Why Older Adults Are Targets for Financial Fraud
Scamming elderly, vulnerable, and unsuspecting adults out of their money is a lucrative business for fraudsters — and the devastating financial damage inflicted by their scams is on the rise. Elder fraud is a crime — an act of targeting older adults in which attempts are made to deceive with promises of goods, services, or financial benefits that:
- Do not exist
- Were never intended to be provided
- Were misrepresented
In other words, financial exploitation is the illegal or improper use of an older adult’s funds or property.
Knowing what it is — and being able to identify the ways fraudsters identify, target, and abuse their victims — is key to stopping these criminals in their tracks.
Common types of elderly fraud
According to the National Council on Aging (NCOA), these are the five top financial scams targeting older adults:¹
1. Government imposter scams. Fraudsters pretend to be calling from government agencies such as the IRS, often using fake phone numbers or caller IDs to threaten prosecution for unpaid taxes unless victims send them money. In another popular scam that’s a major source of identity theft, fraudsters posing as government officials threaten to cut off Medicare or Social Security benefits unless personal information is disclosed to verify identity.
2. Fake prize scams. Many people are familiar with sweepstakes/lottery scams. Scammers call targeted victims to tell them they’ve won fake prizes and, if they want to claim their winnings, must send cash or gift cards up front to cover non-existent taxes and processing fees.
3. Robocall scams. One of the most frequent scams of this type is the “Can you hear me?” call. When the elderly person answers “yes,” the scammer records the response and hangs up. Fraudsters use sophisticated worldwide phone technology to carry out a variety of scams with illegal voice signatures to pay for fake services from reputable businesses or to authorize unwanted charges on stolen credit cards.
4. Computer tech support scams. The elderly population’s lack of knowledge about computers and cybersecurity plays right into the hands of these scammers. They hack into the phones and computers of the elderly claiming their equipment is damaged and needs to be fixed. They give them a support number to call and, when they do, victims are asked to give scammers remote access to their systems or pay fees to have them repaired. (It’s important to remember that legitimate tech support personnel will never contact you to fix an issue.)
5. The grandparent scam. This type of scam tugs at the heartstrings — literally. Scammers call grandparents and impersonate grandchildren with fake emergencies. Once the fraudsters secure the grandparents’ trust, the fake grandchildren ask for funds to get them out of trouble or help with urgent financial problems (i.e., bail, illness, eviction, car repairs). Of course, the fake grandchildren beg the grandparents not to tell anyone (especially their parents or other close relatives) that they sent money or gift cards.
Unfortunately, there are many other types of financial fraud where the elderly are prime targets — romance scams, investment fraud, and home repair schemes, to name a few. Keep in mind that scams are designed to throw victims off guard — and they can happen to anyone.
Next steps
There’s nothing to be ashamed of if you or elderly loved ones have been victimized by scammers. These three articles may provide further insight to guide and help you or members of your family deal with the unfortunate circumstances.
Signs an Elderly Loved One Is a Victim of Financial Fraud
By: Hugo Figueira, Private BankerThese red flags could signal scammers are committing financial fraud with a vulnerable loved one’s money.
Read More
How to Handle the Scamming of Elderly Loved Ones
By: Constance M. Moore, MA, CSA, CMC, CDP®, Assistant Vice President, Client Care SpecialistRead More
¹Genevieve Waterman, Director, Economic Security, National Council on Aging, “The Top 5 Financial Scams Targeting Older Adults, https://ncoa.org/article/top-5-financial-scams-targeting-older-adults, July 27, 2022.
Certified Senior Advisors (CSAs)® have supplemented their individual professional licenses, credentials, and education with knowledge about aging and working with older adults. It is recommended that you verify the validity of any professional’s credentials with whom you conduct business and be sure you completely understand what those licenses, credentials, and education signify. The CSA certification alone does not imply expertise in financial, health, or social matters. For more details visit www.csa.us.
The opinions and other information in the commentary are provided as of November 2, 2022. This summary is intended to provide general information only, and may be of value to the reader and audience.
This material is not a recommendation of any particular investment or insurance strategy, is not based on any particular financial situation or need, and is not intended to replace the advice of a qualified tax advisor or investment professional. While Commerce may provide information or express opinions from time to time, such information or opinions are subject to change, are not offered as professional tax, insurance or legal advice, and may not be relied on as such.
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