According to a recently released AARP report, older Americans lose an estimated $28.3 billion each year for a variety of fraud. And it is not just total strangers who deceive them. Even those closest to them, from family members to friends, can trick them or tip outsiders, subjecting them to financial scams.
For a retiree, losing a sizeable part of their savings could jeopardize the safety and security of their retired life, with little means to make up for the money lost. So, building awareness about common scams that could threaten their financial safety is critical for safeguarding their hard-earned money from nefarious actors.
Why Do Fraudsters Target Older Adults?
Several reasons make senior citizens frequent targets for shady schemes. To begin with, baby boomers are largely unfamiliar with the types of sophisticated fraud encountered today. This makes it difficult for them to anticipate or understand how they could become vulnerable to deceptive ploys.
They are also not very tech-savvy and often unaware of effective digital barriers required to remain safe from cyber threats, which, unfortunately, make up a large part of modern-day scams.
The trusting nature of the older generations doesn’t help either. To make matters worse, most scammers assume that retirees have more savings than their younger counterparts. As a result, swindlers could focus more on older Americans.
Top Financial Scams That Target Senior Citizens
1. Lottery and Sweepstakes Fraud
Racketeers could impersonate popular lotteries or sweepstakes and contact older adults to inform them about a large cash prize or a vacation they had won. For a retiree, this is indeed welcome news. But there is a catch—they will need to wire some money to process the payment and pay taxes. And they must act fast to claim the prize since, otherwise, it is offered to the next person in line.
Without checking facts, most people would hurry to transfer the requested sum in such situations. But, after they do, they will find they are unable to contact the relevant organization or individual.
2. Deceptive Telemarketers
Marketing calls can also trick retirees into purchasing numerous products, wasting their money on items they don’t need or those of poor quality. Some simply take the payment and don’t courier anything at all.
These types of fraud targeting seniors usually revolve around medicine, supplements, and healthcare treatment plans.
3. Grandparent Scams
These usually involve a sudden call in the middle of the night from a grandchild. The call is unclear, so it is not easy to gauge their voice. Of course, this is because they are calling from another country. And they need their grandparent’s help urgently—they are in trouble and require some money transferred quickly to an overseas account. Without hesitation, many older adults will wire money, not realizing they have just been duped by a stranger.
4. IRS Scams
This is another common impersonation scam that targets older Americans for financial fraud. IRS imposters could, for instance, mention an unpaid tax and demand an immediate settlement to avoid a visit from the police or cancellation of Medicare.
5. Tech Support Scams
Racketeers could also imitate tech support staff and contact senior citizens in an attempt to exploit their lack of knowledge in technology-related matters.
These fraudsters could claim they have detected a virus attack or a critical software expiration. Without understanding the risks, many seniors will grant the caller remote access to their computers. Once they do, scammers may steal sensitive data stored on the device or plant malware to access information, which would eventually allow them to carry out financial fraud.
6. Robocalls
Criminals often use automated messages to steal confidential data, including bank and credit card details, social security numbers, and tax information, that could compromise the victim’s identity and financial wealth.
7. Romance Scams
Many older adults experience social isolation and are in desperate need of company. Knowing this, bad actors could target them for numerous romance scams, showing fake affection to siphon money from their bank accounts.
Essential Tips to Prevent Financial Scams
So, how can older adults ensure their safety and ward off unexpected threats to their savings?
Trust No One
Trust is the single most critical factor that makes individuals gullible to fraud. Therefore, a cautious approach is essential for minimizing risks and staying safe.
Verifying unexpected communications is an important step, even when their initiators seem familiar. The good news is, there are plenty of online resources to find and verify information today. For example, PhoneHistory, a reverse phone number lookup service, can help search contact numbers and uncover details about their registered owners. Google is best for name searches and to learn more about an individual or organization.
Protect Personal Information
Personally identifiable information—from bank account numbers and SSNs to usernames and passwords—allows criminals to carry out various financial frauds. So, keeping data secure, in both digital and hardcopy formats, is critical for mitigating threats.
But it is not just strangers from whom older adults should keep their personal information safe. They must also be cautious about what they share with those close to them. For example, never disclosing financial details to friends and family is a prudent habit to adopt at any age.
Practice Digital Safety
Applying strong passwords, installing malware protection, avoiding attachments, links, and online ads, blocking spam, and turning off browser tracking are some of the essential steps to take.
Seek Advice
Scammers often ask their potential targets not to reveal details about their communications with others. But trusted advice from loved ones could help older adults safely navigate many tricky situations.
Key Takeaways
Financial scams targeting senior citizens are increasingly common, although many go unreported due to various reasons. Fake lotteries and sweepstakes, fraudulent telemarketers, grandparent scams, IRS fraud, deceptive tech support calls, robocalls, and romance swindles are the most prevalent schemes threatening the safety of older generations in America.
However, by building awareness about these frauds, retirees can easily avoid many of their risks. Trusting no one, keeping personal data secure, practicing digital safety, and seeking advice from loved ones is also critical.
