As financial fraud and scams continue to escalate, safeguarding older adults against financial exploitation is paramount. Newly released data from the Federal Trade Commission (FTC) reveals a staggering $10 billion dollars of reported fraud-related losses in 2023 alone. An alarming report from AARP projects that the losses are far higher, with adults over the age of 60 losing more than $28 billion each year from fraud.
MORE NEWS: Ranking Arizona: Top 10 hospitals for 2024
In a Wells Fargo study on senior isolation and loneliness, 97% of people aged 60 and older acknowledged the susceptibility of their demographic to financial scams. In fact, nearly half (47%) already knew someone who had fallen victim. Despite this awareness, most (69%) believe that while other seniors are susceptible, they themselves are not.
Fraudsters recognize the potential for lucrative gains and actively target older adults. One of the primary reasons for this is because older adults typically have access to larger sums of money, such as a retirement account, pension, or a home that is paid off. Coupled with ample free time, a desire to maintain connection and friendship, and sometimes limited online safety acumen, seniors become prime targets for various scams. Imposter scams, in particular, have emerged as a prevalent tactic, with perpetrators posing as trusted figures, including financial institution representatives.
Here are three common scams targeting older adults:
Gift Cards and Refund Scams: Scammers impersonate reputable companies or institutions, coercing victims into purchasing gift cards for alleged debts or refunds. Never provide gift card information as payment.
• A variation of this can be combined with the “grandparents’ scam”, in which an urgent call comes in from a “grandchild” or loved one in distress requesting money via gift card (or through another source) to help get their loved one out of the situation. In reality, it’s a con artist on the other end of the line.
Romance Scams: Fraudsters exploit emotions through online dating platforms, feigning affection before soliciting money for fictitious emergencies or investments and then vanishing. Be cautious of sudden requests for financial assistance.
• Whether it’s faking tragedy or the promise of money gains through investment and business opportunities, the victim is typically “love bombed” and after trust is gained, there is pressure to act or send funds immediately.
Crypto andInvestment Scams: With the rise of cryptocurrency, scammers take their time to manipulate victims into fraudulent investments, often promising substantial returns before vanishing with the funds. Always verify the legitimacy of investment opportunities and consult registered brokers.
• The Federal Trade Commission states that this type of scam was the form of fraud with the highest reported losses at $4.6 billion dollars in 2023! It’s a gut-wrenching scam anticipated to grow as digital currency continues to become more mainstream.
To combat these threats, it’s important to employ preventative measures:
• Authenticate communications: Verify any unexpected requests and avoid clicking on any links. Take pause before taking action.
• Don’t trust caller ID: Scammers can “spoof” legitimate numbers by altering caller ID.
• Guard your personal information: Don’t share sensitive data such as passwords, PIN numbers, or one-time passcodes with unknown individuals.
• Remain skeptical: Don’t send money in any form to anyone you don’t know personally or to “help” someone you’ve only met online.
• Stay connected: Maintain open communication with trusted networks, seek advice and say something if you’re ever solicited for any money.
Caretakers and loved ones also play a pivotal role in safeguard older adults from financial exploitation. Here are some tips to help protect your loved ones:
• Initiate Conversations: Proactively discuss financial matters, current scams and fraud and mitigation methods.
• Monitor accounts frequently: Review all statements.Watch for irregular activity and consider having your loved one set up account alerts so that both of you can monitor account activity. Ensure there is a beneficiary and/or co-signer listed on all the accounts.
• Observe behavioral changes: Watch for sign of financial exploitation, including sudden withdrawal or isolation, increased secrecy, a new romantic relationship, or changes to legal or financial documents.
Stay informed, stay vigilant, stay aware – that is the best safeguard against financial exploitation.
For more information, resources, and tips on spotting and avoiding scams, visit the Wells Fargo Security Center.
Author: Rodnee Warr is executive director, Elder Clients Initiatives, for Wells Fargo Advisors.
