According to the Federal Bureau of Investigations, cases of elder fraud are on the rise. The FBI reports that financial abuse targeting older Americans rose 84% last year, with around 88,000 people aged 60 and above reporting claims of fraud. From impersonation scams, to false advertisements on social media, to romance scams and beyond—it is critical to know the warning signs and how to respond, so you can protect yourself and your loved ones from elder fraud.
Common Methods of Elder Fraud
Before elder fraud occurs, one key preventative step is to discuss fraud with friends and family. When everyone is aware that fraud is rife, and the ways in which fraudsters act, it becomes less likely that someone will fall for a scam. If you’re nervous about discussing scams with older family members, frame the conversation as a discussion of current events: you recently saw an article about how elder fraud is rising. Mention the details of common scams, which include:
- Relative in trouble – the scammer will impersonate a relative, saying they are in trouble (possibly in jail or in a foreign country) and need money wired immediately.
- Crypto investment – scammers use cryptocurrencies in a number of ways, whether encouraging bad investments or asking for crypto payment, which can’t be tracked.
- Romance scams – a “suitor” may reach out via social media or a dating site, start a virtual relationship, and eventually ask for money.
- Online shopping – fraudulent retailers sometimes target elders via social media and encourage them to purchase items which are faulty or never arrive.
- Investment or advice – an unqualified “financial advisor” may claim to be investing or managing money for a senior, when really they’re just pocketing the funds. Some elders are also offered an “investment newsletter” with steep monthly subscription fees.
Warning Signs Someone Is Being Scammed
Elder fraud is not always a one-and-done scam. Often, fraudsters target elders for the long-term, aiming to extract as much money as possible. If you suspect a fraud, speak to the family member immediately and, if possible, cut off the source of funds. A few warning signs to look out for are:
- Unusual transactions, such as frequent large withdrawals from a checking or savings account
- Credit card charges that nobody remembers making, or that link to merchants in another state or country
- A new friend—online or off—who seems overly interested in “helping” with financial decisions
- Diverting from a long-time retirement plan to invest in cryptocurrencies or other assets
Tips to Remember
Scammers are convincing, and can be very charismatic. Their strategies are persistent and always evolving. But, by recognizing the warning signs and taking action, it’s possible to keep scammers at bay. Here are a few tips to keep in mind if you are concerned about elder fraud:
- Develop ground rules – write out a list of ground rules and post it in a visible place. Rules might include: don’t answer unknown numbers; don’t purchase items or chat with unknown people via social media; don’t share financial or personal information with incoming callers.
- Never wire money – scammers want payment that can’t be tracked or reversed, hence the popularity of money wire or cryptocurrency fraud. By simply refusing to engage in any transaction outside a traditional financial institution, you can avoid many scams.
- Don’t be pressured – fraudsters try to convince their potential victims to act fast, without thinking carefully. If you feel pressured to share sensitive information or send money, take a pause and check in with a trusted contact first.
- Manage money together – sharing access to online accounts as a family can be a good way to mutually support each other in avoiding scammers. Look out for unexpected withdrawals or credit card charges, and most importantly, keep the financial conversation flowing.
- Report fraud – if you experience fraud, or even suspected fraud, report it to the Federal Trade Commission. The information provided by consumers helps the FTC to track cases and deploy preventative measures, to protect more people in the future.