Financial elder fraud is estimated to cost seniors at least $36.5 billion each year. To help older adults avoid getting scammed, Attorney Lyle Solomon explains how 8 common financial scams targeting seniors work.
Seniors are top targets for scams and financial abuse
When someone unfairly or criminally exploits a vulnerable senior’s money or other assets, it is called financial elder abuse.
Scammers typically prey on older adults who they believe to be vulnerable.
This includes people who are lonely, isolated, physically or cognitively impaired, who are grieving a recent loss, and those unsure of how to manage their money.
Con artists often pretend to be trustworthy and reliable helpers who can provide needed assistance and support.
They might be strangers, like telemarketers or tradespeople. Or, they could be someone with a connection to the victim, including friends, relatives, medical professionals, legal counsel, accountants, and paid or unpaid caregivers.
To help older adults protect their hard-earned assets, find out about 8 top financial scams targeting seniors that everyone should be aware of.
Advertisement
7 common financial scams targeting seniors
1. Grandparent scam In these scams, a con artist contacts the older adult and claims to be their grandchild.
The grandchild will ask for money to help with an unforeseen financial issue, like not having enough money for rent, medical expenses, or auto repairs.
The con artist will also beg the grandparent not to notify the victim’s parents (so the scam won’t be discovered).
2. Text message scam Scammers send their victims misleading texts to obtain financial information.
For instance, the con artist may say that a prize will be given to the first 100 recipients of the message. Then, the fraudster uses any personal information they collect to conduct fraud or steal the older adult’s identity.
3. Telemarketing fraud 1 in 6 American consumers are defrauded by dishonest telemarketers, according to estimates from the U.S. Department of Justice. And according to AARP, roughly 80% of them are over the age of 50.
Scammers commit identity theft, credit card frauds, investment scams, and other financial crimes over the phone.
Another instance of this type of fraud against older adults involves con artists selling products over the phone that either never arrive or turn out to be useless junk.
4. Debt relief scam A fraudster calls an older adult and says that they have $10,000 in credit card debt.
Then, the fraudster warns that failure to pay off the debt may lead to imprisonment and offers immediate debt solutions in exchange for $5000, paid over the phone.
A panicked older adult then shares their bank account details to pay for the fake service. Once the scammer gets the bank account details, they disconnect the call.
5. Social Security fraud Scammers call older adults and tell them their Social Security Number has been suspended due to unusual activity and they must confirm it immediately or risk losing it.
Skilled con artists may even be able to modify the phone number that appears on the older adult’s caller ID display so that it looks like the call is legitimately coming from the Social Security Administration.
6. Lottery, puzzle, and sweepstakes scams Some older adults are conned into thinking that they’ll “win big.” The problem? Swindlers deceive their victims into believing that they must first pay to succeed.
For victims to receive their share of the winnings, these scams demand that they first pay sweepstakes fees. In addition, scammers say that a fee is required to enter a weekly lottery drawing – and of course there isn’t actually any lottery.
A popular type of puzzle scam is to have the person solve a simple puzzle to enter to win a huge sum of money. Multiple entries are required to complete the “process,” starting with small sums. But these “entry fees” rise as the older adult advances to next levels – until they’ve spent hundreds or thousands of dollars.
Another type of puzzle scam, where free sudoku and other puzzle games are promised, causes malware to be installed on the older adult’s computer. The malware collects sensitive financial and personal information and transmits it to the scammer.
7. Government imposter scams In this scam targeting seniors, scammers get in touch with victims by posing as employees of a reputable government organization like Medicare, the IRS, or the Social Security Administration.
Fraudsters use technology to make their phone numbers appear to be coming from these legitimate organizations.
Once on the phone with them, the scammers try to gain your trust and “prove” that they’re from a government agency by using stolen details like your Social Security Number.
A few examples: FBI or law enforcement scams: Con artists contact the older adult and say they have a warrant out for their arrest. The older adult risks going to jail if they refuse to disclose their financial details or pay a fine.
IRS scams: Scammers call older adults during tax season and pretend to be from the IRS. They say there’s a problem with their tax return. To “protect” their tax file, the fake IRS agent needs to gather information. In reality, the scammer will use that information to steal the older adult’s identity and file false tax refunds.
Medicare scams: Con artists call their victims pretending to be from Medicare and need to “check” their Medicare number. After getting their Medicare number, the scammer uses it to take their health benefits – medical identity theft. Alternatively, they may ask for the older adult’s credit card information because they must pay a fee to receive a new Medicare card or some kind of preferential treatment.
8. Computer tech support scams Tech support fraudsters use false phone calls, emails, texts, pop-up windows, and emails to lure their victims.
They’ll inform older adults that their computer has a security hole or other serious issue and offer to assist them in fixing it.
Then, they’ll either ask the older adult to transfer their data and money or allow the scammer remote access to their computers and all the sensitive information stored in the files.
What to do when older adults are victims of financial abuse
If your older adult has been the victim of fraud, call the National Elder Fraud Hotline at 833-272-8311 or 833-FRAUD-11 to get assistance.
Recommended for you:
Guest contributor: Lyle Solomon has extensive legal experience as well as in-depth knowledge and experience in consumer finance and writing. He has been a member of the California State Bar since 2003. He graduated from the University of the Pacific’s McGeorge School of Law in Sacramento, California, in 1998, and currently works for the Oak View Law Group in California as a Principal Attorney.
This article wasn’t sponsored and doesn’t contain affiliate links. For more information, see How We Make Money.
Comments