Senior citizens face a heightened risk of fraud, and every year, scam artists steal billions of dollars from seniors. These scams became even more pronounced during the COVID-19 pandemic when many elders were at home, lonely and isolated.
Scam artists steal from elders of all income levels, and they typically try to get as much as they can. Some victims may lose just a few hundred dollars while others may lose hundreds of thousands, but even a relatively modest loss can be devastating to many people.
If you want to help protect your financial institution’s elder clients from scams, fraud, and financial abuse, you need to understand the most prevalent threats. Here are the most common scams against elders right now.
1. Government imposters
These fraudsters contact elders and claim to be from the government. They say they’re calling on behalf of the Social Security Administration, the Internal Revenue Service, or a similar agency, and they try to get money or information from the victim.
For example, a thief may tell their victim that there is a problem with their Social Security account. Then, they may demand the victim’s Social Security Number or bank account details to “fix the problem”.
These scams leverage the victim’s fears to steal their personal details. Then, the thief may take over their account, open new accounts in their name, or commit other types of identity theft.
2. Medical scams
Medical scams are relatively low-hanging fruit for scammers targeting seniors because they don’t have to research the victim’s insurance company. They can just assume the victim is on Medicare and use that to their advantage.
With medical scams, scam artists often repeat a variation of the government imposter scam. For example, they may tell the victim that their Medicare benefits will be suspended if they don’t make an additional payment right now. Or they may say there was a problem with the last payment and request the victim’s banking details.
In other cases, medical scams focus on a current event. In particular, right now, they take advantage of fears or concerns over COVID tests or COVID vaccines.
3. Computer tech support scams
A tech support scam usually starts with an email, a text, or a pop-up on a website. The message tells the senior that there is trouble with their computer, tablet, or phone, and it instructs the elder to call a number.
If the elder calls the number, they will speak directly with a scam artist. The thief may convince the victim to let them take remote control of their computer, allowing the thief to access all kinds of sensitive information. Or the thief may demand a payment to “fix” the issue.
4. Lottery scams
With a lottery or sweepstakes scam, the scam artist sends the victim a fake money order or cashier’s check. The thief tells the victim that they have won a prize, but before they can claim the prize, they must pay a few taxes or fees.
Generally, the victim deposits the “lottery winnings” and then wires money to the thief to cover the “taxes or fees”. A few days later, the bank realizes the deposit is fake, and it reverses the funds. The victim hasn’t won anything, and they’ve lost the money they’ve sent to the scam artist.
With these types of scams, if the senior doesn’t have the funds to bring their account back into the black, they may just walk away from their empty account. Then, your financial institution may end up dealing with the losses.
5. Romance scams
Romance scams cost elders approximately $84 million every year. These scams often start online, and they target single or widowed victims. The thief strikes up an emotional connection with the victim. They typically create a fake persona such as someone who used to be in the military and now lives abroad.
Once the thief builds up an emotional relationship with the victim, they ask for money. They may tell the victim that they want to come to visit, but first, they have to take care of a few medical expenses. Or they may make up another story.
In some cases, the scammer may convince the victim to send nude photos or videos. Then, they threaten to send the photos to the victim’s friends and family unless they receive a ransom.
6. The grandchild-in-trouble scam
This scam preys on grandparents’ concern for their grandchildren. Typically, it starts when a scam artist calls the victim and says, “guess who this is?” If the victim guesses one of their grandchildren’s names, the thief will say “yes” and the scam will start.
The thief will claim they are in trouble, and they will ask the “grandparent” for money. To avoid detection, the thief will ask the grandparent not to tell anyone. Then, they will request to get the funds in an untraceable format such as a wire or gift cards.
7. Financial abuse
Nearly half of all financial scams against seniors are perpetrated by someone the victim knows. Sadly, adult children are the most common culprits, but grandchildren, other family members, and caretakers all commit fraud against elders.
Often, these scams don’t involve the victim losing a chunk of money all at once. Instead, they typically involve the thief skimming funds from the victim’s account slowly over time. However, these scams can also include identity theft, new account fraud, forged checks, and other types of bank fraud.
To protect the elder customers of your financial institution, you should educate them on how to look for scams. Send out newsletters or emails or even consider offering free workshops for seniors. That can be a great way to help your customers, while also promoting a positive image for your financial institution in your community.
Additionally, you need fraud detection and prevention tools in place. To learn more about protecting your financial institution and your customers from fraud and financial scams, contact us.
At SQN Banking Systems, we offer a range of fraud detection and prevention tools that can help you and your customers thrive and survive in spite of the increased risk of fraud in today’s environment.