Elder fraud, otherwise known as “elder abuse” is a growing problem worldwide. The internet has become a convenient avenue for fraudsters to gain access to the elderly. Find out how to spot scams targeting senior citizens.
Many third-agers find themselves in the happy position of having paid off their debts, possessing property that has greatly increased in value over the decades, and enjoying an accumulated nest egg in the bank. This good fortune is a honeypot for liars, con artists, and unscrupulous potential inheritors.
Thanks to the internet, an aggressive dog in the yard and a policy of not letting strangers in no longer protects you from potential scams. The internet has taken over from cold sales calling as the quickest way into your home. While most people know to be skeptical of sales patter, the internet gives fraudsters the opportunity to present a credible case. You need to be guarded against these online cons and I will cover them in this article.
Strangers are not the only threat. Unguarded laptops, tablets, and smartphones give carers and relatives access to the personally identifiable information of the seniors with whom they regularly come into contact. This is another digital access point for fraudsters, and I will explain how you can reduce your risk of being ripped off by keeping track of your electronic devices.
Why seniors are targeted
The US Federal Reserve produces the Survey of Consumer Finances, which shows very clearly why senior citizens in America represent a rich target for fraudsters. If you want to con people out of their money, you need to start out by finding out who has money to spare. Although work status, Zip code, race, and sex are other indicators of income, the demographic age groups into which elders fall clearly indicate that pensioners have money in the bank.
The table below was compiled from SCF data, values in 000s of US dollars in 2016.
|Age of head of family (years)||Median||Mean|
|Less than 35||11.0||76.2|
|75 or more||264.8||1064.7|
Anyone looking for households in the US with money would naturally home in on the older generation.
The reticence of seniors in the face of embarrassing situations is another reason that elder fraud is widespread. In fact, because of under-reporting, no one really knows the full scale of the problem. Estimates on the extent of elder fraud in the USA range from a value of $3 billion a year to $36 billion.
Reported incidences of elder fraud are on the rise, but this is not necessarily because of an increase in activity by fraudsters. It is due to a greater effort by advocacy groups and law enforcement agencies to define the problem and encourage victims to come forward.
Financial abuse is not the only problem that the older generation faces. As many seniors are infirm, they are vulnerable to verbal, physical, and even sexual abuse as well.
Isolation and dependency are other reasons that elder abuse is not fully punished. Physical weakness and degenerative illnesses, such as Alzheimer’s disease and dementia mean that many victims simply do not get the opportunity to report their mistreatment or might be believed.
Of all of the people who prey on the elderly, financial con artists are probably the easiest to catch. Individuals and groups who defraud large numbers of people with scam investment schemes are pursued by the authorities with vigor. The Securities and Exchange Commission (SEC) in the USA has a department called the Office of the Investor Advocate that prosecutes and imprisons financial con artists who defraud the general population. That organization is becoming actively focused on elder fraud issues (PDF).
The main obstacle to extracting yourself from a bad contract and getting recompense for theft is a lack of awareness. Expecting an investment to take time to mature and payout, you may not even enquire about where your money was deposited and whether it actually was invested in the proposed scheme. The long maturity dates of investments aide confidence tricksters the world over and make it easier to rob all age groups, not just elders.
Financial scams don’t just include investment schemes, you might also be offered a good deal on health insurance, pension schemes, or life insurance. Check out any proposal that seems to offer exceptional rewards for insufficient contributions and be particularly cautious about making upfront lump sum payments or agreeing to a high commission.
Be particularly suspicious about equity release or reverse mortgage schemes that will require you to sign over the deeds to your house for a cash advance that is way less than the true value of the property. Pay attention to the fine print about interest rates on loans and be sure that they can’t balloon to the point where you lose your home for a relatively small cash advance.
Even if an advocacy group publicizes a particular scam, you might not be willing to recognize the fraud. The belief that you made the right decision and the need to maintain your dignity can sometimes make you unwilling to admit that you made a mistake.
The Nigerian scam is a clear attempt to con by promising something for nothing. You agree to participate in a slightly shady transaction but gain so much money so quickly that all of your financial worries would be solved forever.
The classic Nigerian scam is delivered as an email from the widow of a deposed African dictator. The lady has about $400 million in a local account and the revolutionaries are closing in, seizing all assets of the members of the overthrown regime.
That dictator probably never actually existed and if he did, your correspondent isn’t his widow, but an avid scammer operating from a location somewhere in Africa. This con originated in Nigeria, which is how it earned its label. However, these scam emails now come from many locations in the world. The theme of the appeal will vary, but the thrust of the proposition is always the same: these strangers just want to pass a large amount of money through your account and will give you a sizeable cut for your participation.
If you take the bait, you will be a fish on the hook. Not unreasonably, you will need to send your bank account details to Mrs. Dead-Dictator. The real person that receives that information won’t send any money. Instead, they will send your bank an instruction that seems to have come from you to send all, or most of the money in your account to their location overseas – a place from which it will be impossible for you to recover the money.
Victims of this scam are not likely to report it due to embarrassment or even the continued belief that the correspondent was telling the truth – you just agreed to launder money, maybe the police will put you in jail.
Unfortunately, there is little that your local law enforcement agency can do to help you with these international scams. Prevention is your best opportunity for protection.
Fraud deterrent: Never give anyone your bank details, tax codes, social security number, or copies of official documents over email.
It’s great to win competitions and it’s a nice surprise when you win a competition that you don’t even remember entering. Although the passing of relatives is a sad time, it can be a happy occasion if a distant relative you’ve never met leaves you some money.
These are two examples of advance-fee scams that are particularly effective in targeting the elderly. Other variations that appeal more to younger people include “free” cinema tickets or season passes for sporting events.
There are many scenarios for this category of con, but they all included one common element: the con artists want you to send them a little money. This payment may be in the form of a “processing fee,” an identity confirmation transaction off your card; or a call to a “winner’s hotline,” which is an overseas premium rate number.
In the advance-fee scam, fraudsters pose as heir hunters, secret shopper marketers, social network marketers, or just about any other credible organization that might reasonably expect you to pay a fee.
Your strongest armor against these scams is to repeat your old grandma’s adage that there’s no such thing as a free lunch. If you do like to enter competitions, but tend to be forgetful, keep a list of all of the competitions you actually entered and don’t pay any credence to emails from winning notices that are from competitions not on that list.
Unexpected legacies are possible. However, use the facilities of the internet to check out the heir hunter’s actual existence. If at all possible, visit the company’s offices. If the business is in a far-off place, look at the online phone listings for the city they claim to be in, find the organization’s number that you acquired independently, and check out whether the person that called you is an employee. Don’t ask the caller for his number in order to verify his identity.
Fraud deterrent: Never pay fees to people who claim to be delivering you a reward.
Phishing is big business and it targets victims young and old. In fact, phishing starts off without any targeting. It is a mass communication method. Have you ever got an email from a bank that you don’t have an account at telling you to log into their online service? This happens many times a day to most people with email accounts. Astonishingly, INTERPOL reports that even they have been impersonated in phishing emails.
Never reply to one of these “misdirected” emails. If you communicate with the scammers, you give them the opportunity of cross-examining you for more accurate information.
A typical phishing email will tell you that your account for an online service is about to be deleted or suspended unless you log in immediately. For convenience, the email contains a button or a link that you can click on to get to the service’s login page.
Do not click on any links in emails. The text that you see does not reflect the real underlying link. Clicking on the link will open a web page in a new tab. That page will look exactly like the real website for the service. However, it is a copy and the username and password fields send your login credentials directly to a con artist’s database.
If you receive an email from a service that you do have an account with, open a new browser tab and enter the web address that you usually use. Sign in to your account and see whether the company has left you any messages about the service. If you don’t see anything there, the alert email you received was probably a scam. Contact the company’s Customer Support department and tell them about the email. It might have genuinely been from the service it claimed to be sent by. If it isn’t, that company will want to log all fraud attempts against its customers.
Fraud deterrent: Never click on links or buttons in emails.
Elders are particularly vulnerable to catfishing. In the USA about 19.5 million people over the age of 65 are single, mainly due to divorce or bereavement. Many of these senior singletons have taken to the internet to rejoin the dating scene. A Pew Research Center study in 2015 discovered that 12 percent of 55 to 64 year-olds in the United States used dating sites and three percent of those over 65 used online dating services. McAfee reports that 14,546 online dating app users reported a romance scam to the FBI in 2016.
You can get to know people without actually seeing them and that situation is a gift to con artists. When you meet someone online, you are actually chatting to a picture. There is no guarantee that the image on a dating profile is really a picture of the person that owns the account.
Catfishing con artists know that people are more likely to send money to people that are attractive and appear to be interested in dating someone who is not so good looking. A love-struck senior is at risk of getting persuaded to keep sending money in the hope of gaining the love of a much more physically attractive dating prospect.
Fraud deterrent: Don’t believe the photos you see on dating profiles and never send money to people you haven’t met, no matter how good looking they appear to be.
The granny scam can be performed by a perpetrator directly masquerading as a relative, or a con artist pretending to be a member of law enforcement or a medical professional reporting the need for assistance on behalf of a relative.
This con relies on the disconnected nature of modern life where grandchildren or junior members of the family often move away for work and do not keep in regular contact. Young people backpacking far away also present opportunities for granny fraud.
In this scam, a grandchild emails or phones home asking for financial assistance. The young person is not actually who he claims to be, but a fraudster masquerading as that young relative. The fake youngster might not be the grandchild of the victim but could be the grandchild of a close friend, neighbor, or relative.
The email or call you receive will tell you that the youngster has been robbed in a strange town and has no money to get home. Other scenarios involve incarceration or a hospitalizing injury. The message might not come directly from the youngster but could come from someone posing as a police officer or a nurse. In each case, because of the debilitating circumstances, the young person isn’t in a position to receive the money directly and so you will be asked to send cash, or deposit money into an account with the name of an unrelated person.
Needless to say, these appeals for help are scams. The information that the fraudster needs in order to convince the victim of his identity comes from a process called “doxing.” This involves compiling information on a target. The knowledge of the relationship between the victim and the purported grandchild can be gleaned from social media profiles.
Fraud deterrent: Never send money to people claiming to be speaking on behalf of a relative. Call the institution where the youngster claims to be, check the facts, and send money directly to the institution if the story checks out.
The elderly rely on medication much more than younger generations. According to a study published in the Journals of Gerontology in 2015, 25 percent of people aged 65 to 69 take at least five prescription drugs to treat chronic conditions and almost 46 percent of 70 to 79 year-olds have prescriptions for five or more medicines. In the UK, Canada, and the Antipodes, the financial burden of medication is not an issue, thanks to state assistance. However, in the United States, medication costs can be financially crippling.
Online pharmacies proliferate and they are a lot harder to control than bricks and mortar establishments. Cheaper sources of medicine could pass you expired goods, weaken contents, reduce the batch size of packages, or just repackage aspirin in order to provide medicines at a cheaper price. The supply of unregulated medicine is a criminal offense in the United States and those patients that seek out drugs from unconventional sources can also be prosecuted, so there is a considerable risk both medically and legally.
Another medicine-related problem that elders are subjected to relates to identity theft, which is examined below. Fraudsters use the identities of elderly patients who are entitled to prescription medicine to buy those restricted drugs themselves and sell them on the black market to addicts and sports cheats. In many cases, the fraudster will use the elderly victim’s own money either through direct theft or credit card fraud, to pay for the medication.
Fraud deterrent: Stick to a reputable online retailer who will deliver if mobility problems prevent you from collecting medicine in person at a local pharmacy.
You have already read about four types of scams that can lead to identity theft: granny scams, dating fraud, phishing, and doxing. People of all ages are susceptible to online identity theft attempts. However, infirm and immobile pensioners are particularly vulnerable because of their dependence on others.
Not everyone working in the health industry is an angel. Home help, care center staff and therapy specialists can also have money worries and drug problems. The ability to trick personal information out of weak old people or gather important personal and financial data from around the home while visiting makes identity theft a big problem for seniors.
Identity thieves can take out credit cards in your names, or fake your signature as a guarantor on loan agreements. Any debts that the fraudster runs up will be your responsibility and these obligations can put your homeownership at risk before you know what occurred in your name without your knowledge.
Fraud deterrent: Lock important official documents away and password protect all of your electronic devices.
Sadly, staff at care homes and in-home carers are also prone to direct theft from the seniors that they work for. A 2016 investigation by the UK’s Mail on Sunday revealed that about £2.7 million a year gets stolen from the elderly in care homes either as tricked forced gifts or outright theft. Sadly, the younger relatives of senior citizens also regard their elders as an easy source of cash. The North American Securities Administrators Association deduced in 2016 that 23% of elder fraud cases in 2015 were committed by family members. Those incidences of abuse were spotted by financial advisors and trustees who are members of the NASAA.
Many senior citizens who do not have the benefit of an appointed administrator have fewer defenses. Many banks and savings institutes keep an eye out for irregular activity. However, if a pensioner is known to be frequently forgetful or confused, a guarding and thieving relative can put up a very convincing defense that is difficult for law enforcement agencies to breach.
Fraud deterrent: Keep bank cards and valuables out of sight and locked in your home. Consider taking out a safety deposit box for your valuables and appoint a financial administrator if your doctor warns you of the onset of degenerative illness.
How to prevent elder fraud
The elderly who are sound of mind should follow the same advice that people of any age have to keep in mind: be skeptical of offers that seem too good to be true, don’t take emails on face value and verify identities offline. For more information on the steps you can take to ensure your data is protected, read our guide on how to secure your computer.
There are a number of agencies that can help you protect your money and your identity against online elder fraud.
In the USA
Check out the North American Securities Administrators Association website for information on bona fide financial administrators for the elderly. Government responsibility for adult protection is devolved to each state, so you would have to search your own state government website for the correct department that offers advice and protection against elder abuse.
The American Association of Retired People is another good source of information about elder abuse protection.
In the UK
Set up a Lasting Power of Attorney. You will need separate LPAs for “health and care” and “money, finances and property.” These must be registered with the Office of the Public Guardian. The registration process costs £82 per LPA. You don’t have to name a trustee if you don’t think you can trust anyone. In these cases, the Court of Protection will act in your interests should your mental capacity become impaired.
The UK government runs a helpline called Action on Elder Abuse. If you believe you have been robbed, you should contact your local police station and if you have a complaint against care home staff you should contact your local council’s Adult Protection team. You can also contact ActionFraud if you believe that you have been conned.
The Royal Canadian Mounted Police has a help page on elder abuse. This recommends that you contact your local police station if you are a victim of elder fraud. The national government runs an Elder Abuse protection programs and each provincial and territorial government also runs support teams. You should also visit the website of the Canadian Network for Prevention of Elder Abuse for more advice.
You can report a scam to the Australian Competition and Consumer Commission. For direct theft, you should contact your local police force. The independent Older Persons Advocacy Network operates a helpline and has a lot of advice for seniors in difficulty on its website. Each state and territory runs its own elder abuse team. You can find a list of elder protection agencies at the MyAgedCare website.
Don’t be afraid of using the internet. Although it is a very convenient channel for fraudsters, it is also a good medium to keep in touch with old friends and make new ones. Isolation is the senior citizen’s enemy and becoming dependent on a limited number of younger people makes you easier to victimize. Try to broaden your contact base to give yourself a support group and prevent your name being added to the elder abuse statistics.