Elderly Scams To Watch Out For
Nov 13, 2023
According to the most recent FBI Internet Crime Report, Americans aged 60+ lost $1.7 billion to fraud last year. That’s the highest loss amount reported out of any age group. Why is that? Older adults tend to be tech-savvy and more likely to be home during the day to answer phone calls or reply to emails. The elderly tend to be more trusting of people, especially those they think appear to be looking out for them. The elderly may also suffer from cognitive or physical impairments that prevent them from using their best judgement. They have also accrued a lifetime of savings and own their homes.
Here are a number of common scams that target the elderly. We hope this is helpful for our members to avoid falling into these traps, whether you are elderly yourself or have loved ones that may be susceptible.
The grandparent scam is a type of fraud that claim the victim's grandchild is in trouble. Imposters pretending to be the police call and say that their grandchild has been in an accident or is involved in a crime. Scammers will then ask their targets to take out large sums of money or make a wire transfer to “save” their grandchild. The scammer will even use the real name of the victim's grandchild along with other identifying information that they find online to make the scam more believable. In other cases, the scammer will even pretend to be the grandchild and claim to be in trouble. In a recent version of this scam, fraudsters send ride-sharing services like Uber to pick up the cash in an envelope.
Warning signs of grandparent scams:
• You receive an unsolicited call claiming that a grandchild or loved one is in danger.
• The caller asks for money as cash, gift cards, or wire transfers.
• The caller won’t let you get off the phone or threatens you if you try to verify the information.
• The caller uses deception, intimidation, and coercion to force you to act quickly.
Government Imposter Scam
In this senior scam, fraudsters contact older people claiming to be representatives from a well-known government agency. This could include Medicare, the Internal Revenue Service (IRS), or the Social Security Administration (SSA). Government imposter scammers use different tactics. Here are a few examples:
Medicare scams: Scammers claiming to be Medicare representatives call their victims to “verify” their Medicare number. If you oblige, they’ll use it to steal your health benefits (i.e., medical identity theft). Or, they might claim that the victim needs to pay a fee to receive a new card or special treatments and ask for their credit card numbers.
IRS scams: During tax season, scammers will call elderly people claiming to be from the IRS and saying there’s an issue with their return. They’ll collect information to “secure” your tax file, but in reality, they’ll use it to file phony tax refunds and commit identity theft.
Social Security scams: In this scam, the imposter claims your SSN has been suspended due to an alleged crime. In order to reinstate it, they will demand payment usually in the form of gift cards.
FBI or law enforcement scams: Scammers will even call claiming that there is a warrant out for the victim’s arrest. If they don’t pay a fee or relinquish their financial information, they could go to jail.
Remember, these government agencies will almost never reach out to you over the phone — especially if it’s something as grave as a crime. If you do receive a call, hang up and call the agency’s official phone number.
Warning signs of government imposter scams:
• You get an unsolicited call from someone claiming to be from a government agency.
• The caller uses threatening language and wants you to pay them using gift cards or wire transfers.
• The caller asks for your sensitive information, like your SSN, Medicare number, or credit card.
Elder Financial Abuse
Elder financial abuse is an unfortunate occurrence because it involves a trusted person the victim knows such as a family member, close friend, or caregiver. These individuals try to gain access to the senior’s savings, credit, assets, or trick their victim into signing over access or power of attorney. They might even threaten to withhold care if they don’t receive access.
Warning signs of elder financial abuse:
• Unfamiliar charges, new accounts and loans, or credit inquiries that you or your elderly loved one didn’t make.
• Calls from companies or credit providers about debt you didn’t take out.
False investment scams
In an investment scam, criminals pose as prudent financial advisors. They'll call unannounced with what appears to be a lucrative investment opportunity. However, this is an attempt to extract transaction fees or steal “investments” from their targets.
There are several types of investment scams that specifically target seniors:
Ponzi schemes: A Ponzi scheme uses the money from new investors to pay existing ones (rather than generating any actual returns). Ponzi schemes target seniors by promising high returns with little to no risk.
Illegitimate bonds and certificates of deposits (CDs): In these scams, fraudsters use low-risk investments to trick wary seniors into investing, but these investments either don’t give the return that they promise or don’t exist at all.
Charitable gift annuities: Here, a donor gives a large sum of money as a gift in return for a fixed income stream. But often, these charities don’t exist and you’re putting money right into the scammer’s pocket.
When it comes to avoiding senior investment scams, remember the golden rule of fraud: If it seems too good to be true, it probably is.
Warning signs of false investment scams:
• They promise high returns with little or no risk involved. No investment is 100% safe or can guarantee returns.
• The “advisor” uses high-pressure sales tactics to get you to act quickly and without doing your due diligence.
• You’re unable to withdraw your principal investment.
Tech Support Scams
In this type of fraud, the scammer masquerades as a tech support representative from a company you trust like Apple or Microsoft. They’ll claim that your computer or device is at risk of being infected by viruses and then trick you into granting them remote access or paying for software that you don’t need. Sometimes, the goal is to trick the victim into downloading what they think is helpful software. But when they do, it’s actually malware that opens up the potential for cyber attacks that target the victim’s banking information. This scam often happens through phone calls, but it’s also common to see pop-up ads on websites targeting seniors.
Warning signs of tech support scams:
• You receive unsolicited phone calls about tech support. Companies like Apple will never proactively call you about these issues.
• A pop-up ad on a website claims that your device has viruses or promises to “speed up” your computer.
• The caller uses fear tactics to trick you into downloading software or clicking on links in emails.
In this type of elder fraud, scammers create fake personas on dating apps or social media to lure their targets. Con artists will research you online and use details that you’ve shared publicly to entangle you. Once they establish a rapport, scammers begin to request money, often in the form of gift cards, travel expenses, or healthcare costs. Many victims of romance scams are pressured into fraudulent investments, especially involving cryptocurrencies. Always keep yourself safe and be aware of the dangers of online dating.
Warning signs of elderly romance scams:
• The “relationship” moves at a frantic pace, with the other person claiming to be irrevocably invested.
• They promise to meet up in person or on video chat but always come up with an excuse at the last minute.
• They ask for money or financial help for family or healthcare issues.
Reverse mortgage scams
Reverse mortgages allow seniors who have built equity in their homes to create a steady and reliable stream of income. Reverse mortgages are available to homeowners over the age of 62 as a way to access their home equity. Scammers us this product to target the elderly with billboards, ads, and fliers for reverse mortgage scams. They’ll claim to be helping you get access to your equity. But in reality, they either steal the money or even commit deed fraud and “steal” your home.
Here are a few other variations of a reverse mortgage scam:
Mortgage relief: Seniors in need of financial aid might want to use a reverse mortgage to avoid foreclosure. Scammers target them with claims of fast approval on loans in exchange for an upfront fee.
Fraudulent contractors: Sometimes scammers will come to your home and offer free consultations. They’ll convince elderly homeowners to take out a reverse mortgage and pay for pricey and unnecessary repairs or home “updates.”
Warning signs of reverse mortgage scams:
• High-pressure sales tactics that try to get you to consent to a reverse mortgage without doing your due diligence.
• Someone claims that they need power of attorney in order to finalize a reverse mortgage.
• Contractors or vendors suggest that you take out a reverse mortgage to pay for costly repairs.
With all these (and more) potentially devastating scams, how can you protect yourself or your loved ones for falling victim? Here are some ways to prevent these scams from making you a victim.
• Set up credit monitoring and identity theft protection through credit bureau companies like Equifax, Experian, and TransUnion. There are also companies that specialize in credit and identity theft security. Research these through reputable sources to find one that best suits your needs.
• If you are contacted with any potential scam, the best thing you can do is STOP. Don’t be pressured into giving any personal information no matter how legitimate it sounds. Say you will call back the agency number on your own, or consult with friends or family before you do anything
• Know that anyone can be scammed and do not feel embarrassed to report suspicious activity or have open communication with your loved ones to help you determine if there is fraud involved
• ALWAYS be suspicious of any unsolicited call or communication that requires you to give any personal information or send money.