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How to Identify Fraud Targeting the Elderly

identity fraud, long-term care, financial planning

Identity fraud scams are bad enough, but when the scammers target the elderly, some of the most fragile and vulnerable in our population, their actions are particularly offensive.

The US Department of Justice recently reported the largest coordinated sweep of identity fraud involving US seniors. The perpetrators scammed money and information from more one million elderly people. To give you some idea of the scope of their activities, 200 out of 250 defendants identified in the sweep were charged with crimes. These third-party scam artists account for 27% of seniors who are financially exploited.

Con artists and scammers employ a variety of schemes to defraud seniors of their identity information and money, but there are usually warning signs. Here are a few:

  • A large number of them are conducted over the telephone.

  • The scams often involve scare tactics. For instance, posing as an Internal Revenue Service agent claiming back taxes are owed, or frightening a grandparent into believing that their grandchild has been arrested and needs bail money wired to them.

  • Other schemes include the promise of a prize or lottery cash if a senior will just send a large fee in order to collect their “winnings.”

  • Even romance scams targeted at seniors are growing in popularity. The attacker can befriend multiple seniors online and then ask for money to cover “travel expenses” to visit them. This is particularly successful as many seniors are dealing with isolation and loneliness.

  • The online shopping world is yet another vehicle employed by scam artists to defraud seniors of money. Scam artists are now setting up websites that appear to be a legitimate online auction house such as E-bay. By pretending to sell a product that the senior desires, they not only scam them out of the cost of the item, but also obtain valuable personal information and credit card numbers.

  • Finally, as always, seniors should watch out for files that are downloaded through email attachments, usually from strangers. The attachments download malicious software to their device that is designed to steal critical identity information.

  • And the situation is only likely to get worse, as smartphones and other devices proliferate.

It is also important to understand that the problem is not limited to mentally impaired seniors. Of the 27% who are financially exploited by a third party, 67% exhibit no symptoms of cognitive decline. That is a huge number of mentally fit seniors being financially exploited. Rather than cognitive decline, the main issues, instead, would appear to be:

  • Emotional vulnerability, stemming from isolation, boredom, and inactivity, and

  • Lack of basic essential computer literacy that subsequent generations take for granted.

Seniors who are targeted by these scams are often embarrassed by them. Worse yet, some may never report that they have been victimized, due to fear of retribution from the perpetrator, or even concern that government agencies or family members will label them unfit to care for themselves.

If you or a loved one is concerned about being victimized by an online scammer, there are several things you can do:

  • If you have a loved one who is living alone, and who regularly utilizes a computer, talk to them about the pervasiveness of online scams, and encourage him/her to contact you when they are in doubt about whether they are being scammed,

  • Look into account and credit monitoring services, to see if one is workable for you or your family, and

  • Consider reorganizing the finances of you or your loved one by executing legal documents that make it harder for scammers to get at most (or all) of your assets.

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