Fraud targeting seniors, often referred to as elder fraud, is a growing issue that affects not only the financial stability but also the emotional well-being of older adults. Seniors can be prime targets for scammers, as they are generally perceived to have more assets and may sometimes be less familiar with certain technological advancements.
In this blog, we will explore elder fraud, why it happens, how to recognize it, and most importantly, how to protect older adults from falling victim to scams and swindles.
What Is Elder Fraud?
Elder fraud is a term used to describe financial crimes that specifically target older adults. This type of fraud can range from illegal withdrawals from an individual's bank account to investment fraud. The ultimate goal of such fraudulent activities is to deceive seniors into willingly or unwittingly handing over money or sensitive information to scammers.
Unfortunately, elder fraud incidents are on the rise. In fact, the total losses reported to the FBI Internet Crime Complaint Center (IC3) in 2023 for those over age 60 was over $3.4 billion, nearly an 11% increase from reported losses in 2022. The FBI notes that the numbers are likely higher as many crimes aren’t reported to the IC3.
Why Are Older Adults Targeted?
Several factors make seniors a target for fraudsters:
1. Financial Savings
Older adults often have significant savings, own their homes, or have good credit, making them appealing targets.
2. Perceived Vulnerability
Scammers may believe seniors are more susceptible to deception or may suffer from cognitive impairments that can affect judgment.
3. Inexperience with Technology
Some older adults are less familiar and confident with digital technology and may not recognize deceptive online practices.
4. Politeness and Trust
Many seniors grew up during a time when it was standard to be polite, philanthropic, and trust others, which are traits that scammers exploit.
5. Isolation
Older adults who are isolated, lonely, or grieving can be more vulnerable to scams, particularly those scams that offer fake companionship or communication.
What Is Elder Family Financial Exploitation?
Elder family financial exploitation (EFFE) occurs when an older adult is the victim of financial exploitation by someone in their own family. It is defined as being when that family member uses or withholds their financial assets or personal property in ways that are illegal, unauthorized, or improper.
Unfortunately, EFFE is one of the most common types of elder abuse that often goes unrecognized and unreported. Here are a few strategies shared by the University of Minnesota Extension Department of Family, Health, & Well-being:
- Normalize conversations about elder family financial exploitation.
- Stay involved with aging friends’ or family members’ lives to stay tuned in to any warning signs about money management.
- Recognize windows of opportunity for financial exploitation, like losing a spouse or cognitive decline.
- Trust your instincts and act quickly if you suspect financial exploitation.
If you suspect someone of perpetrating EFFE on a senior friend or family member, reach out to your local Adult Protective Services (APS) to file a report. Contact the victim’s bank, credit union, credit card company, or other financial services provider as soon as possible. You can also seek guidance from a local ombudsman if your friend or famly member resides in a long-term care or assisted living community.
How Seniors Can Recognize Fraudulent Activity
Awareness of common scams is essential. Examples of elder fraud include:
- Telemarketing/Phone Scams: Calls from fake IRS agents or tech support, and offers for free prizes or vacations.
A telemarketing or phone scam might look like this:
- You receive a phone call from someone claiming to be from the IRS and says that you owe a lot of money in back taxes and are in danger of losing your home, unless you wire money to them immediately.
- You receive a text message from a number you don't recognize saying that your cell phone data has been compromised and that you must verify your personal information in order to keep your phone data safe.
- You receive a phone call from a company claiming to be giving away a free vacation timeshare rental and all they need is a copy of your passport.
- Internet Fraud: Phishing emails, fake virus alerts, or online dating scams.
Internet fraud might look like this:
- You receive an emailed link you don't expect from a company with an email address that looks somewhat familiar but is misspelled.
- While you are browsing the internet, you see a window pop-up claiming that your computer is locked and that you need to install antivirus software to unlock it.
- Investment Schemes: Pressure to invest in questionable financial products or opportunities.
Investment schemes might look like this:
- Someone promises you a high return with little or no risk on gemstones, rare coins, precious metals, or similar investment opportunities.
- A company sells you stocks, assets, or partnership units and has not registered its securities.
- Medicare/Health Insurance Scams: Requests for personal information under the pretense of updating medical records.
Medicare/health insurance scams might look like this:
- You see a health insurance ad on social media offering cash, gifts, or other perks.
- Someone other than your insurance company contacts you about health insurance and asks you to pay or provide financial and personal health information.
- Grandparent Scams: Callers pretend to be a grandchild in trouble, appealing to the older adult's emotions to donate money. Keep in mind that with AI technology, voice patterns can be faked to sound just like a loved one.
Grandparent scams might look like this:
- Someone calls and impersonates your grandchild and then shares that they have been in an accident or arrested and need you to transfer money immediately. The caller may ask you not to tell their parents about the conversation.
- Someone frantically calls pretending to be your grandchild, asks you to send gift cards or complete an urgent request, and then hands over the phone to someone posing as a lawyer, doctor, or police officer who will explain everything to you.
How to Protect Older Adults from Elder Fraud
Symptoms of being victimized can include unusual bank activity, secrecy about finances, new relationships with much younger friends or companions, and anxiety when discussing money.
1. Communication
Talking regularly with your aging friend or family member about finances can help you detect unusual activity and educate them about potential scams.
2. Use Caution
Assist your friend or family member with thoroughly researching unsolicited emails, phone calls, or mailings to determine whether the offer is a scam or legitimate before providing any information or money.
3. Stay Informed
Keep up with the latest fraud schemes by subscribing to newsletters from fraud prevention websites or government resources like the Federal Trade Commission (FTC).
4. Protect Personal Information
Encourage the use of strong, unique passwords for online accounts and safeguarding personal information.
5. Monitor Financial Affairs
Use services that alert for unusual bank activity, and stress the importance of establishing power of attorney or becoming a joint account holder to help monitor accounts.
6. Report and Discuss
Let seniors know it’s not embarrassing to fall for a scam. The important thing is to report it and get support.
7. Security Software
Install reputable security software on computers and devices to protect against malware and phishing attempts.
8. Don’t Click on Pop-Ups or Email Attachments
Set up pop-up blockers for your aging friend or family member and encourage them not to click on them or open email attachments from unknown senders to avoid malware.
Supporting Victims of Elder Fraud
It's crucial to act fast if you suspect elder fraud. Contact financial institutions to stop fraudulent transactions, and report the incident to authorities like the police, the FBI, or the FTC. Visit reportfraud.ftc.gov >>
Elder fraud is a serious problem. By staying vigilant, informed, and supportive, you can help shield older adults from the financial and emotional damage caused by these selfish acts of theft. Remember, the best defense is a proactive approach to education and vigilance.
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