Fraudsters target senior citizens with multiple financial scams
In recent years, senior citizens — defined as any individual 60 years old or older — have become a favorite target of cybercriminals and other fraudsters. Senior citizens are increasingly attacked with schemes because scammers perceive them as less tech savvy and more financially stable, making them perfect targets for various financial and identity theft schemes.
In its most recent report, the U.S. Senate Special Committee on Aging reported a total of 8,402 complaints to its fraud hotline from residents across the country from January 1, 2015, through December 31, 2020. The top five scams accounted for more than 65% of the complaints made to the hotline:
- Government impersonation scams: 3,383 complaints
- Sweepstakes scams: 639
- Illegal robocalls and unsolicited phone calls: 636
- Computer scams: 445
- Grandparent scams: 368
The Federal Trade Commission (FTC) estimated that seniors lost more than $931 million in 2021 to the top ten financial scams, including $213 million to so-called “romance” scams. Although romance scams top the FTC list, they could be underreported to the Senate committee’s hotline by seniors who were embarrassed by having fallen for them.
Different types of fraud
It’s essential to understand the nature of these financial schemes to minimize the risks of fraud.
Government imposter scams
According to the FTC, government imposter scams cost seniors about $122 million in 2021, an increase of more than 100% from 2020. In these schemes, criminals contact seniors by phone, email, or text, pretending to be from the Internal Revenue Service (IRS), Social Security Administration (SSA), or Medicare.
These scammers tell seniors they owe back taxes and that they must pay them immediately or face arrest or asset seizure. Someone claiming to be from the SSA might say the senior’s Social Security benefits will be cut off without immediate payment. A scammer claiming to be from Medicare might demand someone’s Medicare number for medical equipment that the senior never ordered, so the scammer can use that number to bill Medicare for services and equipment that is never delivered. Recent law enforcement raids against illegal cyber-marketplaces have found large caches of Medicare numbers and other personal information that scammers had stolen from seniors.
Some scammers are clever enough to “spoof” a phone number — using a false caller ID — or draft an email with realistic government logos so the call or email looks like it is coming from a legitimate government agency. These scammers also create a false sense of urgency to get their victims to act immediately and avoid talking with anyone who might detect the scam.
Seniors can avoid these schemes by following these guidelines from the FTC:
- Don't send cash, gift cards, or cryptocurrency to pay someone who claims they are with the government.
- Don't give financial or other personal information to someone who calls, texts, or emails claiming to be from the government.
- Don't trust your caller ID.
- Don't click on links in unexpected emails or text messages.
Be aware that no government agency will contact a senior citizen or anyone else by phone, email, or text to demand payments or personal information. This alone is an important safeguard to avoid becoming the victim of a government impersonator scam.
Sweepstakes or lottery scammers contact seniors by phone or mail to say that the senior has won the sweepstakes or lottery. Sometimes the prize is cash; sometimes, it is something else of value, such as a new car. The scammer might even impersonate a well-known sweepstakes contest, such as the Publishers Clearing House, or claim to be a lottery official.
The scammer will tell the senior that in order to claim the prize, the senior has to “wire a few hundred to a few thousand dollars to cover processing fees and taxes.” The scammer will ask for this payment to be sent via gift cards, electronic wire transfers, money orders, or cash. Using these payment methods makes the transactions nearly untraceable.
The scammer may often suggest that the senior keep the prize a secret from their family so that it can be a surprise. This keeps the senior from discussing the scheme with others who might intervene to prevent the scam.
Seniors lost $108 million to these sweepstakes, lottery, and prize schemes in 2021, with $47 million of that amount taken from adults 80 and older.
Illegal robocalls and phone scams
Many schemes rely on high-volume illegal robocalls that often originate overseas but spoof phone numbers with local area codes. These calls can be used to “distribute prerecorded messages or to connect the person who answers the call to a live caller.” The number of spam calls — including illegal fraud calls and legal nuisance calls — was "14 per user per month," according to the Hiya “2023 State of the Call report.” These robocalls are a low-cost way for scammers to identify potential victims for other schemes, and people who were scammed through spam calls lost an average of $431 in 2022.
Robocall scams may do nothing more than target seniors to social engineer them into answering “yes” to a simple question such as, “Can you hear me?” When the senior answers, their response is recorded, and that yes reply can be edited to sound as if the senior approved a major purchase. According to the FTC, scams relying on phone calls resulted in $280 million in losses to people 60 and older in 2021.
Computer tech support scams
Tech support scams can take different forms. They could be a message from someone claiming to be a computer technician with information about a virus or other malware infecting the senior's computer. Or, sometimes, a senior will call a tech support number they find by searching online that has been planted to fool people into calling. In other cases, a pop-up may appear on the senior’s computer screen with a contact number for help. In any of these scenarios, the tech support person may claim to be from a well-known company, such as Microsoft or Apple, and request “remote access” to the senior's computer to fix the issue.
Once the scammers have access, the senior may be locked out of their computer until they pay a fee to the scammer. Alternatively, the scammer may use that computer access to steal financial account information, including passwords, stored on the computer. These tech support scams resulted in $73 million in losses to seniors in 2021, nearly double the cost in 2020.
Grandparent scams occur when someone calls a senior claiming to be the senior’s grandchild or a law enforcement officer who has detained the grandchild. The scammer says the grandchild is “in trouble and needs money to help with an emergency, such as getting out of jail, paying a hospital bill, or leaving a foreign country.”
The scammer will play on the senior’s emotions in an attempt to get them to wire money to the caller. The fraudster will create a sense of urgency and pressure the senior to send money “in the fastest way possible.” If the senior does send money, the scammer will call back to ask for additional money for fees.
Some scammers will use two people to further the scheme — one to impersonate the grandchild and one to impersonate a law enforcement official — to increase the credibility of the story. The phone handoff between the two people also reduces the risk that the senior will realize the person is not their grandchild.
To reduce the risk of falling for this scheme, the Senate Special Committee on Aging recommends that seniors:
- Resist the urge to act immediately
- Ask the person questions only the relative would know to verify their identity
- Call a phone number the senior knows belongs to their family member
- Check out the story with other members of the family, even if asked to keep it a secret
While not among the top five scams, romance scams that target seniors are increasing, resulting in $213 million in financial losses among seniors in 2021, nearly 50% higher than in 2020, according to the FTC.
Romance scams happen when a senior meets someone online who lavishes them with attention and then asks for money. The scammer might claim to need the money for a medical emergency or to travel to visit the senior. They often ask for the money by wire transfer or gift card, but once the money is sent, they disappear and take it with them. Romance scammers often use dating apps or social media to identify their victims.
Some romance scammers target victims to use them as “money mules.” The scammers convince victims to receive the “illegal proceeds of crime” and then forward that money to the fraudsters, which could result in criminal charges against the unwitting victims of these schemes.
To avoid becoming the victim of a romance scam, seniors should:
- Never send money or gifts to someone they haven’t met in person
- Take it slowly and take steps to verify the identity of the person
- Talk to someone they trust about their new love interest
- Cut off contact right away if they suspect a romance scam
The costs of fraud against seniors has significantly increased across all of the top forms of fraud. Awareness of the schemes that scammers use to target older individuals can help reduce the risk that senior citizens will become victims of these crimes in the future.
- “Fighting Fraud”, U.S. Senate Special Committee on Aging; p. 14.
- “Protecting Older Consumers, 2021–2022”; FTC; p. 33.
- “Fighting Fraud”, p. 16.
- “Protecting Older Consumers, 2021–2022”; FTC; p. 37.
- “Protecting Older Consumers”; FTC.
- “Fighting Fraud”, U.S. Senate Special Committee on Aging; p. 20.
- “Protecting Older Consumers, 2021–2022”; FTC; p. 37.
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