Senior Scams: What to Know, and How to Protect Yourself

There’s a common assumption online that older people just don’t “get” technology.  Those of us who’ve reached a certain age get pretty tired of the “OK, boomer” memes, and even millennials are now getting roasted by twenty somethings for being behind the times. 

It’s mostly in good fun, but occasionally things take a darker turn.  That’s certainly the case when criminals target older people with senior scams, banking on a combination of their (real or mythical) inexperience with technology and the all-too-real potential for cognitive decline or simply misplaced trust.  Let’s take a look at the most common senior scams, and how to protect yourself (or your loved ones) against them. 

Senior Scams Are a Serious, and Growing, Problem

One is that fraud against seniors is on the rise, from just over 60,000 reports in 2018 to over 88,000 in 2022.  While that’s a sharp increase in just five years, the total number of reports actually peaked at over 100,000 in 2020 and has subsided a bit since then, though the number of reports remains high (and we can say pretty confidently that not all incidents are reported). 

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The more concerning detail is that, while seniors are less likely to be scammed than younger victims, those who are scammed are likely to lose more money.  The record number of incidents in 2020 translated to roughly $1 billion in losses, or an average of $9,175 per victim.  In 2021, those figures rose to $1.7 billion in losses, or an average of $18,246 per victim (a 74% increase).  In 2022, losses skyrocketed to $3.1 billion, despite two years’ decline in the total number of victims, at an average of $35,101 per victim (another 81% increase from 2021’s record high).  Of those victims, 5,456 lost over $100,000. 

Losses like that would be a bitter pill to swallow at any age, but it’s especially so for the elderly, who have limited opportunities to replace their losses. 

The Costliest Senior Scams 

There were seven crimes in the 2022 Elder Fraud Report that each accounted for over $100 million in losses. Of these, two — Business Email Compromise, or BEC, and personal data breaches — aren’t scams in the traditional sense, and therefore fall outside the scope of this article. 

That leaves five scams that account for a disproportionate percentage of total dollar losses, making them the ones we most need to be aware of.  In declining order, they are: 

Investment scams

Investment scams alone accounted for nearly a billion in losses, accounting for over $990 million of 2022’s total.  There are too many kinds of investment scams to cover here in detail, but most follow a fairly consistent pattern. 

The initial approach may come in the form of a phone call, an email or an actual physical letter, and the pitch is usually that there’s an opportunity — almost always involving some kind of time constraint — to make above-average returns through some sort of investment.  Usually it’s presented as being novel in some way: a new sector like electric cars, an emerging market somewhere overseas or more usually cryptocurrency.  Occasionally, in a nod to elder investors’ innate conservatism, the pitch will involve something more familiar like gold and silver. 

The common theme is that investors are offered higher-than normal returns at lower-than-normal risk, which is a combination that essentially doesn’t exist in the real world.  The underlying scam may be a classic Ponzi scheme (using new investors’ money to pay earlier investors, while skimming off most of the money) or a more modern variation on the theme — but in any case, the unwary investor’s money is gone for good. 

Tech support scams

Tech support scams play on seniors’ perceived bafflement with technology, though in fairness, younger people fall for these, as well.  Again, there are lots of variations on the theme but they almost invariably revolve around persuading you that there’s a problem with one or more of your devices or accounts, and that they’re going to help you fix it. 

The initial approach may come in the form of a phone call, a text, an email or even a pop-up in your browser window that contains an alarming message (aka “scareware”).  Often it will warn you that there’s a problem with our computer — from a software issue to a virus — and the friendly tech support people will help you fix it. 

Depending on the scammers’ goals, they’ll either request payment directly for their bogus services or potentially ask you to give them control of your devices or have you download an app.  If you give them a payment you lose your money and potentially hand them your banking information; if you give them control of your device — or install an app loaded with malware — you may give them access to everything you see and do on that device. 

A variation on the tech support scam tells you that there’s an issue with your account at one or another of the big sites — Amazon, perhaps, or Netflix — and that you need to log in to your account to fix it.  If you click the supplied link you’ll be taken to a bogus version of the site, where your login information will be stolen and malware potentially installed on your devices. 

Confidence and romance scams

The term isn’t used as much any more, but confidence scams — the origin of terms like “con man” and “con game” — are one of the classic forms of fraud.  The criminal gains the victim’s confidence, and then uses it to loot their money.

One current confidence scam, for example, has the criminal posing as an officer of your bank or credit card company.  You’ll be told that there’s an employee suspected of embezzlement, and they’re asking for your cooperation in a “sting” operation to catch the culprit.  Your part in the process is simply to transfer some funds into such-and-such an account, to serve as the bait in the trap.  The account, of course, is controlled by the criminals and the money is gone forever.  In a variation on the theme, the scammers may target your banking information and then use that to drain your account. 

Many seniors find themselves living alone after being widowed or divorced.  They’re relatively easy targets for romance scams, of either the conventional variety (originating on dating sites or social media) or the longer-term, big-money “pig-butchering” scams that target affluent seniors.  In some cases the romance may take place in real life, with an opportunistic grifter wooing the senior “live and in person.”  In any case, the scam usually involves either an investment opportunity or a sudden “emergency” that puts the new crush under a stern financial obligation (“I really hate to ask, but could you possibly help …?”). The money will go away, and so — once the well runs dry — will the new love. 

There is an exception to this rule, where the scammer potentially marries the senior or gains their power of attorney, in which case they’re in a position to loot the entire estate.  That walks the fine edge of legality, and can be very difficult for concerned family members to counter. 

Government impersonation scams

This type of scam has been widely publicized, so you’re probably familiar with it.  The victim gets a call (or a letter or an email, but usually a call) claiming to be from the IRS, the SSA or some other government agency.  Usually they take a threatening tone: you owe the IRS money; or your SSN has been connected with criminal activity; or your Social Security benefits are to be cut off for some reason.  The caller bullies the victim into making immediate “restitution” — typically in the form of a wire transfer, gift cards or even cryptocurrency, all of which are difficult to trace or reverse — in order to avoid a criminal trial and possible jail time. 

There are a few variations on the theme, and some even dangle a carrot instead of brandishing a stick.  You might be told that your Social Security benefits are increasing, for example, or that the IRS has discovered that you’ve overpaid and that they’re going to reimburse you.  All they need is for you to “verify” your banking information so they can make the deposit.  Of course, once you’ve given them that information, they’ll use it instead to drain your account. 

Real estate scams

The last of the current Big Five is real estate scams.  Owning property is one of the most reliable ways to accumulate wealth for retirement, but property itself isn’t “liquid” — meaning, you can’t just spend a few feet of your mudroom for groceries.  Seniors may choose to sell their home and downsize, or rent out their home and live somewhere else, for example.  In any case, this creates opportunities for scammers to cash in. 

If you’re downsizing to a smaller home, for example, scammers may send an email — posing as your realtor or banker — making a last-minute change to how your closing costs and deposit should be transferred (which sends the funds to the scammers, of course).  If you’re renting a property, a supposed renter may send you a check for the rent and deposit, and then “reluctantly have to cancel.” 

If you’re looking for a rental to live in (short-term or long-term) because you’re selling your house, you may run into scammers posing as landlords.  Often they’ll create duplicates of legitimate listings, detailed to the point of using an email address that sounds like the real landlord’s (or property manager’s) name.  They’ll ask for whatever state law allows as an initial payment (first and last month, damage deposit, whatever they can get away with) but when you show up to take possession, it turns out to be bogus. 

Other Scams to Be Aware of

While those five scams account for most of the financial damage to seniors, a few others are noteworthy as well. 

The “Grandma” scam

You’ll get a call, often on a bad connection, from someone claiming to be one of your grandkids (“Hey, grandma, guess who this is?” is a common ploy).  They’ll have a story about being in trouble in one way or another, and needing money to pay a fine or catch up on a bill.  But it’s bogus, and the money’s lost. 

Lottery, sweepstakes and inheritance scams

These rely on different stories — you’ve won a sweepstakes or lottery, or a distant relative has died and left you money — but in each case you’ll have to pay some form of “taxes” or “fees” in order to claim your non-existent prize. 

Phishing scams

Phishing through email, texts (“smishing”) and even voice calls (“vishing”) is an attempt at getting you to click a link or call a number that’s controlled by the scammers.  There’s always a plausible reason for it, and they may very legitimately look like someone you really do business with (phone numbers and emails can be faked, or spoofed) but the goal is to harvest your personal information or payment information.  Scammers might also infect your devices with malware, giving them access to further accounts. 

How to Protect Yourself From Senior Scams

All of these scams work by leveraging triggers that are built into human nature: our tendency to trust others (especially if we’ve formed some sort of bond with them); our desire for gain; a respect for (or fear of) authority; and so on.  Just knowing that these scams exist, and reading how they work, can help “inoculate” you against them by planting a seed of doubt. 

You can also rely on telltale red flags that mark most scams.  Almost invariably you’ll find yourself under pressure to act right this minute, lest something bad happen (or, in some cases, lest you miss out on something good). 

A real IRS representative will never demand immediate payment, for example.  Also, employees of government agencies won’t dictate how you pay.  Demands that you pay by gift card, prepaid debit, wire transfer or cryptocurrency are a sure-fire sign of fraud. 

For more complicated scams, like pig-butchering or real estate scams, you’ll need to set aside any inclination to trust people and do some sleuthing.  Before you give your heart, pay any kind of deposit or accept a check, turn to Spokeo’s people search tools and use the Name Search, Reverse Phone Lookup, Email Lookup and Address Lookup to verify who you’re dealing with.  Don’t click provided links; go to the website on your own and look up the information there. 

What to Do if You’ve Fallen for a Scam

If you’ve already fallen for a scam, and have lost money or personal information to scammers, there are several things you should do as soon as possible.  The first is to report the incident to your local law enforcement, the FBI’s Internet Crime Complaint Center (IC3) and the FTC’s Report Fraud website.  That last site is especially important, because it will walk you through creating a personalized recovery plan to help minimize the damage. 

If there’s the slightest chance that criminals have your banking or credit card information, reach out to those institutions as well to file a report.  You should change any passwords or PINs, and take advantage of any services your bank may offer to help detect questionable transactions.  You should also set up some form of added authentication, beyond your user name and password, to make it harder for scammers to gain unauthorized access to your account. 

The hard reality is that once your money is gone, it’s usually gone forever.  Most institutions will cover you if your money is lost due to a hack or identity theft, but if you’ve fallen for a scam and given up your money voluntarily, your bank won’t make it good for you.  The best you can usually do is make it harder for the scammers to further exploit any information they’ve stolen.  We’ve written about that, and other steps in recovery, previously on this blog

Lean Into Your Experience

In the final analysis, being older doesn’t necessarily mean that we’re easy marks.  Collectively, those of us who’ve been around for a while have a lot of learned experience that can serve us well, if we harness it correctly.  We have — as they say — “been there, done that,” though we may occasionally forget where we’ve put the T-shirt. 

Lean into that experience.  If you’ve had someone take advantage of you before, or abuse your trust, you probably remember it in painful detail.  If anything about a new person or situation reminds you of that one, trust your gut and think of it as a red flag.  Don’t forget the cumulative wisdom of our forebears, either.  Observations like “If it’s too good to be true, it probably is,” and “There’s no such thing as a free lunch” still hold true, and you can add “If the answer has to be now, it has to be no” to your list. 

Those time-honored truisms can save you a lot of trouble, especially if you back them up with a dose of healthy skepticism.  Age — it’s said — breeds wisdom, but proving it is up to each of us. 

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