Americans age 50 and up hold 83% of the country’s wealth. Scammers know this. Financial scams targeting this group are on the rise, stripping victims of more than $36 billion per year. Investor Protection Trust reports that one in five people age 65 and older has already been affected. Threats range from “imposter” scams, in which fraudsters pretend to be trusted contacts or acquaintances, to phony business opportunities, false IRS tax delinquency and malicious “tech support” messages.
Why Older Adults are at Risk
Biological, social and legal factors conspire to make seniors vulnerable to financial fraud, according to Marketplace.org. Additionally, neurological research has suggested that even aging adults who are otherwise healthy and independent have less capacity than younger people to distinguish between trustworthy and dishonest individuals.
Social isolation can also contribute to increased vulnerability. Case studies by Adult Protective Services show that without the more consistent company of trusted family and friends, older adults can be more easily emotionally manipulated, feeling a “genuine” connection to scammers.
Finally, banks don’t designate emergency contacts, as airlines do, to notify when fraud is suspected in a senior patron’s account. By the time targets get help, it may be too late. Unfortunately, most money lost to scams is never recovered.
Common Scams (and What to Do About Them)
The most reported -- and most costly -- form of financial fraud is imposter scams. Impersonators masquerade as distant family members, romantic interests, service providers or government representatives in their efforts to extort their targets, soliciting money or personal financial information. In 2018, more than 37,000 people lost a total of $34 million to imposter scams.
With more adults adopting increasingly complex technology, deceivers routinely pose as “tech support” professionals, calling victims to fix fictitious computer issues. These scammers convince people to give them remote access, or control, of a personal computer via the Internet, subsequently scanning the device for saved passwords, credit card numbers and bank account information. Some go as far as to install malware, or malicious software, to continuously collect and transfer this sensitive information.
Avoiding the 'Tech Support' Trickster
- No legitimate tech support professional will reach out to you unless you’ve already identified an issue with your computer or tablet and reported it. If they do, just hang up!
- Avoid clicking any links in notices or pop-ups on your screen that warn you of a computer problem.
- Don’t always trust your caller ID. It can easily be manipulated by a motivated scammer.
- Never give your passwords or control of your computer to anyone. Most support teams will be able to help fix a device without ever having to obtain your usernames, passwords or device IDs.
- Keep your security software up to date. (Source: Federal Trade Commission)
Another protective measure is to employ the use of a password manager to scramble scammers’ access to any credentials stored on your computer. Password managers create and save unique passwords in one place, accessed with a singular, strong master password. Be sure not to store the master on your device.
Sweepstakes, Lottery & Prize Scams
These types of shakedowns prey on the excitement that comes with winning. They indicate that you’ve been selected to collect a prize, often a lump sum of cash or a new car, all you need to do is to simply pay the “processing fee.” When the payout inevitably fails to appear, they demand further payment, then more. They may make contact by email, phone or even fax.
Business & Jobs Scams
These phony work-from-home and pyramid-earning schemes promise high returns for low investment. In 2018, the average victim of this scam type lost more than $6,000. If a company requires any type of payment or financial information from you in exchange for the promise of a job, it is probable the work of a scam artist.
When you or a trusted advisor suspects financial foul play, help protect future victims by doing the following:
- Call 9-1-1 in an emergency or your local police department’s non-emergency line.
- Report fraud to the Federal Trade Commission and Department of Justice .
- Access a local office of the National Adult Protective Services Association .