Defrauding older adults is lucrative business. Worldwide, people aged 60-plus lost a combined $3.4 billion to financial scammers in 2023 alone. Financial scams are everywhere and no one is immune.
Fraudsters and con artists tend to go after older adults because they believe this population has plenty of money in the bank.
But it’s not just wealthy people who are targeted; older adults with low income are also at risk. Plus, many people are embarrassed to report financial scams, and they can be tough to prosecute, therefore criminals consider them “low risk.”
When it comes to stopping online scammers, knowledge is power. Here are descriptions of some of the most common scams targeting older adults.
• The grandparent scam. This one’s so effective because it exploits emotion. First, a caller gains trust by tricking their target into volunteering information, like a grandchild’s name. They may say something like, “Hi Gram, do you know who this is?” Then, with that name at the ready, they impersonate the grandchild — and ask for help with car repairs, late rent, a medical emergency, or even to post bond. They pretend to be in distress. They may even beg the grandparent not to tell anyone. In other versions of this scam, a caller claims to be an arresting police officer, doctor, or lawyer trying to help the grandchild. They prey upon emotion to pressure targets into sending money as quickly as possible. These scams are even harder to identify and resist thanks to artificial intelligence (AI). Today, con artists can clone real voices of real relatives and use them. Grandparent scammers often ask to be paid via gift cards or wire transfers. These don’t always require identification to collect, which means victims have no way to recover their money. Some victims report that a scammer showed up at their home, posing as a “courier” to pick up the money.
• Financial services scams. These work because they appear to come from a legitimate source: a bank, a mortgage company, or a debt collection agency. Scammers call, text, or send email messages that look and sound legitimate. They may claim that a checking or savings account has been compromised, and ask for personal information such as a password or Social Security number, to “secure” it. They may promise better rates or terms on a home loan. Or they may threaten arrest for unpaid medical bills that may or may not exist. These scammers know how to be convincing: they can easily fake the information on Caller ID; they know how to make email addresses and links look real. And they often will use threatening language to scare their victims into volunteering sensitive information or sending money. Usually, the people committing this type of fraud will demand immediate payment.
• Tech support scams. These prey upon the doubts and discomforts that many people have around computers. In fact, when it comes to fraud committed against older adults, tech support scams top the list. Typically, a person’s computer or phone screen will freeze or go blank. A pop-up message will appear with a phone number to dial for help. When the user calls it, the scammer on the other end will ask for permission to log on to the device remotely. This fake “tech support” representative also may demand a fee to repair the “issue.”
• Government impersonation scams. A callers pretends to be from the Internal Revenue Service (IRS), Social Security Administration or Medicare. They threaten to arrest or deport the person who picks up the phone if they don’t pay their “unpaid taxes”. Or, they may threaten to cut off Social Security or Medicare benefits unless the person provides personal details. This information can then be used to commit identity theft. Government imposters may demand prepaid debit cards, cash, or wire transfers as payment. Using special technology, they often “spoof” the actual phone number of a government agency or call from the same ZIP code (202 for Washington, D.C., for example).
• Romance scams. As more people turn to online dating, con artists are seizing the opportunity. Romance scammers create fake social media profiles and use them to gain trust and steal money. In some cases, these scammers may be (or pretend to be) overseas. They may ask their victims to pay for visas, medical emergencies, and travel expenses to come to the U.S. Romance scams can drag out for a long time. As a result, victims often lose a lot of money. The FTC found that in 2023 alone, more than 64,000 people reported a romance scam, with losses totaling $1.1 billion.
• Sweepstakes and lottery scams. The sweepstakes scam is familiar to many of us. Here, a bad actor calls with good news: the person answering the phone has won the lottery or a prize of some kind. In order to claim their winnings, that person must send money, cash, or gift cards up front, sometimes amounting to thousands of dollars, supposedly to cover “taxes” and “processing fees”. Of course, no prize is ever delivered.
• Robocall and phone scams. One common robocall scam is the “can you hear me” call. When the person who answers says “yes,” the scammer records their voice and hangs up. They then have a voice signature to authorize charges on items like stolen credit cards. Robocalling uses automated technology to dial large numbers of households from anywhere in the world. While there are legal uses for this technology, it can also be used to carry out a variety of phone scams, including false claims about expiring car or electronics warranties.
• Investment scams. This type of scam involves the illegal or alleged sale of financial instruments that typically Okay offer low risk and guaranteed returns. The use of cryptocurrency (digital assets such as Bitcoin) is common in investment scams. Cryptocurrency-related investment fraud cost adults age 60 and over $716 million in reported losses in 2023.