Seniors Are the Target of Many Financial Scams

Inside Subprime: May 23, 2019

By Jessica Easto

By 2030, all baby boomers will be older than 65. That adds up to an estimated 78 million seniors, and for the first time in recorded history, the number of seniors will outstrip the number of children in the United States.

As it stands, thousands of Americans turn 65 each day, and according to one article, many of those seniors will have targets on their backs when it comes to financial scams. According to the Consumer Financial Protection Bureau (CFPG), seniors lose between $2.9 and $36.5 billion every year to elder fraud.

Why do seniors tend to be more vulnerable to financial scams? One reason, according to Joe Snyder of the Washington-based National Adult Protective Services Association (NAPSA), is that seniors often live alone, “which makes them easier prey.” Aging also comes with often inevitable cognitive decline, and then there is the matter of finances—many seniors are living comfortably. “Crooks go where the money is,” said Snyder.

According to the NAPSA, senior financial scams fall into nine common categories:

  • Theft
  • Fraud
  • Real Estate
  • Contractor
  • Lottery Scams
  • Electronic (Phishing)
  • Mortgage
  • Investment
  • Insurance

Often, these techniques are used to get seniors to buy financial products, such as payday loans, bogus mortgages, unnecessary insurance policies, and more, by masquerading as legitimate institutions, like banks or even the IRS.

These scammers aren’t always common thieves that break into a house to loot the valuables. Sophisticated scammers use the phone, computer, and other digital means to make the set up seem as realistic as possible.

The National Council On Aging’s (NCOA) top three financial scams facing seniors in 2019 certainly have these qualities. The first involves spoof calls that appear to be from the Social Security Administration, threatening legal action if the victim on the other line does not comply. The second involves scammers posing as grandchildren in trouble who ask for financial help. The third takes advantage of senior’s charitable side, with scammers posing as organizations collecting money for natural disasters and other causes.

To avoid these scams, the NCOA recommends that you never trust a phone call from the IRS (they almost never call you), never act on a request from a family member before calling them at their regular phone number to double check what they’re up to, and always research charities and other organizations before donating money.

Learn more about payday loans, scams, and cash advances by checking out our city and state financial guides, including Florida, Illinois, Chicago, Ohio, Texas and more.