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How to Protect Against Senior Fraud 

Elderly fraud and scams are on the rise, as older adults shift online in a big way – and so do scammers targeting their finances. Here are tips to protect against senior fraud.

By Karen Lynch | American Express Credit Intel Freelance Contributor

7 Min Read | August 4, 2021 in Money

 

At-A-Glance

Older adults are turning to the internet and social media more than ever – a trend that accelerated in 2020 and 2021.

But they’re still prone to elder scams and in fact, digital elder scams have overtaken phone scams.

Here are tips on how older Americans can protect themselves.

Older adults have taken to using the internet and social media more than ever. The problem is, scammers have followed them online, with official statistics showing online and email senior scams overtaking telephone rip-offs for the first time.

 
A report from the Federal Trade Commission (FTC), which works to protect older adults under the Telemarketing and Consumer Fraud and Abuse Prevention Act, found that senior fraud initiated by online or email contact caught up to phone contact in the third quarter of 2019, at 39% each.1 The FTC report, Protecting Older Consumers, shows how the trend accelerated from there: By the second quarter of 2020, online and email hit 50% and phone-initiated contact dropped to 24%. Further, according to the FBI, online scams targeting Americans over 60 soared 55% in 2020, growing to more than 105,000 self-reported victims from approximately 68,000 in 2019.2

 

Why Scammers Target Older Adults

Scammers target seniors for many reasons. People in their 60s or over have often accumulated significant wealth in their lifetime. Most have regular payments coming in from Social Security. But the older they get, the more vulnerable they may become. Social isolation can put seniors at risk, and there’s even research showing how the part of their brain that can detect lies may wear out over time.3

 

Scammers are also attracted by the sheer size of this large and growing target: By 2030, one in every five Americans is expected to be over 65.4 What’s more, fraudsters think they’re likely to get away with such crimes because financial scams often go unreported or can be difficult to prosecute.5

 

So the list of senior scams keeps getting longer: quack medical cures, bogus sweepstakes, Medicare imposters, and romance scams. And now, as seniors go online more often, they see more fake IT staff, sham websites, and “phishing” emails used to steal credit card information. To make it worse, groups of criminals use increasingly sophisticated techniques known as social engineering to produce very convincing hoaxes. 

 

Identifying Senior Scams by Type

Seniors tend to fall prey to different types of scams than younger adults. The FTC report found that adults 60 and older are nearly six times more likely to report losing money in tech support scams than younger adults, for instance, and “three times more likely to report losses due to prize, sweepstakes, and lottery scams.” Lists of senior scams are readily available online from the government and nonprofit organizations dedicated to aging. Here are some of the scams to look out for:

  • COVID-19 hoaxes. The Institute on Aging (IOA) has issued an alert about a surge in scams related to COVID-19, including fraudulent requests for down payments to get a vaccine, bogus pandemic-themed websites looking to collect your credit card information, and robocalls selling “cures” that are never delivered.6
  • Tech support scams. Fraudsters can send pop-up messages warning about non-existent computer problems such as viruses, according to the FBI.7 Pretending to be “tech support,” they ask for remote access to your computer, then charge money for unnecessary services.
  • Social Security Administration imposters. These fraudsters might contact someone by phone, say that their Social Security number has been suspended, and then try to exploit their anxiety to get them to “confirm” the number or provide bank account details. They often use spoofing, which makes their incoming call look official on caller ID. Internal Revenue Service imposters also try to dupe older adults.
  • You’ve won! Telemarketer scammers steal by announcing that someone has won a non-existent lottery or car or vacation – all they need to do is pay for shipping, insurance, or taxes.
  • Romance shakedown. Scams like this come about on otherwise legitimate dating sites, with fraudsters creating fake profiles, building relationships, and then making off with their victim’s money.

Keep in mind that there are other types of financial traps that older adults may fall into, but that are not covered by this article, such as “elder financial abuse.” That’s when a relative or someone else entrusted to manage an elderly person’s finances takes advantage of them.

 

Protecting Against Senior Scams

Older adults need to be on the alert for senior scams, with adult family members and caretakers pitching in as needed. As a baseline, they should remember that government organizations don’t typically come to people’s homes, contact them by phone, or send unsolicited emails that threaten or ask for personal information, says the IOA. It’s worth looking online to learn the many tips and habits that can help, such as pausing to look up a legitimate website or phone number before you even think about clicking a link or taking a call. A recent Wall Street Journal8 article included these tips:

  • Call blocking. Put your phone number on the National Do Not Call Registry9 and use your phone service’s features to block robocallers from calling you back. While these steps can help, they’re far from foolproof, especially given fraudsters’ ability to keep changing phone lines.
  • Spam blocking. Mark junk email as spam, so your spam filter blocks it the next time. Also, look before you click on any link in the email. Some “phishers” will send emails with what look like legitimate addresses, at first glance, but that might have two letters transposed or otherwise reveal themselves as counterfeit on close inspection.
  • Banking tools. You can set up bank alerts on suspicious activity and request a lower credit card limit if you’re not regularly using it all. These steps can help reduce the risk of loss.

Also key to protecting seniors against scams is to report them. A good place to start is the website of the Elder Justice Initiative, which was established in 2018 by the FBI and the Justice Department to combat elder abuse and fraud. 

 

Gift Cards Top List of Senior Scam Payment Types

Understanding the leading ways scammers seek payments from older adults – and going on “high alert” when such methods are solicited – may help some seniors avoid scams.

 

Gift cards top the list of payment methods reported by older adults who fell victim to scams, according to the FTC’s Protecting Older Consumers report. But they’re only slightly ahead of credit cards. The FTC research lists the following payment types and the percentage of senior scam victims who reported paying via each method:

  1. Gift/reload cards: 28.4%.
  2. Credit cards: 27.7%.
  3. Bank account debit: 13.8%.
  4. Wire transfer: 10.3%.
  5. Cash or cash advance: 6.2%.
  6. Check: 5.8%.
  7. Internet/mobile: 5.6%.

 

A good way to avoid falling victim to scammers seeking payment by gift card is to remember that legitimate transactions shouldn’t ever require payment by gift card. Also, it’s not a good idea to share card numbers or PINs over the phone – whether for gift cards or credit cards – unless you know well and trust the person on the phone. For more, read “How to Prevent Credit Card Fraud.”

 

Understanding Senior Scams by the Numbers

Exactly how often older adults are swindled – and for how much – isn’t really known, since monitoring senior scams usually relies on self-reporting. A New York study suggested that the actual number of cases could be anywhere from 10 to 44 times the number reported.10 

 

Still, clear patterns and trends emerge in regular reports from agencies like the FBI and FTC. In particular, the FTC report findings show:

  • Age. Older adults are not necessarily defrauded more often than younger Americans, but they tend to lose more money when it happens. People over 80 are the most vulnerable, with a typical reported loss of $1,600.
  • Highest number of reports. Online shopping fraud became the most frequently reported elder scam in 2019, but with a typical loss of only about $129 per scam.
  • Biggest dollar reports. Romance scams rake in more money from older adults than other scams, with typical losses of $18,000.
  • Online scams. Even though the number of scams via email and online sites including social media surpassed phone scams in the second half of 2019, the dollar amounts were smaller, as indicated by the typical online shopping loss of $129.
  • Phone scams. Older adults pay out more money to phone scammers than online scammers, typically ranging from $1,100 at age 60-69 up to $3,500 at age 80 or over.
  • Payments. While gift cards and other prepaid cards are used most often in scams, with credit cards coming in a close second, the biggest payouts are usually done via wire transfer. The typical reported loss involving wire transfers was $6,000.
  • Personal toll. Numbers cannot express the full toll of these scams, the FTC says. “Some have sent much of their savings in the hope that the prize winnings would be their legacy to their children and grandchildren. All of the older adults are deeply affected by having been lied to and having believed those lies long enough to give away a great deal of money.”

 

The Takeaway

Spamming and scamming of older adults is on the rise. And as they increasingly communicate online and in social media, scammers are targeting them in new ways. It’s important to keep up with the latest frauds and develop good reflexes to protect against elder scams. Researching on government and nonprofit sites is a great place to start. To see how American Express helps, read “How Amex Protects You Against Credit Card Fraud.” 

Karen Lynch

Karen Lynch is a journalist who has covered global business, technology, finance, and related public policy issues for more than 30 years. 

 

All Credit Intel content is written by freelance authors and commissioned and paid for by American Express. 

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