Financial scams that specifically target seniors are on the rise. According to statistics from the National Council on Aging, in 2021 alone, there were 92,371 older victims of fraud, which led to $1.7 billion in losses.
Financial crimes against vulnerable older adults who are on fixed incomes are not just heartbreaking but also devastating for these victims because they often have little recourse or few ways, if any, to recover their losses.
The best way seniors can protect themselves is to equip themselves with information to identify these scams so they don’t fall victim to these devious schemes.
Why Do Scammers Target Seniors?
First, it is important to understand why these con artists go after older adults. It is primarily because senior citizens tend to have savings and are likely to be more trusting. Senior citizens are also more vulnerable because they live alone.
Low-income seniors and those with more money in the bank are at risk. Seniors are also not often digitally savvy. So, when someone emails them pretending to be their bank or a vendor, an elderly person is more likely to open that email or click on a suspicious link.
In addition, a senior citizen may give out personal information or money to someone impersonating a loved one online.
Financial scams targeting seniors often go unreported. They are also some of the most difficult crimes to prosecute. So, criminals often view these as low-hanging fruit or low-risk crimes. But, for those victimized, it can lead to financial ruin.
1. The Grandparent Scam
This fraudulent activity occurs when a con artist reaches out to someone and pretends to be his or her grandchild. Scammers know well that grandparents have a hard time saying “no” to a grandchild or won’t bail out a grandchild if they think they are in trouble.
So, a scammer might reach out to an elderly person pretending to be a grandchild and act as if he or she is in a crisis, such as in prison. They may also pretend to be behind on bills and ask for financial assistance.
Often, these scammers ask the individuals they contact to send money immediately using a wire transfer or purchase gift cards. The scammer might also ask the person to keep their communication a secret from other family members to avoid rousing their suspicions.
If you receive such a call, it is best to verify the situation by calling a family member who knows the location of your grandchild. You could also ask the caller a few questions that only your (real) grandchild would know how to answer.
2. Fake Investment Scams Targeting Seniors
Criminals might also call senior citizens posing as financial advisors. They will call unsolicited with what may seem to be a lucrative investment opportunity. For example, they might call with a “ponzi scheme,” where scammers use the money from new investors to pay existing ones.
Some scams involve phony bonds and certificates of deposits. Some try to trick older adults with charitable gift annuities, where a donor gives a large sum of money as a gift in return for a fixed income stream. However, these charities don’t exist. The money goes right into the scammer’s pocket.
That is often a red flag when you are being lured with the promise of high returns with little or no risk. Scammers may also use high-pressure tactics to get you to respond and act quickly.
3. Fake Relationship (Romance) Scams Targeting Seniors
In this type of elder fraud, scammers create fake personas on dating apps or on social media to lure their victims. Fraudsters will reach seniors online and use details you may have shared publicly online to trap you.
Once they establish a rapport, fraudsters begin to ask for money often in the form of direct deposits, gift cards, travel expenses, or healthcare costs. There are red flags in these cases.
For example, if you find that “the relationship” moves quickly with the other person claiming they love you within days or weeks, that’s a warming sign. That is also a red flag if they are elusive about meeting in person.
4. Financial Abuse Through Deceit
Elder financial abuse occurs when someone tries to access the senior’s savings, credit, or assets by fraud. They could, for example, trick their victim into signing over access to bank accounts or give them power of attorney.
There have also been instances where individuals might threaten them if they don’t provide such access. Warning signs of elder financial abuse include unfamiliar charges, new accounts, and loans or credit inquiries that you did not make.
It is a good idea to sign up for credit monitoring with fraud alerts to keep your financial accounts secure.
5. Phishing Scammers Targeting Seniors
Because the elderly are slow to learn about technology, they become easier targets for email and Internet scams or “phishing” scams. Pop-up browser windows that look like anti-virus software can fool victims into clicking on windows or links that could expose their computers to scammers.
Phishing emails and text messages from a well-known bank, credit card company, or online store may appear. They may request the elderly person’s data, such as a log-in or Social Security number to verify that person’s account, or they ask the older adult to update their credit card information. Then, they could potentially use that information to steal money or more sensitive information.
6. Fake Job Offers – Work From Home Scams
Sometimes, seniors may be looking for a job opportunity simply to earn extra cash or stay active. You may come across offers promising easy income working from home but ask you to pay for training. Once you pay, you may find out that there is no job available.
Or if you provide your personal information, they may use it for illicit purposes. Criminals may also use individuals as “money mules,” where they may be asked to deposit money into their bank account to be transferred to someone else.
Criminals use this method to launder money, and you could be held personally liable even if you don’t know that you are involved in illegal activity.
7. Medicare and Health Insurance Scams Targeting Seniors
U.S. citizens over age 65 qualify for Medicare. Fraudsters often pose as Medicare representatives to get older adults to share their personal information.
Scammers may also provide bogus services for seniors at makeshift mobile clinics and then bill Medicare to take that money. Medicare scammers follow the latest trends in medical research, such as COVID-19 testing or vaccines and genetic testing.
8. Home Repair Scams targeting Seniors
Older adults who continue to live in their own homes may need help with home repairs. Scammers may try to knock on doors or call over the phone to offer home repair services.
If they live in areas that have recently experienced natural disasters like floods or hurricanes, seniors may also be the target. Scammers also sell home improvement services such as solar panels. In such cases, the fraudsters disappear after taking the initial deposit without providing the promised services.
9. Fake Burial Plan Scams Targeting Seniors
This is one of the most morbid and despicable forms of elder fraud, where scammers trick elderly people into buying burial plots that don’t exist. Even television commercials or advertisements posted in reputable newspapers and magazines may not mean that the business is legitimate.
Modern technology makes it incredibly easy for unscrupulous operators to create a façade of legitimacy. Contact your local Better Business Bureau or other reputable agencies in your area to make sure and do your due diligence before handing over the money.
10. Reverse Mortgage into Home Equity Scams
Many seniors have built equity in their homes that they want to turn into a reliable and steady income. Reverse mortgages are available to homeowners over the age of 62 as a way for them to access their home equity.
However, scammers target the elderly with ads to reverse mortgage scams, claiming to help people access their equity but steal the money or even steal your home.
Preventing Financial Scams Against Senior Citizens
Here are some tips to help prevent senior financial scams:
- · Regularly call or visit your loved one. Be suspicious if your older family member has a “new best friend” or someone trying to influence their life or decision-making.
- · Block solicitations by blocking out commercial mail solicitations. Use a call-blocking service or device to block robocalls.
- · Monitor caregivers to make sure they are not exploiting your loved one.
- · Set up safeguards at the bank, such as placing spending limits or limiting the number of withdrawals.
- Understand how the Telephone Consumer Protection Act can protect your loved one.
