The Fraud Examiner

Elderly Fraud Scams: How They’re Being Targeted and How to Prevent It

Angie Kennard felt something was “off” with her 79-year-old father. When they talked on the phone he would tell her about a woman he met online and occasionally sent money to. Even though her father never met the woman in person, she would profess her love for him through emails and ask him to send her money to feed her and her daughter. Angie told her father that he was being conned, but he would not listen and continued to send the woman money anyway. It was only after Angie was given power of attorney over her father due to a massive stroke that she realized the extent of the scam. She found numerous emails from the woman asking for money, including receipts from wire transfers. After doing a little digging, Angie found that her father had sent the woman more than $700,000 over a course of two years; practically his life’s savings. Unfortunately, this is not uncommon. According to research by the Stanford Center on Longevity and the Financial Industry Regulatory Authority’s Investor Education Foundation, those over the age of 65 are more likely to have lost money due to a financial scam than someone in their 40s. To help the elderly avoid becoming victims of fraud scams, it is important to understand why they are targets, what schemes and tactics are commonly used against them and how these schemes affect them.

Why are the elderly frequent targets of fraud scams?

Most victims who become the targets of fraud scams are considered to be in the naïve segments of the population. Unfortunately, elderly individuals are the most frequent targets of fraud scams. Fraudsters target the elderly, as they may be lonely, willing to listen and are more trusting than younger individuals. Many fraud schemes against the elderly are performed over the telephone, door-to-door or through advertisements. The elderly are prime targets to schemes attributed to credit cards, sweepstakes or contests, charities, health products, magazines, home improvements, equity skimming, investments, banking or wire transfers, and insurance.

What tactics do fraudsters use to take advantage of the elderly?

Fraudsters use different tactics to get the elderly to fall victim to their schemes. They can be friendly, sympathetic and willing to help in some cases or use fear tactics in others. The tactic used is generally dependent upon the type of situation the fraudster finds himself in with the elderly person. For example, a fraudster might focus on home ownership. The fraudster will recommend a “friend” that can perform necessary home repairs at a reasonable price. This friend may require the individual to sign a document upon completion confirming that the repairs have been completed. In some cases, the elderly victim later learns that he signed the title of his house over to the repairman. In other cases, not only is the person overcharged for the work, but the work is not performed properly.

Which are the most common scams targeting seniors?

According to the National Council on Aging (NCOA), the top 10 scams targeting seniors include the following:

  • 1.Medicare — In scams involving Medicare, fraudsters pose as Medicare representatives to get seniors to give them their personal information, such as their Medicare identification number. The fraudster uses this information to bill Medicare for fraudulent services and then pockets the money.


  • 2.Counterfeit prescription drugs — As prices for prescription drugs increase, seniors look the internet to find cheaper prices for their medications. Unfortunately, fraudsters are aware of this and set up websites that advertise cheap prescription drugs which are usually counterfeit. Seniors who unknowingly purchase these counterfeit drugs soon realize they have been duped when the drugs do not provide any relief from their medical condition or even cause additional health problems.


  • 3.Funerals — In one type of funeral scheme, fraudsters use obituaries to find out information about the deceased in attempts to extort money from family members or grieving spouses. They claim the deceased has an outstanding debt that must be paid immediately. Those close to the deceased are usually in a vulnerable state and are more likely to pay the fraudulent debt. In another scheme, dishonest funeral directors might try to deceive the elderly by capitalizing on their unfamiliarity of funeral costs and sell them unnecessary services, such as a casket when the deceased is going to be cremated.


  • 4.Anti-aging products — With society putting so much emphasis on physical appearance, many individuals feel the need to find treatments or products that claim to help them conceal their age. Scammers advertise anti-aging products that are either worthless or harmful. Some products might contain materials that can be harmful, yet touted by scammers as being as effective as a brand name product, such as Botox. Scammers might also advertise products as being effective and natural, but in reality the product has no anti-aging effects. 


  • 5.Telephones — Phone scams are the most common scams used against the elderly. Scammers might get seniors to wire or send them money by claiming to be a family member who is in trouble and needs money. They might also solicit money from the elderly by posing as a fake charity, especially after a natural disaster.


  • 6.Internet — Since the elderly are usually not as savvy with handling emails and surfing the internet, they are easy targets for scammers. Victims have been tricked into downloading fake anti-virus software that allows scammers access to personal information on their computers. Seniors might also respond to phishing emails sent by scammers asking them to update their bank or credit card information on a phony website.  


  • 7.Investments —Many seniors plan for retirement or manage their savings after they finish working, which makes them more vulnerable to become victims of investment schemes. Fraudsters can take advantage of victims by posing as financial advisors to get access to their retirement funds and savings. Once they have access to the funds, they take their money and run.


  • 8.Mortgages — Elderly victims who own their homes can be valuable assets to a scammer. Scammers might send out fraudulent, yet official-looking, letters to victims that list the supposed assessed value of their home. For a fee, the scammers inform them that the value of their home can be reassessed. Scammers might also approach victims about providing home repairs and pressure them to take out equity to use as payment for the repairs.


  • 9.Sweepstakes/lotteries —This scheme usually involves contacting elderly victims either by mail or telephone, and informing them that they have won a prize of some sort, but must pay a fee to obtain the prize. Scammers send a fake check to the senior to deposit in their bank account knowing it will take some time for the bank to reject the check. Meanwhile, the victim has sent the scammer money through wire transfer for fees or taxes on the prize. The victim soon realizes that he was scammed when the check doesn’t clear.


  • 10.The grandparent scam — This scam is extremely deceptive because it plays on the elderly’s emotions. In a grandparent scam, a scammer calls an older person and pretends to be their grandchild. They ask them if they know who is calling, and when the grandparent guesses the name of one of their grandchildren, they pretend to be that grandchild. The scammer tells the grandparent that they are in some sort of financial bind and asks if they can send money using Western Union or MoneyGram to help them out. The scammer asks the grandparent not to tell anyone about their situation. Once the scammer receives the money, he continues to contact the grandparent and asks them to send more money.

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