How to avoid elder fraud: A guide for older people, carers, and relatives

Abeerah Hashim Last updated: November 20, 2022 Read time: 23 minutes Disclosure

Our elderly fellow citizens are the target of elder financial fraud that may inflict massive losses on the most influential persons in their environments. This article explains what elder fraud is and how to keep it away from your loved ones.

Sneak peek at elder fraud

Sadly, the elders of any society are the most vulnerable social groups regarding digital security. The threat actors are too cruel to target naïve elder netizens with various fraudulent schemes, ripping them out of their money. Nonetheless, today’s more advanced and young users can protect their elders from such scams by making them aware of the existing threats. Likewise, staying a little conscious on the internet can also help senior internet users to avoid elder frauds and scams.

Elder financial abuse, elder financial exploitation, or elder fraud is the usurpation of financial resources that harms an elderly victim. In most cases, it occurs in a relationship where the perpetrator holds a privileged position or is highly trusted.

FBI concluded as the elder population keeps increasing, elder fraud has become a growing problem. As a result, the financial damage ascends to 3 billion USD annually. But those reported cases don’t represent even the tip of the iceberg. Other, more profound studies and estimations put the number of instances more on the five-million line, and the economic damage at 27.4 billion USD. So the reality could be one or two orders of magnitude above the official figures.

Given the severity of the issue, this article digs deeper into the subject of elder fraud. Today, you’ll know what an elderly fraud is, why the elderly are such a juicy target for scammers, and how you can help the seniors around you to stay safe from con artists.

Common elder fraud types – Quick list

  1. Fraudulent investment plans. The elderly need investments that pay fast. That’s how they get defrauded.
  2. Insurance fraud scams. Even legitimate, licensed insurance agents have been known to practice this scam.
  3. Grandparent scams. An alleged grandchild calls grandpa or grandma to ask for some money urgently.
  4. Lottery frauds. The fraudsters convince you about winning some lottery that you had not noticed.
  5. Charity-justified fraud. Even fraud can happen for the sake of a seemingly good cause.
  6. Health-related scams. The increased need for health services and resources, like the elderly, allows scammers to come in.
  7. Identity theft. The ultimate hacker currency are alternate identities.
  8. IRS-related schemes. A scammer calls impersonating an IRS officer. Fear does the rest.
  9. Reverse mortgage systems. These are not scams, in theory. They are legitimate financial instruments. However, they can escalate so quickly as to break the user.
  10. Widow schemes. Probably the most inhumane scam, it takes advantage of the confusion a recent mourner experiences after the loss.
  11. Romance scams. Loneliness in the elderly makes them vulnerable to the abuse of persons pretending to have a romantic interest in them.
  12. Tech support frauds. An impersonator tries to gain remote access to your system and manipulate it to steal information in the future.
  13. Anti-aging products scams. Vanity is a terrible reason for suffering a fraud, but it happens.

What is Elder fraud?

Elder fraud refers to fraudulent activities specifically aimed at senior citizens. Such online scams may either come from strangers or include people known to the victims as family or friends. If the attackers are strangers, the scam executes either online or via phone calls.

Email is a typical route to establish contact with an elderly victim. The perpetrators send numerous phishing emails to addresses held by seniors, with messages related to,

  • Health or medical issues (discount prescriptions and health coverage included).
  • Financial support (saving for retirement, home equity issues, and more).
  • Friendship or camaraderie.

But these aren’t the only ones. More carefully devised schemes may involve personalized emails or phone calls. The intelligence that allows preparing such a sophisticated approach to the victim comes from the victim’s information in phishing attacks.

The losses that result from a “successful” elder fraud can run as high as an average of 34,200 USD per case, thus imparting a devastating hit to the victim’s financial stability.

Today, this subject is particularly relevant because the protracted Covid-19 pandemic has changed the world in many ways. Unfortunately, fraud against the elderly has also risen because of the pandemic, and the trend keeps growing inexorably.

Wondering how the pandemic contributes to elder fraud? It’s by offering bogus Covid-19 products (vaccines, air filters, and other worthless therapeutics) and services (testing, contact tracing). Unfortunately, the criminals are adaptative and imaginative, and Covid has given them wings. The promises of those spurious services or products have been enough for the wrongdoers to persuade seniors out of money or out of their personal information, such as Social Security Numbers, insurance, and other critical details. They can then use this information either to attack them right away or to craft a more elaborate scam for the future carefully.

Why scammers target the elders?

As fraud victims go, seniors are by far the favorite target of the swindlers. For example, 10% of all US seniors became fraud victims during 2018, facing an average of 38% of all frauds in general.

Wondering what makes this incident rate exceedingly high? Following are some prominent reasons.

  • Chronic problems. A little empathy goes a long way, especially for an information phisher. If you know the problems the target group of people faces (such as, medication prices, appropriate health care coverage, financial security, depleted retirement funds, and concern for their descendants and family members, in the case of elders), phishing on them becomes much easier. This knowledge allows a scammer to develop a phishing email that hits several sensitive areas in a given population segment, thus drawing attention of the recipients.
  • Isolation. A pleasant conversation with a trusted friend would suffice to prevent many elder fraud cases. But since many senior citizens spend their lives alone, they have nobody to discuss any idea before acting on it.
  • Trusting. Most of our elderly fellows have spent a large part of their lives without the internet. So, naturally, they are unfamiliar with emails and can’t figure out how reliable emails can be. Thus, elders are likely to believe on every message reaching into their mailboxes.
  • Poor decision-making. Age can deteriorate brain’s executive functions. That’s no secret, even in the healthiest individuals. While younger adults are more “famous” for lousy decision-making, older adults are also prone to make those mistakes.

13 most common types of elder fraud

A heartbreaking reality in elderly scams is that the criminal often includes someone a victim trusts, such as family members or carers. According to the Office of Financial Protection for Older Americans, the victims knew the perpetrator in 36% of the cases as an acquaintance, friend, caregiver, fiduciary, or family member. At the same time, strangers are responsible for a little over 50% of elder fraud cases.

Most often, these cases start with online contact through email, social media, and other digital methods of communication.