The Baby Boom generation – those Americans born between 1946-1964 – constitutes 29 percent of the population, with ages ranging from 55-73.
Given the significance of the Boomer population, the Federal Reserve Bank of Atlanta has focused much attention on the increases in elder financial abuse. Not surprisingly, such increases are fueled by the sad reality that many within the senior population are susceptible to the proliferation and sophistication of exploitation attack channels, thanks to the internet. None of this is likely to slow down so education is critical.
Let’s review some of the more common financial scams targeting the elderly, based on information from the Fed:
- Charity: The victim receives a request, usually over the telephone or in a public place, for donations for natural disaster relief or other good causes, but the funds are not used for such purposes.
- Sweepstakes/lottery: The victim receives a letter, email, or telephone call with the news that they have won a lottery or cash sweepstakes—but they have to pay a tax or administrative fee in advance before collecting their prize. According to the FCC, sweepstakes scams increased 45.8% between 2013 and 2017,
- Home repairs: Someone tells the victim that some aspect of their property needs repair—for example, the driveway, roof or gutters—and it can be done inexpensively since there is a “crew already in the area.” The victim must pay by cash or check in advance, but the crew never appears to do the work.
- Romance: The fraudster, often posing under a false identity, makes romantic overtures and eventually asks the victim to send money so he or she can travel to meet them.
- Tax: The victim receives a phone call from the fraudster claiming to be an IRS agent pursuing back taxes. Unless the victim sends funds immediately, they will be subject to arrest. A variant of this scam involves the perpetrator posing as a police officer pursuing unpaid traffic tickets or other infractions. The IRS estimates that more than 2.4 million Americans are victims of IRS scams every year, a high percentage of whom are seniors.
- Virus: A “technical support” company calls the victim, claiming that a virus has infected the victim’s computer. For the payment of a “modest fee,” the company can download software that will kill the virus and protect the computer against future attacks. Often, the software downloaded actually contains some form of malware that may allow the criminal to compromise the banking credentials of the victim.
- Other advance fee fraud: The fraudster requests money to help a relative in jail or stranded on the roadside. The situations are completely false but might contain some element of truth as the scammer may have found information on social media providing a name or that the named individual is out of town.
- Identity theft: The criminal communicates with the victim through social media, telephone, or email to obtain bank account or other information allowing them to attempt a wide variety of fraudulent activities including credit applications, unauthorized account transactions, and more.
- Investments: The victim is convinced to purchase an annuity or some other investment with a supposed lucrative payback. According to the Senate Committee on Aging, financial and investment scams cost adults over the age of 65 nearly $3 billion every year.
Most elderly financial abuse is committed by family or other people who are trusted with care of the elderly, which makes the crime more difficult to detect. Such abuses range from the transfer of property or securities to the theft of liquid assets through check writing or ATM withdrawals.
However, several companies are designing fintech products to alert trustees of suspicious activity. Plus, the American Association of Retired Persons (AARP) recently launched a pilot program for financial institutions called BankSafe. BankSafe is a free online training program with educational materials to help protect seniors in four primary way:
- Preventing financial exploitation
- Empower family caregivers
- Helping those with dementia
- Making banking tools and environment easier to access
Learn more about BankSafe.