Senior citizens continue to be prime targets of scammers and criminals.
In a new Federal Trade Commission (FTC) report, Protecting Older Consumers 2022-2023, it says that while younger people reported being victimized by fraud more frequently than older Americans, seniors reported much higher losses. They lost $1.6 billion to scams last year!
In this article, I’ll outline the methods criminals are using to defraud older people. I’ll also share tips from money expert Clark Howard and Team Clark on ways to prevent fraud.
Screenshot via ftc.gov
These Scams Are Tricking Seniors Out of Their Money
1. Investment Scams: $404 Million in Losses
Seniors looking to grow their savings are especially susceptible to investment scams.
“Spend some time checking out the person touting the investment before you invest — even if you already know the person socially,” says the U.S. Securities and Exchange Commission’s Guide for Seniors.
How to prevent it: Take the initiative to look up an investment firm’s or individual’s disciplinary history using the “Check Out Your Investment Professional” search tool at Investor.gov.
2. Business Impostor Scams: $271 Million in Losses
With a 78% increase in government impostor scams, this type of fraud comes in #2 on the list. With a business imposter scam, the perpetrator typically pretends to be a business executive or payroll employee asking for sensitive information such as a copy of a W-2.
The criminal can then use that information to file a bogus tax return, according to this warning from the Internal Revenue Service.
Government imposter scams ($186 million in senior losses) as well as family and friend impostor scams ($32 million) also ranked in the top 10, according to the report.
How to prevent it: Never give your personal information to anyone you don’t know over the phone or via email or text.
This scam is popular around tax time but could pop up any time of the year.
3. Romance Scams: $240 Million in Losses
Clark’s Consumer Action Center (CAC) receives calls, from time to time, from people who have fallen for romance scams.
“I call these the ‘loneliness scams,’” says CAC Director Lori Silverman, “because the person on the other side is seeking a relationship and wants to believe this is real.”
How to prevent it: Lori says to look for signs: dollar signs.
“If they’re asking for money that’s a big clue,” she says. “Especially if they all of the sudden say they need money to get to the U.S. or something like that.”
4. Tech Support: $159 Million in Losses
Older folks who aren’t computer savvy make easy targets for criminals.
These scammers will call you and tell you they work for Microsoft or some other tech company and that your computer needs a software upgrade.
If you give them access to your computer, they could download a malicious program that can steal your personal information.
“At best the scammers are trying to get you to pay them to ‘fix’ a nonexistent problem with your device or software,” according to a Microsoft support page. “At worst they’re trying to steal your personal or financial information.”
How to prevent it: Never give your personal information to anyone you don’t know. Add your landline or cell phone number to the federal DoNotCall.gov list (or call 1-888-382-1222 from the phone you want to put on the Do Not Call list).
5. Prizes, Sweepstakes and Lotteries: $134 Million in Losses
The name of the most well-known sweepstakes brand — Publishers Clearing House — is often used by criminals to dupe unsuspecting people.
If you’re asked to pay a fee upfront to collect your prize, that’s a telltale sign that something’s wrong.
How to prevent it: “Anyone who says, ‘You’ve won. Now pay us,’ is always a scammer. Period,” says the FTC.
6. Online Shopping: $54 Million in Losses
Because so many fake websites can look legitimate, accidentally giving your financial information to a crook is easier than ever.
Buying from a fake site can happen to anyone. Team Clark’s own Lori, who deals with consumer issues every day, says she fell victim once — just by not paying close attention.
“Looking back there were a lot of red flags,” she says. “I was on the original site when shopping, but when I decided to quickly purchase the items, I ended up on the fake site.”
7. Fake Check Scams: $48 Million in Losses
If you’re not careful, a fake check can wreak havoc on your bank account and ruin your credit.
The FTC says, “In a fake check scam, a person you don’t know asks you to deposit a check. It’s usually for more than they owe you, and it’s sometimes for several thousand dollars. They tell you to send some of the money back to them or to another person. They always have a good story to explain why you can’t keep all the money.”
How to prevent it: The FTC says never use money from a check to send gift cards and don’t accept a check for more than the selling price.
8. Timeshare Resales: $16 Million in Losses
Scams involving timeshare sales and vacations are becoming increasingly common. And if you don’t know, Clark has long been of the opinion that timeshares are generally a bad investment.
“Even if you love your timeshare, anything you buy that is hard to ever sell is not a valid product in a market,” he says. “There should be a market both to buy and sell something. Timeshares, sadly, are good on the buying side — you can buy them very easily — but they’re bad on the selling side.”
How to prevent it: Don’t believe anyone who says they can get rid of your timeshare easily, Clark says.
“They charge you huge fees upfront and say they’re going to get you out of your timeshare, guaranteed,” he adds. “The only guarantee is that you’ve paid them big money upfront — often with no results — and you’re still obligated to that timeshare.”
As you can see, with the prevalence of scams out there, the older Americans among us have an uphill battle when it comes to staying protected. Clark says if you have siblings, it’s a good idea to work together to check in on your parents and other elderly relatives.
“Some families find it’s a good plan to divide up responsibilities when you have elderly parents: One kid takes them shopping, another entertains them, and a third handles money issues,” Clark says. “Regardless of how it’s handled, be aware and be present in the financial lives of your elders.”
Want more tips for the elderly? Read up on how to spot elder abuse of a relative or friend.