Financial fraud targeting seniors is a growing concern that shows no signs of slowing down. Seniors are particularly vulnerable to scams due to various factors, such as their potential lack of knowledge about scams and their higher likelihood of having more money than younger individuals. According to a report by Consumer Affairs in 2022, seniors over the age of 70 tend to lose about 1.5 times more money when scammed compared to those under 70. Additionally, individuals over 80 often suffer 1.75 times more financial losses than those in the 70-79 age group.
Despite the increase in educational programs aimed at informing seniors about scams, the number of scams and resulting losses continues to rise. In 2023, there was a 14 percent increase in the amount of money lost due to financial scams targeting seniors. Identity theft through credit cards is one of the most common types of scams in 2022, resulting in over 441,000 cases.
When it comes to contacting seniors, fraudsters primarily rely on email and phone calls. Email communication accounted for 24 percent of all fraud cases, while phone calls ranked second at 20 percent. Interestingly, even though phone calls were less common, they resulted in significantly higher financial losses for seniors, with twice as much money lost compared to email scams.
Elder financial abuse is a widespread issue affecting approximately 10 percent of seniors each year, according to the Anti-Financial Crime Briefing. The United States alone experiences a minimum annual loss of $3 billion due to this form of abuse. Shockingly, up to 46 percent of elder financial fraud occurs within families. Family members employ various methods to gain control over an elder’s finances, including deception, physical coercion, power of attorney arrangements, fraudulent investments, and theft of Social Security checks. They may also liquidate bank and investment accounts, transfer assets, or max out credit cards.
Elder financial scams can take many forms, and while people of all ages fall victim to them, seniors are particularly susceptible. Some common scams include family imposters, tech support scams, investment scams, romance scams, fake sweepstakes and lotteries, real estate and home repair scams, and government imposters. Investment scams, in particular, result in the highest financial losses for seniors, amounting to $404 million in 2022.
Social media is also emerging as a platform for perpetrating fraud against the elderly. Although still less common than other methods, social media scams increased from netting $19 million in 2019 to a staggering $380 million in 2023.
One prevalent scam that the National Council on Aging (NCOA) warns about is the “Can you hear me?” robocall. Scammers record the senior answering “Yes,” which they can then use as a voice signature to authorize unauthorized charges on stolen credit cards.
Recognizing elder financial abuse is crucial in preventing further harm, even after it has occurred. The Bank of the Rockies suggests looking out for unexplained large withdrawals from various accounts, changes in behavior or emotions related to finances, sudden changes to wills or powers of attorney documents, alterations in living conditions and food supply, signs of neglect or dehydration, the presence of a new “friend” eager to assist with financial transactions, and indications of fear, social withdrawal, missing medical help, or lack of hygiene.
Certain individuals are more susceptible to financial scams targeting the elderly. CNBC reports that women are particularly vulnerable, especially if they are living in poverty. Loneliness, social isolation, declining mental abilities, and a slower grasp of new technology also increase susceptibility to scams.
Protecting seniors from scams and preventing elder financial abuse requires vigilance and providing information about potential scams. It is essential to stay informed about new scams through available public resources. If you suspect elder financial fraud, it is crucial to report it. Only 23 percent of financial thefts from 70-79-year-olds and 22 percent from seniors over 80 are reported, according to CompariTech. You can report elder financial fraud to the Elder Fraud Hotline at 1-833-372-8311 or contact your local police department or sheriff.
The Consumer Financial Protection Bureau offers comprehensive guides on managing other people’s money, including power of attorney, trustees, court-appointed guardians, and government fiduciaries. These guides are available in English and Spanish.
In conclusion, financial fraud targeting seniors is a serious issue that continues to grow. Seniors face an increased risk due to their vulnerability and potential lack of knowledge about scams. Investment scams, identity theft through credit cards, and scams perpetrated by family members are among the most common types of elder financial fraud. Recognizing the signs of abuse and staying informed about new scams are essential in protecting seniors from financial exploitation.
