Even in normal times, elderly Americans are vulnerable to con artists. But the COVID-19 pandemic — which has disrupted most seniors' regular activities and cut many off from face-to-face contact with family — has raised the threat. What type of scams do fraudsters use to target this population and how can you help protect your elderly family members, friends and neighbors?
Having worked for many years to accumulate what they need to retire, senior citizens represent an enticing jackpot for fraudsters. They often have ample retirement funds and other savings, Social Security benefits, equity in their homes, and good credit — all of which are attractive to thieves.
In addition to the assets they control, some elderly may not have the mental acuity they once enjoyed and may not realize they're being scammed until they've lost control of their money. What's more, they may not be as experienced in using technology as younger generations. This makes them particularly vulnerable to phishing schemes, malware attacks and other cybercrimes.
Many elderly fraud victims are embarrassed to report losses to law enforcement or their family. And as a recent survey by the American Institute of CPAs found, senior fraud victims are more likely to experience a substantial emotional impact (68% of respondents) than a substantial financial impact (32%). Needless to say, criminals like victims who are reluctant to report, or even discuss, a crime.
Almost any fraud scheme that victimizes the general population affects the elderly. For example, charity schemes trick people into donating to what they believe is a legitimate nonprofit. Fraudsters pretending to be government agency employees, most often IRS or FBI representatives, may threaten anyone who answers the phone with prosecution or imprisonment if they fail to wire money to the thieves.
Certain other schemes, however, are tailored to trick older Americans — for example, the "grandchild scam." In this particular fraud, a thief calls, posing as one of the elderly person's grandchildren. A so-called grandchild may say he or she has been kidnapped and needs someone to pay ransom. To ensure the grandparent doesn't call the police or family members, the "kidnapper" may get on the phone and threaten to kill the grandchild if money isn't turned over quickly
Other fraud schemes that are crafted to steal from seniors include:
Technical support scams. To gain access to a person's computer, a criminal pretends to be a technology support professional. These fraudsters trick seniors into providing remote access to their device then steal bank login credentials and personally identifiable information that enables them to steal the victim's identity.
Home maintenance frauds. A criminal may convince seniors to make "urgent" home repairs, such as to fix faulty gutters or replace missing roof shingles. They urge the victim to pay upfront and as soon as they receive payment — usually with a check or cash — the thieves disappear.
Romance schemes. Fraudsters know that many elderly people live alone and seek companionship. Using social media and dating sites, criminals pose as potential romantic partners. As the relationship develops, a criminal convinces a victim to send money or buy gifts, generally starting small and then asking for larger amounts as time goes on.
Stopping scammers from stealing from the elderly takes a multi-pronged approach. You can help by staying connected with the elderly people in your life. Should criminals target them, they'll be more likely to share the experience with someone they trust, and who they feel won't judge them for "falling" for a scam.
Also help educate them and any caregivers about fraud. Let elders know that unsolicited communications should be treated with caution. Even if it seems rude, it's ok to hang up the phone, delete an email or stop responding to messages if someone makes them uncomfortable. Stress that they should never provide financial or personal information over the phone to a stranger or click on a link contained in an unsolicited email.
Further protect loved ones by installing up-to-date security software on their computers. To ensure ongoing safety, set up automatic updates and software subscription renewals. To prevent fraudulent phone calls, make sure elders have call screening that can help them identify and block telemarketing calls. And instruct them to ignore unsolicited text messages.
A critical step to protecting elderly family members' financial assets, particularly if a parent or grandparent suffers from cognitive impairment or is unusually trusting of strangers, is to arrange to have their power of attorney. Also ask their bank and other financial institutions to notify you of any significant transactions.
Over the past year, many elderly people have become isolated from family, friends and others who might normally look out for them. If you haven't done so recently, talk to the seniors in your life about fraud and ask if they've experienced any threats, If so, take immediate action to protect your loved ones. This may include involving the police and, if a fraud is extensive, engaging the help of a forensic accountant to review financial data and track stolen funds.
Get in touch today and find out how we can help you meet your objectives.