Reports, common frauds and keeping seniors safe
The elderly population is among the most targeted by fraudsters. Longer life spans and accumulation of wealth over that time, combined with a vulnerability due to a greater level of trust, might shed light on why these victims are so often pursued.
Comparitech Research Group estimates that one out of every 10 elderly people fell victim to fraud in 2021. People over the age of 60 experienced the highest median dollar amount lost per fraud incident in reports that were made to the Federal Trade Commission (FTC) in 2021. Of that group, the median amount lost for people aged 70-79 was $800 and $1,500 for those 80 years and older. In total, the amount lost to those 60 and older was $1,034
The Federal Bureau of Investigation’s fraud reporting center, the Internet Crime Complaint Center (IC3), reported in its 2021 Elder Fraud Report that the IC3 received over 92,000 complaints from people over the age of 60 with reported losses of almost $1.7 billion, representing a 74 percent increase in losses over 2020.
Reporting could be the biggest black hole
While some complaints may have been filed with both the FTC and the IC3, therefore creating duplicate reports, these are statistics from only two agencies. There may be thousands more fraud-related crimes against seniors that might have only been reported to local authorities, never reported, or worse, never noticed. In fact, Comparitech estimated that annually the number of cases could be as high as 7.86 million with over $148 billion in losses.
Six common types of Senior Fraud
Common frauds affecting people over 60 as reported in the IC3 report for 2021 include:
- Tech support fraud was the most reported fraud with almost $238M in losses. This category includes tech support scammers as well as people impersonating client support staff from banking institutions, utility companies and virtual currency exchanges.
- Confidence fraud and romance scams made up the highest dollar amount of losses for all categories with over $432 million in losses. This category includes not only romance scams where criminals feign affection and take advantage of lonely hearts to then scam people out of money but also the “Grandparent Scam” where scammers pretend to be that person’s grandchild asking for money right away because they are in some kind of trouble and don’t want to get their parents involved.
- Lottery/sweepstakes/inheritance fraud accounted for 2,600 complaints and $53M in losses. Usually, these types of scams involve the victim receiving some kind of notification that they have won or inherited something and in order to get the winnings, they must pay taxes or fees upfront.
- Government impersonation accounted for $69 million in losses, a 30% increase from 2019. This type of fraud involves criminals impersonating a government agency and leading victims to believe they will be harmed (physically or financially) if they do not pay. This type of fraud is also frequently used to gain personally identifiable information such as social security numbers or account information that can be used for identity theft. It is important to note that government agencies WILL NOT call, text, email or reach out via social media to demand information or payment.
- Investment fraud accounted for $239M in losses, up nearly 60 percent from the previous year. Investment fraud often involves presenting guaranteed returns and low-risk, high-gain returns. Examples of this category include Ponzi schemes, distressed real estate scams, pyramid schemes and precious metals investments.
- Cryptocurrency, while a relatively new way to make payments, it is also rapidly becoming a preferred way for scammers to be paid for any of the above fraud categories. Cryptocurrency fraud accounted for $241M in losses in 2021.
Eight tips to keep your loved ones and yourself safe
The National Council on Aging offers these eight tips for seniors to help avoid money scams:
- Be aware that you are at risk from strangers—and from those closest to you
- Don’t isolate yourself—stay involved!
- Tell solicitors: “I never buy from (or give to) anyone who calls or visits me unannounced. Send me something in writing.”
- Shred all receipts with your credit card number
- Sign up for the “Do Not Call” list and take yourself off multiple mailing lists
- Use direct deposit for benefit checks to prevent checks from being stolen from the mailbox
- Never give your credit card, banking, Social Security, Medicare, or other personal information over the phone unless you initiated the call
- Be skeptical of all unsolicited offers and thoroughly do your research
First things to do if you or a loved one has been a victim of fraud or identity theft
- File a report with the FTC at identitytheft.gov
- File a report with FBI Internet Crime Complaint Center (IC3)
- Contact your financial institution or credit card company and close and place fraud alerts on your accounts
- Get a copy of your credit report from annualcreditreport.com and commit to monitoring it regularly
- Freeze your credit reports
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