Elder Fraud Abuse & Scams 101 — Spot Elderly Financial Abuse

According to one FBI report, nearly 100,000 older adults in the United States were victims of fraud in 2021, with total fraud losses reaching $1,685,017,829 (yes, that's over $1 billion). That means that the average loss for each senior was tens of thousands of dollars. If someone you love is aging, take the time to teach yourself (and your loved one) about the warning signs of common elder fraud scams.

Elder financial abuse or elder fraud is a financial crime where the victim is an older adult. In these crimes, the older adult is either the victim of fraud/impersonation and theft or someone otherwise financially exploits the senior, such as withholding assistance until receiving money.

Senior citizens are attractive targets of financial crimes for several reasons, including:

1. Many scammers believe that most older adults have large retirement nest eggs.
2. Elderly persons are at greater risk of making poor financial decisions as a result of aging-related cognitive decline, especially if they have a condition like dementia.
3. Many scammers perceive older adults to have poor online literacy skills, meaning digital fraudsters may target them more than other age groups.

Sweepstakes and lottery scams are one of the oldest tricks in the fraudster's book. The premise is simple: the con artist poses as a representative of a lottery or sweepstakes program and promises the potential victim that they have won or are in the running to win a prize. In order to participate/collect the winnings, however, the victim has to hand over sensitive information, which may include:

• Debit card/credit card numbers
• Social security numbers
• Bank account numbers
• Contact information like phone number, email, and home address

This information can lead to fraudsters withdrawing money from the victim's financial accounts or even escalate to full-blown identity theft.

Sometimes the fraudsters are close family members or caregivers of the older person. In these cases, the families/caregivers will take advantage of the older adult's declining decision-making abilities to gain access to their bank accounts to illegally withdraw money or to illegally collect government checks from agencies like Medicare, Medicaid, or Social Security.

These types of scams are unfortunately on the rise and prey on older adults prone to loneliness who seek companionship online. In this type of scam, bad actors pretend to be romantically interested in the victim in order to gain trust. Then, once trust is gained, the fraudster asks for financial assistance, either by sending them money directly or in the form of gift cards.

Fraudsters may impersonate a person or institution of authority to intimidate the victim into giving away personal information or money. Individuals or entities that bad actors may impersonate include:

• Law enforcement agencies, where the fraudster may tell the victim there is a warrant out for their arrest due to an (imaginary) unpaid fine; paying this "fine," according to the fraudster, will mean the victim avoids arrest.
• Financial institutions like the victim's bank, where the fraudster claims that the victim needs to verify information like routing and account numbers.
• Government agencies like the IRS, where the fraudster claims that the victim made mistakes on last year's taxes and, as such, owes the government money.
• Relatives like a grandchild, where the fraudster claims to be a loved one of the victim and in need of immediate assistance. The rise of AI (artificial intelligence) means that some fraudsters can even use the loved one's real voice to craft a convincing fraudulent message. In order to combat potential AI-generated fraudulent messages, experts recommend having a family safe word that you can say in emergencies to know that the other person is real.

Elder financial exploitation and financial fraud are serious crimes. One of the most important actions you can take is to report fraud to the appropriate authorities, which can include the following:

• FBI - Tip Submission Portal and Internet Crime Complaint Center
• Federal Trade Commission (FTC) - Fraud Reporting Portal
• Local police non-emergency lines
• National Elder Fraud Hotline (833–FRAUD–11 or 833–372–8311)
• Adult Protective Services (APS)

It's also important to monitor your loved one's finances to see if there is any suspicious activity that raises red flags, such as unusual withdrawals of money. In order to monitor this activity, however, you may need to first establish power of attorney.

If you don't have power of attorney, simply talking with your relative about finances may also help you uncover any instances of suspicious activity. Say, for example, your relative falls for a romance scam and mentions a new partner they have only met online and are sending money to. In this instance, you can be frank with your relative about the potential for fraud and save them from losing any more money.

You can also go one step further and add your loved one's phone number to the National Do Not Call Registry. While this action won't completely eliminate fraudulent calls, it can reduce the number of scam phone calls your loved one is exposed to.

Robocalls are becoming more and more common. You can protect your older relative by helping them install call-blocking tools on their phone to stop these unwanted calls in their tracks.

There may come a time when your aging relative simply cannot take care of finances or other important tasks like getting dressed and preparing meals safely. In this case, your entire family should discuss the right senior living options for your loved one, which may include moving your aging relative into a senior living community.

Not sure if it's the right time to make the move? Contact St. Andrew's today to learn more about how we can accommodate you or your relative's specific needs and financial situation.