Scams Targeting Older People Continue To Rise
Older Americans lose billions annually to financial abuse. Learn about the scams and financial schemes that older people may encounter so you can protect yourself and those in your care.
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Scams that target older people, sometimes called "elder fraud," are a serious and growing concern. The Consumer Financial Protection Bureau (CFPB) estimates that older Americans lose billions of dollars each year to financial abuse perpetrated by strangers and, sadly, even trusted family members or caregivers.
In 2023, complaints about financial abuse of older people increased 14% while reported financial losses increased 11% over 2022, according to the FBI's Internet Crime Complaint Center (IC3). Their 2023 Elder Fraud Report says victims lost an average of $33,915 to these crimes, totaling more than $3.4 billion. But these aren't just numbers — in fact, a BECU employee recently spotted an elder fraud attempt. The employee contacted authorities before the victim gave thousands of dollars to a con man who approached the senior at a local hardware store.
Common Scams Targeting Older People
Below we outline the most common social engineering tactics scammers use. Learn how these scams work, how to identify the warning signs, and what you can do to protect yourself and the older people in your care.
Tech support scams were the most widely reported type of elder fraud in 2023. They start with scammers initiating contact through calls, emails, texts and other methods, claiming to be from legitimate companies and offering technical support. They persuade victims to download software that gives them access to the victims' computers, exposing sensitive information, including bank details.
How to avoid these scams:
- Be cautious of unsolicited contact and never send money to someone you don't know or whose identity you can't verify.
- Never download software at the request of an unknown person who contacted you.
- Never allow an unknown person who contacted you to take control of your computer for any reason.
- Never send cash via mail or shipping companies.
An imposter or impersonation scam starts with someone reaching out to you, claiming they are with a government agency, like the IRS, or financial institution, like BECU. They might already know your name and sometimes they offer official-sounding credentials. The scammer will eventually give you a fake reason to send them money or share sensitive information, pressuring you with made-up consequences and urgency.
Remember:
- BECU employees will never ask for your Online Banking password.
- We will not ask for your account code word if we call you. If we do need it, we will ask you to end the call and call us back — it is safer if you initiate the contact.
- We will not ask you for your three-digit CVV code on the back of your debit or credit card.
- We will not include a link in a text message that directs to a login page.
- We will not request one-time security codes or Zelle® SMS validation codes if we initiate contact.
- Text messages we send about account activity ask you to reply YES or NO, or advise you to call the BECU servicing number on the back of your card to verify card usage.
- We will never request that you buy gift cards or cryptocurrency or ask you to move your money to "protect" it.
The Federal Trade Commission (FTC) receives tens of thousands of reports of romance scams each year. This tactic, also called "catfishing," involves a criminal adopting a fake online identity and pretending to be romantically interested in their victims on social media or dating websites. They build rapport with their victims, sometimes over the course of weeks or months, until they eventually make an urgent request for money.
The Federal Deposit Insurance Corporation (FDIC) offers these warning signs that you might be talking to a financial predator.
- They provide excuses why they cannot meet you in person, such as they're living or traveling outside the country; working on an oil rig; in the military; or a doctor working with an international organization.
- They're overly flirtatious and complimentary, showering you with affection and attention.
- They ask you to keep your relationship with them a secret.
- They're nosy about your finances.
- They pressure you to share your private financial information.
Older Americans lost more money to investment scams than any other type of scam in 2023, with reported losses exceeding $1.2 billion. Investment scams are complex. Their strategies vary, but they all involve deceiving targets into investing money under false pretenses. Common examples include Ponzi schemes, pyramid schemes and market manipulation (sometimes called "pump and dump").
Here are some other types of investment scams to watch for:
- Advance-fee loans: Some companies promise you a loan or credit card even if you have poor credit history. In exchange, they ask you to pay a "processing fee" (or a similar fee) first. Those are likely scams. Be wary of any lender claiming they can get you credit or a loan before reviewing your credit history.
- Cryptocurrency scams: Scammers ask their targets to withdraw large sums of cash and deposit it into certain cryptocurrency ATMs that they specify. The scammer then transfers it to their cryptocurrency accounts. The scammer might also pressure victims into opening cryptocurrency accounts.
- Real estate investments: Sometimes scammers use grand claims to pitch investing in "luxury" or "world-class" property development. A real estate scam could also involve inviting targets to pay for real estate investment "training." Their claims are often unreliable and misleading.
Identifying Financial Exploitation and Abuse of Older People
Recognizing financial abuse can be challenging, as perpetrators often use manipulation and coercion to maintain control over their victims. The FDIC offers some general guidelines to help you identify financial exploitation in complicated situations.
Exploiting power of attorney (POA) is complicated, and the abuse can take many forms. Individuals might pressure you to give them POA. Those granted POA might spend your money on themselves rather than use it to pay your expenses. Or they might do other things you haven't authorized, like changing your beneficiaries.
What you can do:
- Only appoint someone you're sure you can trust, and make sure they know your wishes and preferences.
- Avoid appointing a person who mismanages their own money or has problems with substance abuse or gambling.
- Tell friends, family members, and financial advisors about your POA, so they can look out for you.
Unfortunately, it's also common for caregivers to commit intentional or negligent acts that cause harm to the vulnerable, older people in their care. Before hiring others to open your mail, pay your bills or manage your finances, carefully vet those individuals or companies. Here are some steps you can take to protect yourself, if you depend on others for care.
- Secure your private financial documents and valuables, including checks, financial statements, and credit cards. Consider using a locked file cabinet.
- Require receipts for purchases made by helpers for reimbursement and never let them use your cards for errands.
- Monitor your financial accounts and consider setting up transaction alerts that your family can monitor for you.
- Never give out blank checks or checks with only your signature.
- Never lend hired helpers money or personal property.
- Regularly check your credit score for free at annualcreditreport.com.
Some scam artists target older homeowners using high-pressure tactics to sell unneeded and overpriced contracts for "home improvements." They then charge more than their quoted price and/or their work does not live up to their promises. When the homeowner refuses to pay for shoddy or incomplete work, the contractor or an affiliated lender threatens foreclosure on the home.
In a similar scam, a contractor might show up at your door and pressure you to go to a local bank branch or Neighborhood Financial Center with them to get cash to pay for a job you do not want done. If this happens, ask to speak with the bank manager. They can call the police for you.
What You Can Do To Protect the Older People You Care For
As our loved ones age, it is important to take steps to protect them from financial exploitation. Financial exploitation is the fastest-growing form of elder abuse and often goes unreported, according to the National Consumer Voice for Quality Long-Term Care. Here are three key strategies to safeguard their financial well-being.
Monitor Financial Accounts
Regularly review bank statements, credit card bills, and investment accounts for any unusual activity. Look for changes in spending patterns, large or unexplained withdrawals, or new accounts opened without your knowledge.
Be Wary of New "Friends"
Seniors are often targeted by scammers who befriend them with the intention of exploiting their finances. Encourage elderly family members to be cautious when forming new relationships, especially if the individual seems overly interested in their financial affairs.
Explore Legal Protections
Explore legal options, such as establishing power of attorney or setting up a trust. Consult with a qualified attorney to ensure that legal documents accurately reflect the individual's wishes and provide appropriate safeguards against exploitation.