the credit bureaus separately.
Scammers have taken to posing as relatives of senior citizens in an attempt to steal hundreds and even thousands of dollars by playing the sympathy card.
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