The elderly, unfortunately, can be viewed as gold mines to con artists, down-on-their-luck relatives or opportunistic acquaintances.
Individuals over the age of 50 control 70% of the country’s wealth, and seniors between the ages of 65 and 74, with an average net worth of $1.06 million, have more assets than any other age group. “That’s where the money is,” says Jay Haapala, AARP associate state director of community outreach in Minnesota. “If college kids had a bunch of disposable income lying around, criminals would be trying to figure out how to scam college kids.”
Dementia, disability and decline can make it even easier for criminals. All told, it is a problem that costs American seniors billions of dollars every year.
In 2021, over 92,000 victims over the age of 60 reported losses of $1.7 billion to the Internet Crime Complaint Center (IC3). This represents a 74% increase in losses over 2020. Many of these targeted scams involve fraudulent wire transfers reaching hundreds of thousands of dollars, specifically targeting the elderly.
The issue of elder financial abuse is likely to continue to grow as an average of 10,000 Americans turn 65 a day, a pace expected to continue through 2030 when all baby boomers will be older than 65, according to the U.S. Census Bureau.
Every May is the nation’s observance of Older Americans Month. This is a good time to bring awareness to scams and mitigation tips to help you better detect and shut down attempts of financial exploitation of the elderly.
Common forms of exploitation
There are myriad scams, unethical businesses and unscrupulous individuals preying on seniors all the time. While the details vary, there are a few familiar scenarios.
Breach of trust: The vast majority of elder financial abuse — as much as 90%, according to the National Adult Protective Services Association — is committed by caregivers or close family members. A son is added to a checking account to help manage mom’s bills and then starts using the account to pay off gambling debts. Or grandpa gives valuables to the housekeeper and eventually — at her suggestion — names her in the will.
Phone scams: Someone calls, ostensibly from the IRS, saying that an individual has a tax bill that is going to rise with interest and fees unless paid immediately. Or someone calls with news that there is a problem with a credit card and they need a Social Security number and birth date to access account information to clear things up.
Phishing scams: As more seniors head online, they grow more susceptible to phishing scams. Phishing emails look as though they come from legitimate sources such as banks or credit card issuers. They ask seniors to click on a link to enter account information in order to verify recent transactions or to rectify problems with accounts. Unfortunately, the links are fake, and criminals use them to gather personal account information, which they use to drain accounts or steal identities.
So, how do you protect yourself and your loved ones from elder financial abuse?
- Never give control of your computer to anyone who contacts you. If you receive a call about a computer problem, hang up. If you suspect something is wrong with your computer or believe the scammer obtained access to it, bring it to a reputable company for a malware check.
- Don't trust phone numbers provided in an email, voicemail, or popup ad. If you want to call the company, use the customer service number on their official website.
- If you are asked to wire money from a recent deposit or overpayment, discuss the situation with a banker, trusted friend or family member. Be truthful about the situation since many scammers direct you to lie about why you're sending money.
- Sign up on the Do Not Call Registry. This prevents businesses from contacting you. Those that do come through either don’t know what they’re doing or don’t care. “Either way,” says Haapala, “you should not do business with them.”
Haapala also reminds seniors to conduct their personal business within the financial services system. Financial institutions, like UnitedOne Credit Union, have fraud protection services that limit an individual’s risk. They also have systems that make it possible to trace funds back to criminals in some instances.
* Source: CUNA Mutual Group
UnitedOne Credit Union has branches in Manitowoc and Sheboygan, and is open to everyone living or working in Manitowoc, Sheboygan, Kewaunee and Door counties. The credit union serves consumers and small to mid-sized businesses.
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