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5 Most Common Elder Financial Scams

Elder Financial Scams: Why You Need to Know Them

Financial scams are costly, widespread, and on the rise. Elder financial scams are often the most damaging to their victims, leaving them unable to recover their losses.

In a majority of cases, these scams involve one or more fraudsters who target a victim due to their age or income. Con artists attack older Americans because they suspect that they have more income and are more susceptible to falling victim.

Elder financial scams are also considered a “low-risk” crime because they often go unreported or are tough to prosecute. However, for the victim, these attacks are damaging and leave them in a vulnerable position where they may not be able to recover their losses.

Here, are the five most common elder financial scams, so you have a better understanding of what fraudsters are doing now.

Scam 1: Government Impersonation Scams

All of the scams below focus on scammers pretending to be from government agencies. It’s common that the scammer will demand explicit things like personal identifying information and specific forms of payment. This way they can commit identity theft later on.

It’s important you look out for this suspicious activity. It’s also important that you know scammers can use special technology called “spoofing” to change their zip codes and phone numbers. They do this to trick you into thinking that the caller is from a valid source.

Health Care/Medicare/Health Insurance Fraud

Scammers target older U.S. residents over 65 that qualify for Medicare. They often will threaten the victim by telling them that their Medicare benefits will be cut off if they don’t provide personal identifying information.

This way they can gain access to the elderly person’s personal information, so they can bill Medicare and pocket the money. They do this by posing as a Medicare representative or providing bogus services at makeshift mobile clinics.

Internal Revenue Service (IRS)

In this scenario, the scammer will pretend to be an employee at the IRS. They’ll tell the victim that they have unpaid taxes. In some cases, they’ll threaten arrest or deportation if they don’t pay up immediately.

Social Security Administration

Like Medicare, scammers will threaten their older adult victims. Usually, they’ll say the victims Social Security benefits will be cut off if they don’t provide personal identifying information like their social security number. They do this to commit identity theft later on.

Scam 2: Sweepstakes and Lottery Scams

Many people are familiar with scammers sending out emails or calling victims to tell them that they won a sweepstakes or lottery prize. There is however a huge catch: victims will have to send them money, cash, or gift cards. Sometimes scammers will imposter well-known sweepstake organizations and continue to call their victims for months or years after defrauding them.

Scam 3: Robocalls, phone scams, and telemarketing

Older people are twice as likely to use a phone to bank or purchase. This makes them more trusting of scammers who pretend to be a charity, family member, or some other trustworthy stranger.

Sometimes, these calls are extremely sophisticated. A scammer will use multiple voices to call the victim pretending to be different people. Other times, it will be a short “Can you hear me?” call where the scammer needs the person to say “yes” to get a voice signature. The scammer can use that voice recording later to authorize unwanted charges on stolen credit cards. Here are a few popular scenarios:

1. The pigeon drop: A scammer calls a victim to tell them that they found a large sum of money and is willing to split it if the victim makes a “good faith payment” by withdrawing funds from their bank account. The scammer will typically pose as a lawyer, banker, or other trustworthy stranger.   
   

2. The grandparent scheme: This scam involves the victim and their relatives. It uses the victim’s emotions against them, so they quickly send money without thinking about it. Most commonly, the con artist pretends to be the person’s child or grandchild. This pamphlet goes over how to protect yourself from the “Grandparent Scam.”
   

3. Charity scam: People pretend to be recognizable charities, often changing a few words or letters in the name, to trick victims into donating to their fake organizations. This often occurs after natural disasters. One example is scammers using “Make a Child’s Wish” instead of the real organization name “Make a Wish.”
   

Scam 4: Internet Fraud

With older people not using the computer as often, they’re more susceptible to internet fraud because they weren’t taught how to look out for viruses or phishing attempts. Some examples include:

1. Phishing scams: Phishing refers to email scams that are designed to trick victims into clicking dangerous links. They look like they’re coming from a legitimate company or institution. Most of the time they’re asking victims to click a link or send them their personal information to “verify their account.”
   
2. Computer tech support scams: Con artists design pop-up messages that appear on an older person’s computer. The pop-up tells the victim that their computer needs repair and to call the number on the screen. Then, the scammer will request remote access or demand they pay a fee to have their computer repaired.
   

Scam 5: New Scams

With more people relying on technology, more scammers are creating new ways to con people out of money. Newer scams include romance scams, COVID-19 scams, and investment scams.

1. Romance or online dating scams: Scammers use online dating apps or social networking sites to trick their victims into sending them money. They play on their victims emotions by manipulating or grooming the person over time. Scammers do this so they can obtain money or personal information to steal their identity according to Kaspersky.

The Federal Trade Commission (FTC) has an informative page on what to know about romance scams and how to report them. You can check it out to see common lies scammers tell, hear real-life stories, and easy ways to spot a romance scam. Here are the most common romance scams to avoid:

• Military romance scams
• Fake dating sites
• Inheritance scams
• Photo scams
• Intimate activity scams
  
  
• COVID-19 scams, rumors, and price gouging: It’s important to know that COVID-19 scams are so much more than scammers trying to get your money. You also need to look out for rumors and price gouging. There are many current coronavirus scams going on right now to steal your personal information or charge you unfair amounts for face masks, hand sanitizer, or household/personal care items.

Some things you can do to keep yourself protected is to: not share photos of your vaccination card on social media; trust anyone pretending to be a fake charity, COVID-19 testing or research facility, or FEMA’s COVID-19 Funeral Assistance Program employee; and learn about emerging COVID-19 scams from the FCC.

• Investment scams: Scam artists will imposter or pose as financial planners. They’ll often offer “appealing and farfetched investment advice to the unsuspecting investor,” according to Letitia James NY Attorney General’s website.
  

There are a lot of signs you may be dealing with an investment scam such as failing to disclose conflicts of interest, hidden fees and commissions, extra fees, phony investment opportunities, and practicing without proper licensure or registration. Some financial areas investment scammers focus on are:

• Annuities
• Individual retirement account (IRA) investments
• Promissory notes
• Predatory lending
• Prime bank schemes
• Internet fraud
• Affinity group fraud
• Ponzi/pyramid schemes
• Unregistered investment products
• Unlicensed individuals selling securities
• Bogus franchise and business opportunities
• Phony international investments
• Gold mining schemes
• Bullion deals
• Coin swindles
• Precious metal deals
• Boiler rooms
• Viatical investment scams
  

There are a lot of investment scams to be aware of because they’re directly tied to financials. The best way to protect yourself is to verify the license of the person selling the investment, verify the investment is registered, and beware of any other that’s “too good to be true.”

You can visit the FTC website to take action and report fraud. You can also go to the Office for Victims of Crime learn about the most recent types of financial scams. Remember: The best way to avoid being a victim is to be aware of anything that seems too good to be true. 

What You Can Do to Report an Elder Financial Scam

If you or someone you know is a victim of a financial scam, you have the ability to report it. USA.gov suggest you report scams and frauds to the FTC online, or by phone at 1-877-382-4357 (9:00 AM – 8:00 PM, ET).

They can’t resolve your individual report. However, they can tell you how to protect yourself. We also encourage you to report the scam to First New York FCU (if it deals with your bank account or banking information) and local authorities.

Contact Us for Elder Fraud or Scams

First New York Federal Credit Union’s highly-professional tellers can assist you if you think you or your loved one has been a part of a scam or elder abuse. We can help protect your or your parents by supporting you through the next steps.

If you’re unsure of a potential scam, contact us. Call (518) 393-1326 or toll free at 800-734-7375, and press 2 to speak with a Member Service Specialist. Contact Center is available Monday-Friday from 7 a.m. until 6 p.m. and on Saturday from 9 a.m. until 1 p.m.