Seniors have increasingly become targets for elder financial abuse scams in recent years. According to the Consumer Financial Protection Bureau, suspicious activity reports quadrupled from 2013 to 2017, impacting millions of individuls.1 The total amount lost by elders in financial scams annually is estimated to be over $36.5 billion.2
There are several scams elderly individuals can easily fall victim to, so we’ve broken down the most common to increase understanding and reduce the amount and likelihood of future senior fraud.
Family and Caregiver Scams
An estimated 90 percent of elder abuse perpetrators are family members – most times a victim’s adult child or spouse. They may sign a senior’s checks or documents without consent, charge excessive fees or rent, steal their money or property, or coerce them via physical or mental abuse for financial gain.
Other times, a stranger will contact an elderly person with an elaborate story of their hardship or an exciting opportunity, preying on their kindness and vulnerability for financial gain. Let’s take a look at a few of the most common methods:
- The Tech Support Scam: Criminals impersonating technical support from Apple® or Microsoft® contact individuals via phone or pop-up ad under the ruse of fixing an “urgent issue” on their device, which does not exist. Scammers may say fixing the issue is crucial to the life of the device to persuade an individual to allow their remote access. Once scammers gain remote access to a device, they may offer to fix an “issue” for a fee or monthly subscription. Scammers often urge their victims to pay via wire transfer, gift card, prepaid or cash reload card, or a money transfer app as these transfers can be challenging to reverse. If paid, the fraudsters may disappear or say the “issue,” which never existed, has been fixed – and the victim is out hundreds or even thousands of dollars.
- The Sweetheart Scam: A scammer poses as an attractive single on a dating website to lure victims — typically over 40 — in. Scammers often steer the conversation offline immediately via texts or phone calls to advance the relationship and their plot. Quickly after regular conversation develops, the scammer will ask for money to pay for a medical emergency, college tuition or long-awaited travel expenses to visit the victim. The victim sends hundreds or even thousands of dollars via wire transfer or reloadable cards to the scammer, who ultimately disappears after they get what they want.
- The Bogus Investigation: A stranger contacts an elderly individual impersonating a bank representative or law enforcement. The impersonating agent persuades the individual to withdraw a large sum of cash to help with a fake investigation involving funds embezzled from the senior’s account. The victim brings the alleged investigator the cash, where they seemingly mark the bills and place them in an envelope. However, using a distraction technique, the criminal switches the money envelope with one full of paper.
- The Check-Cashing Scheme: An elderly individual exiting or entering a financial institution is approached to cash a check due to an emergency. In return for cashing the check, the scammer says they will give the victim a percentage of the money. Three to seven days later, the check is returned to the financial institution as counterfeit, stolen, insufficient funds or closed account status, and the senior is left responsible for the amount of the check.
- The Check-Deposit Scheme: A stranger asks an elderly individual to deposit a check for them because they are out of town and lost their wallet. The next day, the stranger calls the victim, saying there is an emergency and they need the money immediately. Five to seven days after the senior transfers the money into their account, the check is returned unpaid and the full amount of the check is deducted from the victim’s account.
- The Prize Scam: A senior receives a call saying they have just won a prize – such as a new car, vacation or lottery – and all they need to do to collect is send a blank check to cover the cost of taxes. Once the check is sent, the prize is either never delivered or of very low value and the victim has lost a large amount of money.
- The Financial Advising Scam: A person claiming to be a financial advisor who specializes in elderly needs pressures a senior into purchasing risky, inappropriate investments. The victim trusts the “advisor” and takes money out of their sound investments or account, while criminals take a large percentage of that money for themselves.
- The Family Bailout Scheme: A stranger calls a senior posing as their grandchild from jail asking for bail money. Frazzled and concerned, the victim immediately offers their account information to get their family member out of jail. However, they later find out the request was a hoax.
Seniors deserve nothing short of respect in all facets of their lives and having a firm grasp on how these scams are conducted and realizing they are indeed fraudulent attempts can stop criminals in their tracks.
We are here to help – visit our security page for more information on preventing fraud and see the steps APGFCU takes to secure your personal information.