By Karen Lynch | American Express Credit Intel Freelance Contributor
7 Min Read | August 4, 2021 in Money
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
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.
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:
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.
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:
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.
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:
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.”
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:
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.”
1 “Protecting Older Consumers,” Federal Trade Commission
2 Internet Crime Report 2020, FBI
3 “Financial Exploitation Is Associated with Structural and Functional Brain Differences in Healthy Older Adults,” The Journals of Gerontology
4 “Demographic Turning Points for the United States: Population Projections for 2020 to 2060,” U.S. Census Bureau
5 “Top 10 Financial Scams Targeting Seniors,” National Council on Aging
6 “COVID-19 Related Elder Abuse Scams,” Institute on Aging
7 “Senior Scam Alert,” U.S. Department of Justice
8 “How to Protect Seniors from Online Fraud and Phone Scams,” Wall Street Journal
9 “National Do Not Call Registry,” Federal Trade Commission
10 “The New York State Cost of Financial Exploitation Study,” New York Office of Children and Family Services