Unfortunately, older Americans are increasingly the target of financial scams and exploitation. To avoid being a victim of this type of fraud, it’s important to be aware of the most common types of scams. Here’s an overview of a few prevalent scams that you should be aware of and some steps you can take to avoid falling prey to these and other types of schemes.
It’s estimated that older Americans lose a stunning $2.9 billion a year due to financial exploitation schemes. An ever-increasing number of criminals are working to exploit people using phone calls, direct mail and the Internet. To compound the problem, older Americans are often also targeted and exploited by individuals who they trust. The number of older Americans who fall victim to these schemes is substantial and growing. As a result, it’s an issue that retirement-age citizens need to be aware of and proactive about avoiding.
The U.S. Senate Special Committee on Aging has compiled helpful data on the most common types of scams targeting older adults. According to its fraud book, the top 10 scams are:
Social Security impersonation
Currently, the No. 1 scam in the country is the Social Security impersonation scam, which targets the retirement-age population in particular. In 2019, Americans lost a staggering $38 million to this scheme. It works by having perpetrators call targeted victims and claim that they work for the Social Security Administration. They then attempt to either take money from victims or get access to personal information. In some cases, these criminals tell victims that their Social Security number has been suspended or even that there’s a warrant for their arrest. They then claim that to resolve these issues, they need either payment or personal information.
Unsolicited phone calls
Robocalls and unsolicited phone calls are used to get money or personal information from victims. Oftentimes these calls originate overseas; however, current technology has enabled callers to make their number appear legitimate, either as a government number or as the number of a legitimate local business.
In these schemes, perpetrators tell victims that they’ve won money through a lottery or some sort of sweepstakes, but that they must make a payment in order to get their prize. Callers sometimes claim that this payment is an upfront tax payment or that it’s a required service fee. These scams can involve large sums of money and sometimes go on for an extended period, with repeated requests for payments and ongoing promises that a prize is forthcoming.
As more people use online dating services, scammers have begun to create fake profiles to gain the trust of and exploit other users. This is a scam that can go on for weeks, months or even years. After building up trust, scammers will ask for money, often claiming that it’s for an emergency or some sort of unexpected expense.
There are lots of iterations of these scams, but the basic idea is that someone calls potential victims claiming to be with a technology company. They then either ask for money for support services or ask for passwords in order to gain access to personal and financial information.
In these scams, an individual will call claiming to be the victim’s grandchild and will ask for help with some sort of emergency. These calls often involve two individuals – the first claims to be the grandchild and quickly asks for help before getting off the phone; the second is the primary contact for the victim, often claiming to be a defense attorney, police officer or other type of official. This individual provides more information about the “emergency” and asks for money to help resolve it.
For many years, this has been the most common scam in the country. Individuals will call claiming that they are the IRS and that they need immediate payments of back taxes for the individual to avoid arrest or other serious consequences.
This type of scheme takes many different forms as individuals try to get personal information from victims. One common form of this scam is calling claiming that there has been a theft of the individual’s wallet and then asking for personal information to help resolve this issue.
There are two common ways that debt scams are run. The first is to call individuals and claim that money is owed on their credit card and to request immediate payment to avoid adverse actions. The second method is calling and offering to help with debt consolidation. The caller will then say that in order to do provide this service, it’s necessary to first get personal information.
Elder financial abuse
This type of scam involves the inappropriate use of an older person’s assets or property by someone that has close contact with them. This can be a family member, a health care worker or even a stranger who has access to medical records or other personal information.
While elder fraud is a very real problem, the encouraging thing is that by being aware of the issue and taking a few simple steps, you can help to prevent falling prey to these scams. In addition, the Senate Special Committee on Aging, in an effort to help protect Americans against fraud and to raise awareness about this ever-growing problem, has created a toll-free fraud hotline that individuals can call with any concerns or to report any suspicious behavior. If ever in doubt, call the hotline and report the troubling behavior.
In addition, a few things that you can keep in mind to prevent being a victim of financial scams are:
You can find additional helpful tips and information in the Special Committee on Aging’s fraud book.
By staying vigilant and taking preventative measures, you can avoid falling prey to scams designed to exploit seniors. It’s best to always err on the side of caution and to immediately report any suspicious behavior. A little extra caution can ensure that you don’t lose any hard-earned retirement savings to criminal schemes.
An Alliance America financial advisor can assist you in maximizing your retirement resources and help achieve your retirement goals. Alliance America’s planning process is focused on personalized retirement income planning. As fiduciaries, our advisors are required to act in your best interest, and we are dedicated to helping you achieve the retirement lifestyle you seek. You can request a no-obligation consultation by calling 888-864-2542 today.