(4 Minute Read) – Elder scams are on the rise and managing finances at any age takes discipline. You have to be protective and practical. Paying bills on time, saving for the future, and preparing for emergencies are all part of responsible financial management.
These disciplined practices are critical to setting ourselves up for financial security as we age. The more responsible we are during our working years, the better off we should be during retirement. Unfortunately, fraudsters know this all too well; it’s part of the reason they target seniors with their scams.
“We know that scammers often target seniors because they’re typically very trusting,” explains Alexa Holsten, Fraud and Security Investigator at Unitus Community Credit Union. “Seniors usually have significant savings, own a home, and have good credit. These are the exact traits fraudsters look for in their victims.”
The FBI reports that elder scams are likely to be a continuing problem as the elderly population grows. Scammers defraud seniors of more than $3 billion each year—and seniors don’t always report the fraud. They may be embarrassed or concerned that their relatives will think they can’t manage their own money. Seniors may not know how to report fraud, or if they do, they may not be able to give all the relevant information to investigators.
Common elder scams
Elder scam fraudsters use a number of different scams to steal money from their victims. You’ve probably heard of a lot of them:
- Government Imposter Scams – Scammers pose as government employees and threaten victims with arrest unless they hand over money.
- Romance Scams – Criminals pretend to be interested romantic partners, capitalizing on a victim’s desire to find a companion.
- Grandparent Scams – Victims get a call from a scammer, pretending to be a grandchild with an urgent financial need.
- Phone Spoofing Scams – Fraudsters pretend to be an employee at your financial institution to convince a victim to share sensitive information.
- Tech Support Scams – Either through a phone call or computer pop-up, a scammer gets remote access to a device and claims it needs fixing—at a cost, of course.
- Sweepstakes/Lottery Scams – 72% of these scams target the elderly, notifying them they’ve won a significant financial prize, but they have to pay fees, taxes, or duties to claim it.
- Medicare/Health Insurance Scams – Scammers pose as Medicare representatives to convince a victim to hand over personal information.
- Social Security Scams – A caller claims you owe money to the Social Security Administration, threatening to arrest you or suspend your Social Security Number if you don’t pay; scammers also promise a benefit increase in exchange for money.
- Investment Scams – Fraudsters contact you with investment offers like distressed real estate, untapped oil or gas deposits, gold trades, fake promissory notes, or “mirror trading,” in which the scammer will “mirror” the investments of a billionaire like Warren Buffett.
- Home Repair Scams – Unsolicited “contractors” show up at your door claiming you have an urgent home repair needed and they can fix it; they’ll ask for payment and never do any work.
- Charity Scams – Relying on seniors’ goodwill, scammers claim they’re raising money for a good cause, often capitalizing on current events or natural disasters, to get a “donation” that goes right into their pocket.
- Mail Scams – A letter disguised as a bill, ticket, charity, or sweepstakes is delivered to the victim, hoping they’ll fall for the con and send money or personal information.
“The reason these frauds are so common is because they work,” reminds Holsten. “Being aware of the tactics these con artists use can help set off an alarm when something doesn’t feel right.”
For the elderly, awareness is a first line of defense. But once a victim falls for a scam, they’re likely to be targeted again. Con artists create and sell “sucker lists” that identify past victims as someone to target for a future scam.
Even if you’re convinced you’ll never fall victim to fraud, your aging parents may not be so lucky. So what can you do if mom or dad are the target of these scammers?
“Consider getting an unlisted phone number, particularly if scam calls are frequent. It’s like a reset for someone who is a consistent target for fraud.”Alexa Holsten, Fraud and Security Investigator at Unitus Community Credit Union
Protecting your loved ones
You might consider these other steps to protect your parents from fraud:
- Opt them out of direct mail. They won’t receive junk mail, which means any solicitations that are delivered could be from scammers.
- Register their phone number on the “Do Not Call” list to keep telemarketers from calling their phone.
- Review their monthly statements, looking for any unusual charges.
- Look over their credit reports to ensure there aren’t any new accounts opened.
Know the risks of elder scams
Above all else, know the risks. AARP says “women are twice as likely as men to fall for elder financial abuse, especially when they’re in their 80s and live alone. For any scam, an especially vulnerable time is the three years after some major stress, such as the loss of a spouse or a change in health or housing.”
If you suspect you or a loved one are the victims of a scam:
- Stop communicating with the scammers immediately.
- Notify Unitus so we can help safeguard any financial accounts.
- Contact local police and file a report. You can also file a complaint with the FBI.
- Make sure you keep any evidence that can be used to find the scammers, including transaction information, prepaid cards, and all phone, text, or email communications.
Take a moment to review our Fraud Prevention Checklist.