How To Avoid Becoming A Victim

June 15 is World Elder Abuse Awareness Day (WEAAD). Launched in 2006 by the International Network for the Prevention of Elder Abuse and the World Health Organization at the United Nations, WEADD serves as a call-to-action for individuals, organizations and communities to raise awareness about elder abuse, neglect and exploitation.

Helping to protect and enrich the lives of our most vulnerable citizens has long been a passion of mine. In 2012, my wife Jeanie and I founded Dreamweaver Foundation, a non-profit organization committed to honoring our most cherished generation in their final days by fulfilling end-of-life dreams for seniors with terminal illnesses through experiences that these very special seniors will never forget. Over the past decade, the organization has granted more than 375 dreams to seniors living in eastern Nebraska and western Iowa, and we’re always dreaming of ways to fulfill even more. We also recently launched our Connecting Hope program, which focuses on bringing joyful experiences and meaningful connections to older adults who are socially isolated.

Isolation is not only a quality-of-life issue for seniors but can make them more vulnerable to various forms of elder abuse, including financial abuse. As a wealth advisor, I’m keenly aware of what can happen when older adults are deprived of their resources, and subsequently their independence, through financial fraud or scams. This is particularly devastating to older adults because they may not have the time required to recoup losses.

Unfortunately, fraud is not always perpetrated by unknown entities operating in distant lands or dark corners of the internet. Often, older adults are taken advantage of by the people they know and trust the most – family, friends and caregivers. According to the AARP Public Policy Institute, family members steal twice as much as strangers. AARP states that financial exploitation is the most common form of elder abuse in the U.S., with the average victim losing $120,000. Older adults with cognitive challenges are the most vulnerable to exploitation and are estimated to have up to twice that amount stolen.

Fraud is a growing threat to seniors

Despite increased efforts on the part of financial, government and law enforcement institutions to thwart incidences of fraud, financial scams represent a growing threat to seniors. Since 2020, scams targeting seniors more than doubled, and the number of incidents continues to rise. Earlier this year, the IRS issued a Consumer Alert, outlining over a dozen identity theft scams targeting taxpayers and their tax preparers. In March, the Social Security Administration warned about new scams targeting beneficiaries receiving both retirement and disability benefits. Sadly, these are just the tip of the iceberg when it comes to the number of schemes aimed at defrauding older adults.

As phishing, smishing, spoofing and related cybercrimes become more sophisticated and personal, including the use of artificial intelligence (AI) and deep fakes, it becomes increasingly difficult for the most vulnerable members of society to identify scams and protect themselves. In January, the U.S. House of Representatives passed the Financial Exploitation Prevention Act (S. 1481/H.R 500) which would allow mutual fund companies and similar pooled investments to intervene when they suspect a transaction is financially exploiting an adult age 65 or older, or a younger person with impairments. As of this writing, the bill remains in the Senate, pending a vote. If passed, the bill would be welcome news for millions of seniors and their family members seeking additional ways to help protect their independence and their legacies. However, the best protection against fraud begins at home through education and vigilance.

While contacting potential victims by phone has long been a successful approach for scammers, many have branched out to cybercrime as a growing number of older adults are comfortable conducting personal business online and engaging with family and friends through social media.

A common element to most of these scams is that the perpetrators will ask for payment via gift cards purchased by the victim. The use of gift cards makes it nearly impossible to trace the transactions, and equally impossible for the victim to recover their losses.

Phishing emails and text messages scams have also grown more prevalent with many appearing to be from banks, credit card companies, stores or utility companies that unwitting victims may do business with. They usually request personal data, such as Social Security or credit card numbers, or log-in credentials, to “verify” the person’s account.

According to the National Council on Aging, the following five scams make up 65% of complaints received by the U.S. Senate Special Committee on Aging Fraud Hotline.

1. Government impersonation scams: Scammers call unsuspecting older adults and pretend to be from the IRS, Social Security Administration, or Medicare. They often “spoof” the actual phone number of a government agency or call from the same area code to trick people into thinking the caller is from a valid source. Government imposters may demand specific forms of payment, such as a prepaid debit card, cash or wire transfer.
2. Sweepstakes and lottery scams: The perpetrators call an older adult to tell them they’ve won a lottery or prize of some kind. To claim their winnings, the older adult must send money, cash or gift cards up front to cover supposed taxes and processing fees.
3. Robocalls: Robocalls are used to carry out a variety of scams on trusting seniors. Some claim that a warranty is expiring on the victim’s car, appliance or electronic device, and payment is needed to renew it. One common robocall is the “Can you hear me?” call. When the older person answers “yes,” the scammer records their voice and hangs up. The criminal then has a voice signature to authorize unwanted charges on items like stolen credit cards. Another popular phone scam is the “impending lawsuit” scam where the caller claims to be from a government or law enforcement agency telling people if they don’t pay a fine by a certain deadline, they will be sued or arrested for some made-up offense.
4. Computer tech support scams: Technical support scams prey on older people’s lack of knowledge about computers and cybersecurity. A pop-up message or blank screen usually appears on a computer or phone, telling the victim their device is damaged or infected with malware. When they call the support number for help, the scammer may either request remote access to the older person’s computer and/or demand they pay a fee to have it repaired.
5. The grandparent scam: This is a particularly devious scam due to the emotional element. Scammers call a would-be grandparent and say something along the lines of: “Hi, Grandma, do you know who this is?” When the unaware grandparent guesses the name of the grandchild the scammer most sounds like, the scammer is able to instantly secure their trust. The fake grandchild then asks for money to solve some urgent financial problem, such as overdue rent, urgent car repairs, or jail bond.

Guarding against elder fraud

Education is the first line of defense against all types of financial scams. The Federal Trade Commission, Consumer Finance Protection Bureau and the Internal Revenue Service are among many government websites that provide information on prevalent scams, tips for protecting yourself and loved ones, and ways to report suspected fraud. Being vigilant and suspicious can also help head off crime. Before responding to unsolicited contacts, consider the following:

• If you receive a call, text or email about something that looks or feels unusual, threatening, too good to be true, or otherwise “phishy,” take time to verify before responding. Websites like Snopes.com or FBI.gov list many common scams.
• If you receive a solicitation from a company or financial institution asking you to click on a link to verify account or shipping information, don’t follow the instructions provided. Instead, contact the institution via the number listed on its public website to inquire about any attempts to contact you.
• Keep in mind, the IRS will never call, text or email you with inquiries. In the event the agency reaches out to you, they will do so via the U.S. mail. If you’re concerned that a letter received in the mail may be fraudulent, contact or visit your local IRS office to verify it.

What if you become a victim?

Often, crimes against seniors go unreported because people are embarrassed or afraid that it will cost them their independence. However, as financial fraud becomes increasingly sophisticated, it’s easier than ever for people of any age or income level to be victimized. If you suspect you have been scammed, get help immediately:

• Contact your bank or other financial institution. They may be able to cancel or reverse improper transactions or at least monitor your accounts.
• Report the incident to one of the government agencies listed above or contact your state’s Office of the Attorney General. If you’re not comfortable doing this on your own, enlist the help of a trusted family member, friend or advisor to help you report the incident.
• Retain any correspondence, texts, phone numbers, emails or voicemail messages associated with the scam. This information can be helpful to authorities in their attempt to track the perpetrators.

For more tips on protecting yourself and loved ones from financial exploitation, download this free guide from the Consumer Finance Protection Bureau: Money Smart for Older Adults Resource Guide.

Working with a wealth advisor who is an independent fiduciary can be another good way to help minimize financial risk as you age. Your advisor can help you put strategies in place to help protect your income, assets and independence through tax-efficient investment, estate and legacy planning strategies. Working closely with a team of professional wealth, tax and legal advisors can help ensure you have a plan in place to help protect your interests and your independence. To get started, download our Estate Planning Checklist.