Senior Citizens at a Higher Risk of Financial Fraud
Inside Subprime: Oct 19, 2018
By Ben Moore
Senior citizens are at a significantly higher risk of becoming victims of financial fraud and scams. The National Center for Victims of Crime estimates that financial fraud costs around $40 billion a year, with the majority of this fraud being committed against Americans over the age of 60. Scammers are targeting senior citizens through a variety of channels, including phone calls, emails, and internet schemes that cater to senior citizens’ tendency to be more trusting than younger citizens. Eric Evans, the associate director of advocacy and outreach for AARP’s Louisville office, recognizes that “scammers specifically target seniors” because scammers realize that seniors have access to large pensions and, frequently, the natural inclination to want to help.
There are some common scams that can easily be avoided. One common scam is known as the “grandparent scam”; a phone call is placed to a senior citizen claiming the senior’s grandchild is in desperate need of money in order to get out of a difficult financial situation. Seniors are also targeted by IRS imposter scams in which the senior is told they owe money in back taxes, with the caller typically asking for payment in gift cards.
If the caller asks for payment in the form of a gift card, this is a sure sign that the call is a scam. The gift cards are typically sold in a laundering scheme online, providing profit for the scammer. Some other illicit schemes are fake GoFundMe accounts asking for donations for fraudulent businesses or health problems, fraudulent charities which claim to provide benefits to veterans, and callers posing as police officers. Just recently an Oklahoma City senior citizen was scammed out of $15,000 by an elaborate scam in which a man and woman showed up at his home posing as policemen.
Scammers tend to be difficult to track down because they use fake email addresses, hack social media accounts, and use phone numbers that cannot be traced. Proactive measures should be taken to ensure financial protection. The AARP recommends using a password manager to safeguard your login information from potential hackers and scammers. Most are free and easy to use, with Dashlane, 1Password, and RoboForm being the top recommended password managers. All passwords are encrypted through the password manager with Secure Sockets Layer (SSL) and AES-256, the strongest grade of encryption available.
The AARP also highly recommends monitoring your bank accounts regularly, and suggests using unique login IDs and passwords for different accounts. You should also regularly check your credit reports and credit score to monitor fraudulent activity. Americans are entitled to a free copy of their credit report every 12 months through AnnualCreditReport.com.
The AARP has investigated multiple scams and provides more information on protection and scam assistance online. It is key for senior citizens to continue to be aware of fraudulent schemes as scammers are becoming more savvy. Ultimately, the general rule of thumb is that if the offer sounds too good to be true, it is most likely a scam.
Call scams have been on the rise and many are linked to predatory payday loan providers (both real and fictitious). For other major calling scam headlines and advice, check out:
For information on predatory scams and payday loans, check out all of our Subprime Reports, including: