Financial scams targeting seniors are becoming more common and costly. In 2020, the FBI received over 791,000 senior fraud complaints with over $4.1 billion in reported losses.
Scammers often go after seniors because they believe they’re easier to target and might have a significant amount of money from life savings or retirement accounts. Read on to learn how to prevent senior fraud.
The Risk of Senior Fraud Scams
Seniors are considered a high-risk group when it comes to fraud scams. Research at Stanford University showed that scammers often attempt to evoke emotions from their victims to convince them to hand over money.
The research found that seniors are particularly vulnerable to the effects of heightened emotions on their decision-making skills and are thus more likely to fall victim to these scams.
Seniors are not only at a higher risk of becoming the victim of fraud scams, but senior fraud scams are complicated to investigate, prosecute, and recover lost money.
Many law enforcement agencies consider financial fraud cases to be a lower priority because they do not involve violence and usually do not result in the apprehension of criminals. However, these scams can be devastating to the senior population.
Many seniors who become victims of senior fraud become repeat victims. In the most egregious cases, seniors have lost entire life savings to scams. Once a scammer knows that a particular strategy works, they continue to use the same method to convince seniors to part with their money.
Types of Senior Fraud Scams
It is a common misconception that senior fraud is perpetrated mainly by strangers. Many scams and instances of fraud involving seniors are often perpetrated by family members or friends.
There are several types of senior fraud scams that are widespread and commonly used by scammers repeatedly.
Government Imposter Scams
Government imposter fraud schemes usually involve calling victims and pretending to be a representative from the Internal Revenue Service (IRS), Social Security Administration (SSA), or another government agency.
The imposter will tell the senior that they have unpaid taxes or debt and threaten penalties if they are not paid.
Grandparent/Grandchild Scam
A common way scammers commit senior fraud is to go after their emotions by impersonating a family member, such as a grandchild. The fraudster will pose as the senior’s grandchild and ask for money for a financial emergency like a medical bill or jail bond.
The fraudster will ask the grandparent not to tell anyone, so the fraud may not be uncovered for months, if ever.
Computer Scams
Since many seniors are not as technologically savvy as younger generations, scammers often commit senior fraud digitally. The victim will receive an email or pop-up message that their computer is compromised and needs to be fixed.
The fraudster will ask for access to the computer from which they will steal information or demand payment for the “computer repair” services. Scammers are skilled in making the messages and pop-ups look official, so some seniors never suspect that they aren’t real.
Lottery Scams
Lottery scams are another way fraudsters routinely commit senior fraud. Scammers will call or message the senior, notifying them that they’ve won a cash prize but need a payment to transfer or unlock the prize. Scammers have collected thousands of dollars through this scam.
These are just a few examples of common types of fraud. Fraudsters are always coming up with new ways to commit fraud, so it is essential to be aware of the different types of scams.
How to Avoid Becoming the Victim of a Scam
There are several ways to combat the risk of senior fraud, including through senior awareness and the help of family members.
Firstly, family members should check in often with their elderly relatives. Oftentimes, seniors will tell loved ones about these scams without recognizing the danger. To the senior, they may seem harmless, but relatives may be able to detect it as fraud and step in to report it and prevent further harm.
Secondly, seniors should be aware of the most common types of scams so they can look out for them and protect themselves. There are several online resources available through the AARP and other organizations aimed at educating seniors about senior fraud.
Family members should also be aware of these scams and take an active role in talking to their senior loved ones about how to maintain awareness.
Finally, seniors should verify anything they are unsure of with a trusted friend, family member, or professional. A second set of eyes can help identify possible fraud.
Seniors and their family members can prevent scammers from accessing vital information and funds by making small changes to their financial security. With a bit of effort, seniors can significantly decrease their risk of becoming victims of fraud.
