If you’ve ever been on the receiving end of a phone call, email, or text from an unknown source hoping to coax sensitive information out of you, you’re not alone. Every day, the FBI’s Internet Crime Complaint Center (IC3) receives thousands of calls reporting fraud, many of which are targeting Americans over 60.1 The aim of these schemes may be simple – defrauding individuals out of savings, information, or assets – but the methods they use to obtain information from you may be anything but.
The increasingly sophisticated tactics employed to engage individuals in different schemes make it difficult for people of all ages to recognize when they are being targeted. As many of our financial transactions have evolved to take place in the digital landscape, scams have taken on new forms to carry out an unprecedented amount of fraud. In fact, these key statistics regarding victims over 60 in 20221 depict the staggering scope of scams targeting seniors:
- The sum of total financial losses increased 84% from 2021.
- The average loss per scam victim was $35,101.
- The IC3 received 88,262 unique complaints.
- Over the past 4 years, total losses have continued to rise dramatically, from just under $650 million in 2018 to $3.1 billion in 2022 – yikes!
Why are Seniors Such a Big Target?
For one, older Americans are more likely to have accumulated wealth over their lifetime, either in retirement and savings accounts or physical assets, including their home.2 Furthermore, adults who have retired from the workforce may be less familiar with new technologies or may recruit assistance from adult children or financial advisors in handling their assets. Scammers therefore perceive seniors as being more susceptible to complex schemes carried out online and are incentivized to try and tap into their financial resources. Luckily, there are ways to prevent this from happening to you or your loved ones!
So, what can you do to spot scams and avoid becoming a victim? The best protection is early recognition. Here are 5 of the most common scams according to the FBI, and ways to spot each one:
- Call Center Fraud: Tech and Customer Support/Government Impersonation
Victims over 60 experience nearly 70% of the losses reported under call center fraud, totaling over $724 million.1 One of the reasons this type of fraud is so devastating is because it often occurs over a longer period of time, as it is typically difficult for a victim to realize they are being scammed once the impersonator gains their initial trust. Common instances of call center fraud involve scammers claiming to be a representative from a government agency or popular technology company. These can include groups such as the Internal Revenue Service (IRS), Medicare, and the Social Security Administration (SSA), as well as large companies such as Google or Verizon.5 They often offer some type of service, such as helping you secure medical insurance, assisting you in securing a tax break, or preventing the spread of a virus on your device. In return, they request personal information such as your bank account information or Social Security number, sometimes even “parroting” it back to you in an attempt to legitimize their identity.3
How to Spot this Scam: These scams may hide the real names or numbers that show up on caller ID or contain links to web pages that mirror official ones.4 This is why it is crucial to investigate the numbers and sources you interact with thoroughly to determine their authenticity. Technology and telecommunications companies will never call you about a virus, and you should never allow remote access to your devices or offer sensitive information to these callers. If you receive an unsolicited call from an agent claiming to represent a government agency, hang up and directly contact them through authorized websites and phone numbers to follow up on any legitimate concerns you may have.5
- Investment Fraud
The cumulative losses for victims of investment fraud totaled just under $1 billion in 2022 for individuals over 60, the greatest sum of the different types of scams.1 Investment fraud refers to criminals posing as financial advisors and offering enticing investment opportunities to coerce victims into using retirement accounts or savings for fake investment opportunities. The aim of this scam is to gain access to your financial accounts directly by procuring your bank account information, or by leading you to deposit funds straight to a source they lead you to.3
How to Spot this Scam: If you are not expecting to be contacted about a particular investment opportunity from a specific source, do not engage with anyone reaching out to you about a potential deal. The language scammers use for this type of fraud tends to be absolute and urgent; they will insist the deal must be completed immediately and promise there are guaranteed returns, or no risk involved in the investment.1
- Lottery, Sweepstakes, or Inheritance Scams
These schemes describe a fraudster reaching out to let you know you’ve won a lottery, contest, or sweepstakes, or letting you know you’re set to gain inheritance following the death of someone in your life. Those conducting this scam may utilize information they’ve collected about you from online sources, including your interests and habits, or to find out if a relative or close friend of yours has recently passed away. They often claim the earnings will be available to you after you pay some upfront fees or taxes to their bank account, and may continue this scheme for weeks, months or years.3
How to Spot this Scam: You should never engage with anyone promising a prize for something for which you did not enter or provide any personal contact information. In an instance where you did sign up for a contest, it‘s still a good idea to avoid giving your bank information to someone requesting it and instead reach out to the organizers from a legitimate contact to proceed with.
- Non-Payment or Non-Delivery
This type of fraud was the second most reported fraud among adults 60 and older, with losses reported by nearly 8,000 victims totaling over $51 million in 2022.1 This scam occurs when an item or service ordered via an online retailer or social media site either never comes or is entirely unlike what had been advertised. Scammers recognize the boom of ecommerce and take advantage of people’s willingness to make purchases online. They take measures such as posting false advertisements on different social media venues or online retailers and allowing instant purchases without ever delivering what you’ve purchased.
How to Spot this Scam: It is always safest to shop directly from well-known companies, and it’s always good to double check you’re on their legitimate website. When making purchases online, look for verified sellers with existing reviews from real customers that either include pictures or link to a profile. Advertisements through social media may have been set to target you directly, so it is best to avoid clicking links from these platforms and instead search for the company you are looking for directly online yourself.
- Confidence or Romance Scams
The IC3 received reports from 7,166 victims over 60 experiencing a combined loss of nearly $419 million due to scams relating to close personal relationships.1 This type of fraud includes impersonation of family members or close friends as well as deceptive online relationships with older adults. Oftentimes scammers will reach out pretending to be a child, grandchild, niece, nephew, or other loved one insisting they need immediate financial help. Many will use information found online about you and your family members to create a plausible emergency.3 In romance scams, fraudsters will build a relationship online through social media or a dating app and gain your trust over time through continued communication. They will then ask for monetary assistance to cover some expense for a personal issue or even funds to cover travel to come visit you.2
How to Spot this Scam: Always be wary of those you meet and communicate with solely online, particularly when these individuals make excuses for why they cannot have video calls or meet in person. If you maintain these correspondences, never send them any of your personal information, bank account information, or direct deposits. If a family member or loved one reaches out to you, always ensure it is from their verified contact information. In the event they are describing an emergency in which they need your financial help, check in with other family members or close friends to corroborate their story.
Navigating the landscape of online financial transactions and personal interactions can be tricky, but with appropriate recognition and awareness of how to spot these scams, you can avoid falling victim to one. The key to protection is to consider all aspects of a situation before giving out any personal information about yourself or your financial accounts. Do you trust the legitimacy of the source contacting you? Are you expecting to speak with someone regarding a particular financial opportunity or prize? If not, they are likely not presenting an authentic opportunity.
Furthermore, you should always be wary of threatening language coercing you to transfer funds or deals that sound too good to be true. Reach out to multiple family members, close friends, or a trusted advisor to help you navigate through any potentially fraudulent information and verify the authenticity of companies and agencies before contacting them.
Remaining vigilant and taking your time to parse through and evaluate financial decisions will protect you against potential scams and ensure you achieve a financially secure future. And at Longbridge Financial, we know just how important financial well-being is as we age. Our goal is to provide you with greater financial peace of mind through the responsible use of home equity. If you’d like to learn more about how you can use the power of your home to reshape your financial future, contact our team today!