Elder Fraud: Safeguarding Seniors Against Cybercrime

William Chalkley
William ChalkleyUpdated

Cybercriminals stole $342.5M from America’s elderly last year. This comprehensive guide shows carers, relatives, and seniors everything they need to know to avoid and report the most dangerous elder fraud scams of 2018.

Elder Fraud Hero Image

America’s seniors work hard their entire lives to prepare for retirement, but continue to be disproportionately targeted for fraud. High savings, a trusting nature, and technological advancements make them vulnerable to exploitation not only by strangers online, over the phone and through the mail but also from family members and those they trust.

Afraid, embarrassed, or unsure, many victims leave these crimes unreported. Some may not recognize they have fallen victim to a scam, while many are uncertain about which law enforcement or consumer protection agency they should contact.

In an effort to educate seniors and carers on emerging trends, protect them from current threats, and encourage the exposure of abuse, this guide provides a detailed explanation of the most prevalent scams along with tips on how to spot them. With combined figures from the FBI’s cybercrime data release and the U.S. Senate’s 2018 Fraud Book, you’ll find the latest and most authoritative advice on how to identify, prevent, and report scams to the appropriate state and federal agencies.

Whether you’re an older adult or someone that cares for one, knowing the risk factors and who to contact can help support the nation’s forces in their efforts to combat elder abuse and educate the public to make America safer for all.

IRS Impersonation

Nearly $12.5M was lost to government impersonation scams in 2017

What Is It?

One of the largest schemes affecting senior Americans today, the IRS impersonation scam has defrauded around 2.1 million U.S. citizens to date, and continues to be one of the most reported scams in the nation.

While there are many versions of the scheme, criminals posing as IRS officials generally call victims over the phone and demand immediate payment for allegedly unpaid taxes or penalties – often threatening arrest, foreclosure, or other adverse legal action.

Methodology

Victims are usually instructed to pay using a certified check, credit card, electronic wire transfer, prepaid debit card, or gift card. After payment, targets are often told that they must pay additional sums to resolve further discrepancies. This process can be repeated multiple times; as long as a target remains convinced, further demands will be made.

Criminal tactics have evolved in recent years in response to updated IRS policies. Reports show that fraud artists now claim that they are following up on letters previously sent by the IRS, or demanding payment in the form of iTunes gift cards. In another variation, callers request financial information under the guise of issuing a refund.

Criminals take a number of steps to disguise their location and legitimize the appearance of their call. Caller-ID spoofing is a tactic used to disguise genuine telephone numbers and make it appear as if a call originates from a certain organization. Scammers typically spoof a ‘202’ area code – the code for Washington, DC.

Scammers have also “spoofed” their phone numbers to make it appear as though they are calling from local law enforcement agencies. To unsuspecting victims, this can make it seem as if the “Internal Revenue Service” or the name of the local police department is appearing on their caller ID.

How Can I Protect Myself?

The IRS released the following tips to help taxpayers identify suspicious calls that may be associated with the imposter scam:

  • Do they insist you need to pay immediately? The IRS will never call a taxpayer to demand immediate payment, nor will the agency call about taxes owed without first having mailed a bill to the taxpayer.
  • Will they let you check their identity before you pay? The IRS will never demand that a taxpayer pay a sum without giving him or her the opportunity to verify the identity of the caller. Real IRS representatives will be happy to verify their identities, and can tell you their badge number so you can check their employment. They will let you contact them through an alternate method in order to verify that the debt is real before they take your payment.
  • How do they want you to pay? The IRS will never ask for a credit or debit card number over the phone. Instead, they will ask you to pay through their official payment processing center, or with a check. If someone asks you to pay with a wire transfer, a prepaid debit or gift card, or a Green Dot Moneypak, that’s a scam.
  • Are They Using Scare Tactics? The IRS will never threaten to send local police or other law enforcement to have a taxpayer arrested. Many victims describe IRS scam callers as rude, threatening and abusive; real IRS representatives do not use these tactics.
  • If you received a letter, does it look suspicious? IRS notices come with a certified reference number, and are likely to be free of spelling and grammatical errors. You can look up the reference number online to make sure the document is legitimate, or call the IRS directly if you have any questions. Only return the form to the official listed address of the processing center.

What Can I Do If I’ve Been Targeted?

If you’ve been contacted – by phone, post, or email – and are still unsure, call the IRS back at their main official number. Here, you can ask an official representative to help you find out if you owe taxes, and, if you do, what your payment options are. You can contact them directly at 1-800-829-1040.

An unexpected phone call from someone threatening you with arrest or deportation if you fail to pay immediately is a scam. Report these calls and other IRS impersonation schemes to the Treasury Inspector General for Tax Administration at 1-800-366-4484 or online at IRS Impersonation Scam Reporting. You can also contact the U.S. Senate Special Committee on Aging’s toll-free Fraud Hotline at 1-855-303-9470.

File a complaint with the FBI’s Internet Crime Complaint Center.

You can file a complaint with the Federal Trade Commission (FTC) through their Complaint Assistant to make the information available to investigators.

All official IRS payment options are listed at https://www.irs.gov/payments. If you are being encouraged to use a payment method that is not listed there, it’s most likely a scam.

An unexpected email purporting to be from the IRS is always a scam. The IRS does not initiate contact with taxpayers by email or social media to request personal or financial information. Report all unsolicited email claiming to be from the IRS online or by email to phishing@irs.gov.

Please refer to Contact the IRS if you have a tax question not related to phishing or identity theft.

Remember, never give out any information or money based on a phone call unless you know and trust the person.

Resources

U.S. Treasury Inspector General for Tax Administration (TIGTA)

TIGTA IRS Impersonation Scam

IRS Phone Scams News Release

IRS Taxpayer Bill of Rights

IRS Tax Scams/Consumer Alerts

Telemarketing and Robocalls

Over 3.5 million robocall complaints were filed between Jan-Aug 2017

What Is it?

The second most common scam reported to the Senate’s Fraud Hotline involves unwanted telephone calls or ‘robocalls’. In 2017, the FTC received more than 3.5 million robocall complaints within the first eight months.

Despite the implementation of the national Do-Not-Call Registry, the rise of new technology has made it much easier for scammers to find and deceive consumers. As with impersonation scams, con-artists typically spoof their number to mask their true identity and make it appear they are calling from a trusted local area code or government entity.

Scams using this method can take a number of forms, typically offering unfeasible rewards such as low cost travel packages, government grants, advance-fee loans, outlandish investment opportunities, extended car warranties, and free trial offers. Scammers tend to threaten legal action, request personal information, or demand immediate payment.

Methodology

High-volume phone calls from international locations were once difficult and expensive, with traditional equipment being costly, complicated to operate, and hard to spoof. Today, phone calls can be digitized and routed from anywhere in the world at almost no cost. With cheap and simple spoofing and robo-dialing services now available through multiple companies and cell-phone applications, scammers can now easily cast a wide net to maximize the number of vulnerable individuals they reach.

A new scam which arose in 2017 involves calls in which the victim is simply asked “Are you there?” or “Can you hear me?” in order to prompt the recipient to say “yes.” According to the FTC, these illegal robocalls are pre-recorded, and are designed to identify numbers that consumers are likely to answer, allowing scammers to better identify potential victims. After responding, “yes,” consumers would often report that the call would immediately get disconnected. The immediate concern was that scammers would record the consumer’s voice and obtain a voice signature, which might then be used to authorize unwanted charges on items like utility bills, phone bills, or even stolen credit cards.

How Can I Protect Myself?

The Federal Communications Commission (FCC) and Federal Trade Commission (FTC) have published the following tips to help consumers avoid being deceived by robocalls, ID spoofing, and ‘Can you hear me?’ scams:

  • Do not give out personal information in response to incoming calls from those you don’t know. Identity thieves are clever: they often pose as representatives of banks, credit card companies, and government agencies to convince victims to reveal their account numbers, social security numbers, mother’s maiden names, passwords, and other valuable information.
  • If you receive a surprise inquiry from a company or government agency seeking personal information, do not provide it. Instead, hang up and call the official phone number on your account statement, in the phonebook, or on the institution’s website to find out if the request was legitimate.
  • Government grants are made for specific purposes, and require an application process. They are not simply given over the phone. Most government grants are awarded to states, cities, schools, and nonprofit organizations, and grants to individuals are typically for things like college expenses or disaster relief. They never require fees of any kind.
  • If you receive a call from someone you don’t recognise asking “can you hear me?” Don’t respond, just hang up. Don’t press 1 to speak to a live operator or any other number to be removed from the list. If you respond in any way, it will probably just lead to more potentially dangerous robocalls.
  • Contact your phone provider. Ask them what services it provides to block unwanted calls.
  • Put your phone number on the Do Not Call Registry. Access the registry online or by calling 1-888-382-1222. Callers who don’t respect the Do Not Call rules are more likely to be crooks.

What Can I Do If I’ve Been Targeted?

  • File a complaint with the FTC. Report the experience online or call 1-877-382-4357.
  • File a complaint with the Senate Special Committee on Aging’s Fraud Hotline. Report the experience online or call (855) 303-9470.
  • File a complaint with the FBI’s Internet Crime Complaint Center.

Resources

Do-Not-Call Registry

National Do-Not-Call Complaint Form

FTC Consumer Information: “Can You Hear Me Now?”

FCC Stop Unwanted Calls and Texts

IRS Spot a Scam Phone Call 

FTC Consumer Information: Phone Scams

Fraud.org Avoiding Sales Calls

Lottery and Sweepstakes Scams

U.S. citizens lost over $16.8M to lottery scams in 2017

What Is it?

Lottery and Sweepstakes scams continue to claim thousands of senior victims every year. In these schemes, an individual is contacted about winning or being entered into a lottery prize or sweepstake, and is asked to pay a tax or fee in order to receive winnings or improve their chances. According to the Federal Trade Commission (FTC), the number of sweepstakes scams reported increased by 44.5 percent between 2013 and 2016.

At the scheme’s peak, law enforcement and FairPoint Communications estimated that sophisticated Jamaican con artists placed approximately 30,000 phone calls to the United States per day, and stole $300 million per year from tens of thousands of seniors.

Methodology

Sweepstakes scams start with a simple phone call, usually from a number beginning with “876,” the country code for Jamaica. At first glance, this country code looks similar to a call coming from a toll-free American number. Scammers tell victims that they have won a lottery or a brand new car, and that they must first wire a few hundred dollars to cover processing fees and taxes in order for their winnings to be delivered. The criminals will often instruct their victims not to share the good news with anyone so that it will be a “surprise” when their families find out.

Scammers tell victims to send the money in a variety of ways, including prepaid debit card, electronic wire transfers, money orders, and even cash. No such winnings are ever delivered, and the “winners” get nothing but more phone calls demanding additional money. Victims who resist further demands often begin receiving calls from criminals posing as American government officials, asking for personal data and bank account numbers so they can “solve” the crime.

How Can I Protect Myself?

The American Association of Retired Persons (AARP) published the following tips to help seniors avoid being deceived by lottery scams:

  1. Any lottery or sweepstakes proclaiming ‘guaranteed’ wins or requiring upfront fees is a scam. The one exception involves “skill contests” (solving puzzles, submitting recipes, etc.), where participation may legally require a small entry fee.
  2. If you didn’t enter a contest, you didn’t win — no matter what you’re told. If you play a national or state lottery and win, it’s up to you to produce the ticket as proof; lottery officials don’t contact you.
  3. If congratulations come with a check — with instructions to deposit it and send a portion back — the check is fake. No legitimate contest issues partial-payment checks and asks for a portion back. Counterfeit checks are often used in lottery scams.
  4. Beware of regional targeting. Scammers sometimes set up phony state or county lottery websites to target victims based on location.
  5. Duped once? You’ll be targeted again, maybe right away. If you send upfront fees for a contest, expect to be hounded for additional fees. It may be touted as a larger jackpot than originally promised. Your name will likely find its way onto a “lead list” that details names, contact info and even specific pitches that victims fall for, for use in future operations.
  6. Clues to a sweepstakes scam are often in the fine-print. It’s a sure scam if any of the following information is missing: start and end dates; judging date and criteria; type of proof of purchase required; description of prizes and approximate retail values; legal disclaimers; and sponsor’s name and address. Even with these included, it’s wise to do an online check of the contest name before entering.

What Can I Do If I’ve Been Targeted?

If you believe you’ve responded to a scam, file a complaint with:

Resources

AARP Fraud Fighter Call Center

Department of Homeland Security Tip Line

Postal Inspector

Western Union Fraud Unit

Moneygram Fraud Unit

GreenDot MoneyPak Fraud

FBI Field Office

Secret Service Field Office

FCC

FTC Consumer Response Center

FTC Consumer Information: Lottery and Sweepstakes

AARP Tips to Avoid Lottery Scams

Confidence Fraud

Confidence fraud took over $211M from victims in 2017

What Is it?

Confidence Fraud can appear in many forms. At its core, a perpetrator will deceive a victim into believing they have a trust relationship, be it family, friendly or romantic. As a result of that belief, the target is persuaded to send money, personal information, or items of value to the scammer. Common variations of this scheme include romance fraud or the ‘grandparent scam’.

Methodology

The ‘grandparent scam’ deliberately targets older Americans. Imposters pose as the victim’s grandchild and insist they need money to help with an emergency such as getting out of jail, paying a hospital bill, or leaving a foreign country. Scammers play on victims’ emotions and trick concerned grandparents into parting with their money as quickly as possible.

In a similar version of the scam, the con artist pretends to be an arresting police officer, a lawyer, or a doctor. It is common for those impersonating grandchildren to talk briefly with the victims and then hand the phone over to an accomplice impersonating an authority figure. This improves the story’s credibility and reduces the chance that the victim will recognize that the caller is an imposter.

Other forms of confidence fraud often involve online dating, where a con artist will exploit a senior’s loneliness and vulnerability. Typically, scammers contact victims online through a chat room, dating site, social media, or email. With the rise in online dating use among seniors in recent years, investigators have seen an increase in reports from older people and their family members who are concerned about their loved one’s involvement in a fictitious cyber-relationship.

Scammers have also been known to gain the trust of victims by assuming the identities of U.S. soldiers, claiming to need financial assistance while serving overseas. Criminals will often take the real name and rank of a U.S. soldier who is currently serving their country, and even use real photos of that soldier to create elaborate profile pages, giving their stories more credibility.

Conversations can take place over weeks or months as the con artist builds trust with their victims. Money is inevitably requested – often under the guise of travel or hotel expenses, hospital bills and medical emergencies, visas, or losses from a temporary financial setback. The FBI warns that, in addition to losing money to these con artists, victims may also have unknowingly taken part in money laundering schemes or the shipping of stolen merchandise.

How Can I Protect Myself?

The FBI’s Internet Crime Complaint Center has published a number of tips to help prevent consumers from falling victim to confidence scams:

  • Are they demanding payment? If you’re contacted by someone claiming to be family and requesting immediate payment for an alleged emergency, ask them some simple questions that only the real family member would be able to answer. Never send money to someone you don’t know personally.
  • Is it too good to be true? Be cautious of individuals online who claim a new romance was destiny or fate, that they cannot live without you, or that you are meant to be together. If an individual tells you he or she is in love with you but needs you to send money to fund a visit, you should be suspicious.
  • Research. Use online searches to verify a person’s photo and profile are legitimate, and that the material has not been used elsewhere. Go slow, ask lots of questions, and beware of sending inappropriate photos or financial information that could later be used to extort you.
  • Do they refuse to meet? Beware if an individual promises to meet in person but always finds an excuse to avoid it. Fraudsters often claim to be originally from the United States but are currently overseas for business or family matters. If you haven’t met them after a few months, you have good reason to be suspicious.

What Can I Do If I’ve Been Targeted?

If you’re a victim of a grandparent scam or another form of fraud, report it to the FTC at ftc.gov/complaint or by calling 1-877-FTC-HELP. AARP’s Fraud Watch Network also provides further tips and advice on how to spot and avoid these scams.

  • File a complaint with the Senate Special Committee on Aging’s Fraud Hotline. Report the experience online or call (855) 303-9470.
  • If you suspect an online relationship is a scam, stop all contact immediately. If you are the victim of a romance scam, file a complaint with the FBI’s Internet Crime Complaint Center.

Resources

FTC Consumer Response Center

State Attorney General

Department of Homeland Security Tip Line

FBI Field Office

Secret Service Field Office

Tech Support and Computer Fraud

Claimed losses from tech support scams rose 90% to $15M in 2017

What Is it?

Tech Support Fraud is a widespread scam in which criminals claim to provide customer, security, or technical support in an effort to defraud unwitting individuals and gain access to their devices. There are many versions of this scam, and criminals are constantly changing their tactics.

Methodology

Criminals have been known to use telephone calls, locked screens, internet pop-ups, and fake URLs in attempts to dupe their victims. Recent reports have also shown a rise in the use of emails with dangerous links or fraudulent account charges. Below are several of the most common variations of this scam:

Scammers Contact Victims: In the most prevalent variation of the scam, con artists randomly call potential victims and offer to clean their computers or sell them a long-term technical support “service”. The con artist typically manipulates the victim’s computer to display benign error messages to convince them of a malfunction.

Scammers generally charge victims between $150 and $800, and may install free versions of antivirus programs to give the illusion that they are repairing the computer. If victims express concern about the price, the con artists often entice them by offering a “senior citizen discount.”

Victims Unknowingly Contact Scammers. In a similar vein, individuals surfing the Internet may see a pop-up window on their computer instructing them to contact a tech-support agent. Scammers have been known to use this pop-up window to hack into victims’ computers, lock them out, and require a ransom in order to regain control.

Some consumers unwittingly call fraudulent tech support numbers after viewing the number online. Consumers who search for tech support online may see the number at the top of their “sponsored results” in search engines. Many criminal organisations pay to appear in search results for specific terms; these search terms are cleverly chosen to confuse people into thinking the fraudsters are associated with well-known companies.

Ransomware. Scammers use malware or spyware to infect victims’ computers with a virus or encrypt the computers so they cannot be used until a fee is paid. If victims refuse to pay, scammer’s will render the computer useless, prompting the appearance of a blue screen that can only be removed with a password known by the scammers.

Fraudulent Refund. Scammers contact previous victims – often under the guise of a government agent – stating that they are owed a refund for prior services. The scammers generally convince victims to provide access to their computers to process an online wire transfer. Instead of refunding the money, the fraudsters use the victims’ account information to charge for additional sums. This “fake refund” variation of tech support fraud is increasing in reports and losses.

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In the majority of these schemes, the criminal will attempt to connect to the victim’s devices in order to download personal files containing financial accounts, passwords, and personal data. The information is used to request bank transfers or open new accounts for unauthorized payments. Criminals will also send phishing emails to personal contacts from the victim’s computer.

Criminals have been known to pose as a variety of different support representatives in order to resolve issues including compromised email and bank accounts, computer viruses, and software license renewal. Several recent complaints involve criminals posing as support representatives for income tax assistance, GPS, printer, and cable companies. They may also pose as an associate of a well-known technology company such as Microsoft, Apple, or Dell.

Unlike other victim-assisted frauds, where the scammers are successful in just one out of a hundred-plus attempts, it appears that computer-based scams have a very high success rate.

How Can I Protect Myself?

The Federal Trade Commission (FTC) and FBI have issued the following tips to help consumers avoid becoming a victim of a computer-based scam:

  • Do not give control of your computer, credit card, or financial information to a third party that calls you out of the blue. Remember that legitimate customer, security, or tech support companies will not initiate unsolicited contact with individuals.
  • If you want to contact tech support, call them directly. Be cautious of phone numbers obtained via open-source internet searches. Instead, look for a company’s contact information on its software package or on your receipt.
  • If a caller repeatedly pressures you to buy a computer security product or says there is a subscription fee associated with the call, resist the pressure to act quickly, and hang up. Criminals often use a fabricated sense of urgency to scare their victims and lure them into immediate action.
  • Make sure you have updated all of your computer’s anti-virus software, firewalls, and popup blockers. Install ad-blocking software that eliminates or reduces pop-ups; Adblock or Ublock are good options.

What Can I Do If I’ve Been Targeted?

  • Individuals who receive an intrusive pop-up or locked screen should shut down the device immediately. Ignore any instructions to not power off or restart the computer. Victims who reported shutting down the device and waiting a short time to restart usually find the intrusive message has disappeared.
  • Should a criminal gain access to your device or accounts, take precautions to protect your identity. Immediately contact financial institutions to place protection on your accounts, change your passwords, and actively monitor the accounts for suspicious activity.
  • If receiving spam email, forward the spam email to spam@uce.gov. This is managed by the Federal Trade Commission.
  • File a Complaint: Individuals who believe they may be a victim of an online scam should file a complaint with the IC3 at www.ic3.gov. The more often fraud and scams are reported, the better equipped law enforcement can be to address the issues. If reporting tech support fraud, be as descriptive as possible in the complaint including:
  1. Identifying information of the criminal and company. This includes websites, phone numbers, and e-mail addresses used by the criminal and any numbers you may have called.
  2. Financial institutions, account names, and numbers receiving any funds, even if the funds were not actually lost.
  3. A description of the interaction with the criminal.
  4. The e-mail, website, or link that caused a pop-up or locked screen.
  • Report it to the FTC at ftc.gov/complaint or by calling 1-877-FTC-HELP.
  • File a complaint with the Senate Special Committee on Aging’s Fraud Hotline. Report the experience online or call (855) 303-9470.

Complainants are also encouraged to keep all original documentation, e-mails, faxes, and logs of all communications.

Resources

To view previously released PSAs and Scam Alerts, visit the IC3 Press Room.

FTC Tech Support Scams

Investment and Securities Fraud

Americans lost almost $97M to investment fraud in 2017

What Is it?

Investment fraud can appear in a number of forms. Common variations often include retirement schemes, Ponzi schemes, and pyramid schemes. At its core, vulnerable investors are induced to make purchases on the basis of false information, usually offering large returns with minimal risk.

Methodology

According to the U.S. Securities and Exchange Commission, the following investment scams are most commonly used to target Americans:

  • High-return or risk-free investments. Some unscrupulous brokers and investment advisors recommend unsuitable products that don’t meet the objectives or financial situations of investors. Inappropriate recommendations might occur when a broker sells speculative, high-risk investments such as options, futures, or penny stocks to individuals who are near retirement or are retired.
  • Pyramid schemes. In this old scheme, fraudsters promise quick, sky-high returns for doing nothing but handing over money and getting others to do the same. Despite claims to have legitimate products or services to sell, these deceivers simply use money coming in from new recruits to pay off early-stage investors. Eventually the pyramid will collapse, and many people lose their money.
  • Promissory notes. A promissory note is a type of debt similar to a loan, used primarily by companies to raise money. Typically an investor agrees to loan money to a company for a set period of time in exchange for a fixed return and interest on the investment. While these can be legitimate, those marketed to individuals often turn out to be worthless. Most established companies have borrowing relationships with financial institutions, therefore this type of legitimate transaction among individuals is rare.
  • Internet investment fraud. Internet investment fraud is similar to other fraud perpetrated over the phone or through the mail. Fraudsters use a variety of Internet tools, including bulletin boards, online newsletters, spam emails or chat rooms to spread false information. They may also build a sophisticated website to make their scam appear legitimate.
  • Affinity fraud. This fraud refers to investment scams that prey upon members of certain groups such as the elderly or religious and ethnic communities. Those promoting these scams often are – or pretend to be – members of the group. They enlist respected community or religious leaders from within the group to spread the word and convince people that a fraudulent investment is worthwhile.

Note: While these represent some of the most common forms of investment fraud, fraudulent investment practices are not limited to the variations listed here. These schemes can appear in any number of adaptations; each potential opportunity should be vetted thoroughly.

How Can I Protect Myself?

Unlike other forms of fraud, those who do business with an unlicensed broker or a firm that later goes out of business may have no way to recover their money down the line. Investors should be sure to consider the following tips before committing to an agreement:

Registration. Most investments are some form of securities that must be registered with the state securities regulator or with the Securities and Exchange Commission (SEC). Check to see if the opportunity you are considering is registered by contacting your state securities regulator. If the potential investment is not properly registered, do not invest.

Check the person and history. Make sure the person or their firm is well-known, has been in the industry for several years, and is properly licensed and regulated. You can find instructions on how to do this on the NASAA website. Carefully examine any testimonials you read or see advertised, and check if they have any previous regulatory complaints filed. You can check out the disciplinary history of brokers and advisers for free using the SEC’s and FINRA’s online databases, or look for the company’s financial statements on the SEC’s EDGAR filing system.

Ask questions. Scam artists are counting on you not to investigate before you invest. Compare promised yields with current returns on well-known stock indexes – claims that an investment is a “breakout stock pick”, has a “guaranteed return” or has “huge upside and almost no risk!” are hallmarks of extreme risk or fraud. Watch out for pitches that stress how many others have bought the product, or try to paint a picture of your life when you are rich. Don’t bow to pressure to act immediately. If a money manager can’t easily explain his or her investment process, that’s a red flag.

Unsolicited offers. Spontaneous emails, message board postings, and company news releases should never be used as the sole basis for your investment decisions. Be especially careful if you receive an unsolicited pitch to invest in a company, or see it praised online, but can’t find current financial information from independent sources. Online and social marketing sites offer a wealth of opportunity for fraudsters.

Reciprocity. Fraudsters often try to lure investors through free investment seminars, gifts, and lunches. If you attend a similar event or find yourself similarly courted, remember there is never a reason to make a quick or unsubstantiated decision on an investment. Take the provided material home and research the opportunity and the individual. Always make sure the product is right for you, and that you understand what you are buying.

As a general rule, choose everyday investments that can be bought and sold through well-known brokerage firms or mutual fund companies. Make sure your statements come from the firm, not an individual money manager. Similarly, your checks should be made out to your brokerage firm, not to an individual or a company that your manager may control.

What Can I Do If I’ve Been Targeted?

If you have a question or concern about an investment, or you think you have encountered one of these frauds, contact the SEC, FINRA, or your state securities regulator to report the fraud and to get assistance.

If you have been a victim of a scam, you can also check the SEC’s website www.sec.gov/litigation.shtml for information about relevant federal actions and investor claims funds.

  • Report fraud to the FTC at ftc.gov/complaint or by calling 1-877-FTC-HELP.
  • File a complaint with the Senate Special Committee on Aging’s Fraud Hotline. Report the experience online or call (855) 303-9470.
  • File a complaint with the FBI’s Internet Crime Complaint Center.

Resources

FINRA Securities Helpline for Seniors

Consumer Financial Protection Bureau (CFPB)

Securities Investor Protection Corporation (SIPC)

Federal Reserve Consumer Help

Financial Industry Regulatory Authority (FINRA)

North American Securities Administrators Association (NASAA)

CFPB Ombudsman

SEC Types of Fraud

 SEC Seniors – Here you will find resources to help you understand some of the investment products often marketed to seniors and how to avoid investment fraud.

Investor.gov’s online search tool allows you to check the registration status and background of investment professionals.

Your state securities regulator can tell you whether an investment is registered and whether a professional and their firm are licensed to do business in your state. You can find out the name and contact details of your state securities regulator here.

Identity Theft and Healthcare Fraud

Identity theft and healthcare schemes stole almost $68M in 2017

What Is it?

This broad category includes all illegal efforts to obtain and misuse a person’s identifiable information. Of particular concern to seniors is Healthcare or Medicare fraud, where fraudsters will try to obtain an elderly person’s social security number (SSN) to defraud healthcare programs or personal accounts. High savings and good credit ratings make seniors a prime target for this kind of identity theft.

Other healthcare-related schemes may include offers for fake marketplace assistance, medications, supplements, and weight loss products, or the abuse of stolen health information. These scams are often initiated through robocalls, spam emails, internet advertisements, links in forums, and fraudulent websites.

Methodology

Identity thieves not only damage lives by draining bank accounts, issuing unauthorized credit card charges, and damaging credit reports, but they can also defraud the government and waste taxpayer dollars. Stolen information is often used to submit fraudulent billings to Medicare, apply to receive Social Security benefits, or illegally apply for jobs.

The growing use of online tax filing services has led to opportunities for thieves to commit fraud without stealing SSNs. In some cases, thieves can access an existing customer’s account simply by entering a username or e-mail address and correctly guessing the password. Whether the thief accesses an existing account or uses stolen information to create a new one, the end result is usually the same: the thief will file a false tax return using the victim’s identity and direct the refund to his own bank account.

Medical identity theft occurs when someone steals personal information – a name, SSN, or health insurance claim number (HICN) – to obtain medical care, buy prescription drugs, or submit fake billings. Claims for services obtained with stolen HICNs might be included in the victim’s billing history, and could prevent or delay them receiving legitimate care until the discrepancy is resolved.

Large-scale security lapses like the 2017 Equifax data breach, which exposed the private information of millions, represent a potentially devastating impact on older Americans. The release of this information makes it easier for criminals to find and target the elderly in identity theft schemes, presenting a unique risk to retirement savings, entitlement benefits, and credit scores.

Scammers have begun capitalizing on the breach through robocalls claiming to be from Equifax. These callers pretend they’re verifying account information to trick victims into sharing their Social Security numbers.

How Can I Protect Myself?

The U.S. Senate Special Committee released the following tips to help protect older Americans from healthcare and identity fraud:

  • Neither Medicare nor Social Security will call to ask for your bank information or SSN.
  • There will never be a fee charged to obtain a Social Security or Medicare card.
  • Never give out personal information over the phone to someone you do not know. Similarly, sensitive personal and financial documents should be kept secure at all times. Shred receipts, credit offers, account statements, and expired credit cards, to prevent “dumpster divers” from getting your personal information.
  • Always review medical bills to spot records of services that you didn’t receive.

What Can I Do If I’ve Been Targeted?

If you suspect you have been the victim of identity theft, make sure to complete the following steps:

Immediately:

  1. Close any new accounts opened in your name.
  2. Remove illegitimate charges from your accounts.
  3. Correct your credit report.
  4. Consider adding an extended fraud freeze.

Next Steps:

  1. Call the companies where you know the fraud occurred.
  2. Place a fraud alert with a credit reporting agency and get your credit report from one of the three national credit bureaus.
  3. Report identity (ID) theft to the Federal Trade Commission (FTC) online at IdentityTheft.gov or by phone at 1-877-438-4338.
  4. File a report with your local police department.

Additional identity theft reporting resources:

Place a scam alert with one of the three national credit bureaus:

Equifax: 1-800-685-1111 (Fraud Hotline: 1-888-766-0008)

Experian: 1-888-397-3742 (Fraud Hotline: 1-888-397-3742)

TransUnion: 1-800-916-8800 (Fraud Hotline: 1-800-680-7289)

File a report of theft or fraudulent use of Social Security number with the Social Security Authority. You can also contact your local Social Security field office to place a freeze on any changes to your Social Security account to prevent future misuse of your benefits.

If you suspect you have been a victim of Medicare fraud, there are a number of routes to take:

If possible, have this information ready before you report fraud:

  • The provider’s name and any identifying number you may have
  • The service or item you’re questioning
  • The date the service or item was supposedly given or delivered
  • The payment amount approved and paid by Medicare
  • The date on your MSN
  • Your name and Medicare Number
  • The reason you think Medicare shouldn’t have paid
  • Any other information you have showing why Medicare shouldn’t have paid for a service or item

 

  • Report fraud to the FTC at ftc.gov/complaint or by calling 1-877-FTC-HELP.
  • File a complaint with the Senate Special Committee on Aging’s Fraud Hotline. Report the experience online or call (855) 303-9470.
  • File a complaint with the FBI’s Internet Crime Complaint Center.

Resources

FTC Disputing Errors on Credit Reports

FTC Extended Fraud Alerts and Credit Freezes

USA.gov Identity Theft

FTC Identity Theft Recovery Steps

FTC Recovery Plan

Medicare.gov State/Local Resources

Medicare Ombudsman’s Office

Medicare Rights Center

Risk Factors: Preventing Elder Fraud

Several lifestyle factors greatly heighten the risk of an older person falling prey to fraud and financial exploitation. Whether it’s for yourself or a loved one, knowing the risk factors can help prevent these distressing crimes from happening.

Isolation. Often retired, less mobile, and at home, scam artists can troll for senior victims by calling or stopping by at quiet times of the day. As families and loved ones move away, seniors may have little or no interaction with those close to them, and no one to help review large decisions. This isolation, loneliness, and limited interaction can make an older person vulnerable to the affected charms and friendliness of a cold caller, who often work to forge a sense of trust and understanding with their victims.

Most elderly Americans rely on relatives and friends for social contact. If you care for someone who may be retired or live alone, make sure to pick up the phone, or get the family together to organise a rota to stay in touch. If you struggle to cope with long distances, consider employing a carer to come into your loved one’s home to help with chores, provide practical support, and offer a listening ear and a little company. People struggling often downplay their problems, and a carer may spot any warning signs early.

Group activities can be particularly useful in helping older people out of loneliness and isolation. Check out local day care centres that offer activities, support and socialisation. Local websites are great places to find clubs and societies to explore hobbies, keep active, and meet like-minded people.

Being unable to travel easily is a big contributor to social isolation, especially in rural areas. Offering lifts to loved ones, researching bus timetables and helping them access public transport can help. Alternatively try and find a friendly local minicab to help them stay socially active and independent.

Sickness. Chronic health issues mean that many older adults have difficulty maintaining their property. Seniors are much more likely to rely on outside sources for help, and scam artists know this. Unscrupulous workers can defraud seniors out of thousands of dollars for a job that should only cost hundreds. Dementia and mental infirmity can exacerbate these problems.

Assets. Money is one of the most significant reasons for senior vulnerability. Scammers see them as easy targets with a large supply of wealth that includes property, life savings, good credit scores, and other assets. If you care for a vulnerable senior, don’t avoid the topic. Broach the subject to ensure their finances are being managed in the best way possible.

Consequences

Seniors that have been victimized by crime or feel threatened by scammers can suffer repercussions and harbour emotional distress that extends far beyond the crime’s financial impact. If you or a loved one have been affected by fraudulent practices, consider seeking guidance on the following issues which may otherwise go unspoken.

Physical and emotional impact. Older victims of exploitation are likely to take a while to recover. You might feel ashamed, anxious, or embarrassed, which can take its toll if left unchecked. Make sure to talk to someone about your experience; these feelings can often have a physical impact and lead to illness, or worse.

Financial impact. With no fixed income, the loss of financial security from a scam or fraudulent investment can have irreversible effects on the lives of the elderly. Aside from the pain of losing a lifetime’s savings, it’s often extremely difficult to recuperate financially, and an older person may have to make permanent changes to their living situation and lifestyle.

Diminished quality of life. The inability to recover, mistrust of others, worry about repeating the same mistake, and regret at the consequences of a poor decision may drive victims to become reclusive, distressed, and suffer from poor self-confidence.

Vicarious victimization. The National Center on Elder Abuse has identified a phenomenon called “vicarious victimization”. This refers to an elderly person who has has not yet been a victim, but becomes obsessively fearful of becoming one. They may alter their lifestyle by withdrawing from society, abandoning friends, communities, and hobbies. Their view of the world may become warped – a common symptom of the isolated and homebound.

Resources

NCOA Nationally Accredited Senior Centers

Aging Care: Loneliness in the Elderly

Caregiver List: Choosing a Home Care Agency

 Senior Network Services: Money Management

Red Flags: Recognizing Elder Fraud

Sometimes the effects of fraud can be painfully obvious: an empty bank account, a lost check, a slew of debt. In other cases, the fraud can be drawn out, with small amounts siphoned off over time. These cases are harder to detect, and can rack up huge losses. If you’re vigilant, you may be able to spot the signs of elder financial fraud happening to yourself or someone you love.

A Friend or Relative

If you’re not in frequent contact with the victim, elder fraud can be very difficult to detect. As a caregiver or family member, you may be able to spot some tell-tale signs that things may not be normal. These may include:

  • A change personal behaviour and daily habits that may indicate distress or financial loss. People who know they have been tricked may be too ashamed to admit it. Look out for a sudden loss in self confidence or a move to a worrisome, reclusive, or more austere lifestyle.
  • If you have knowledge of their banking habits, you may find unpaid bills or unusual signatures on returned cheques.
  • Caregivers or others close to the victim that appear to have a lifestyle above what you may expect to be affordable can be a red flag. They may be frugal, or they may be supplementing their income in other ways.
  • Outright complaints from the victim that they are missing money. It’s entirely possible that the victim knows something is amiss, but can’t figure out how it’s happening. Others who may be confused or operating at diminished mental capacity may not know they’ve been scammed at all.

Yourself

  • Review your credit card and bank statements at least monthly. Track down any unexplained charges and report them to the bank; even very small charges should be accounted for. When credit card details are stolen, it is common for the thieves to put through a small initial charge to ensure the card is still valid.
  • Many credit card companies and some banks will allow you to set up activity alerts. This will let you keep track of banking activity closer to ‘real time’ rather than waiting for monthly statements.
  • Credit monitoring companies are required to provide free credit reports at least annually. Take advantage of this service and review your reports to check for accounts that you didn’t open. You can review your credit report monthly for free at Credit Karma or Annual Credit Report.

Resources

Use the verified resources below to find further information on identifying and reporting elder fraud.

General Resources

AARP Fraud Watch Network

AARP Report Fraud

AARP Elder Watch

Better Business Bureau Scam Tips

National Coalition on Aging Resources

Eldercare Locator

Equifax

Experian

Financial Industry Regulatory Authority (FINRA) Complaints

FINRA File a Tip

FINRA State Securities Regulators

Annual Credit Report

National Association of Insurance Commissioners

National Association of Attorneys General

North American Securities Administrators Association

TransUnion

American Society on Aging

Do-Not-Call Registry

National Do-Not-Call Complaint Form

AARP Fraud Fighter Call Center

Assist Guide Information Services – Government Agency/Programs by State

InfoSec Institute

National Center for Victims of Crime

FINRA Securities Helpline for Seniors

Center for Elder Rights Advocacy

National Adult Protection Services Association

Federal Government Websites

United States Senate Special Committee on Aging 2018 Fraud Book

FBI 2017 Internet Crime Report

DOJ Elder Justice Initiative

Internal Revenue Service (IRS)

Federal Trade Commission (FTC) Consumer Response Center

FBI Common Fraud Schemes

Administration on Aging

Social Security Administration

Medicaid

Consumer Financial Protection Bureau

FTC Do Not Call Registry

FBI Internet Crime Complaint Center (IC3)

U.S. Postal Service Office of Inspector General

U.S. Securities and Exchange Commission

U.S. Treasury Inspector General for Tax Administration

USA.gov for Seniors

US Senator/Rep. Office for Constituent Casework

Federal Trade Commission Sentinel Network

Federal Communications Commission

State/Local Consumer Protection Agencies

Area Agency on Aging

IRS Scam Reporting Hotline

U.S. Department of Health & Human Services Office of Inspector General

Sources

FTC International Lottery Scams | Protect Kent Seniors | U.S. Senate Special Committee on Aging | FBI 2017 Internet Crime Report | SEC Avoid Investment Fraud | My Retirement Paycheck | FTC Tech Support Scams | FBI Romance Scams | FTC International Lottery Scams | Better Business Bureau IRS Impersonation Scam | IRS Tax Scams 2016 | National Consumers League Government Grant Scams | AARP Lottery Scams | FTC Identity Theft Recovery Steps

Data

2017 Victims by Age Group

Age Range Total Victim Count Total Victim Loss
Under 20 9,023 $8,271,311
20-29 41,132 $67,981,630
30-39 45,458 $156,287,698
40-49 44,878 $244,561,364
50-59 43,764 $275,621,946
Over 60 49,523 $342,531,972

Top 10 States by Victim Count

State Victim Count
California 41,974
Florida 21,887
Texas 21,852
New York 17,662
Pennsylvania 11,348
Virginia 9,436
Illinois 9,381
Ohio 8,157
Colorado 7,909
New Jersey 7,657

Top 10 States by Victim Loss

State Victim Loss
California $212.4M
Texas $115.7M
Florida $110.6M
New York $88.6M
Arizona $59.4M
Washington $43M
Illinois $42.9M
New Jersey $40.4M
Colorado $39.9M
Massachusetts $39M

Overall State Statistics 2017

State Victim Count Victim Loss Top Reported Scams by State
California 41,974 $214,217,307 1. IRS Impersonation
2. Elder Financial Abuse
3. Romance Scams
4. Unsolicited Phone Calls
5. “Can You Hear Me?” Scam
Florida 21,887 $110,620,330 1. IRS Impersonation
2. Romance Scams
3. Unsolicited Phone Calls
4. Elder Financial Abuse
5. Grandparent Scams
Texas 21,852 $115,680,902 1. IRS Impersonation
2. Romance Scams
3. Grandparent Scams
4. Tech Support Scams
5. Government Grant Scams
New York 17,622 $88,633,788 1. IRS Impersonation
2. Unsolicited Phone Calls
3. Tech Support Scams
4. Grandparent Scams
5. “Can You Hear Me?” Scam
Pennsylvania 11,348 $36,319,408 1. IRS Impersonation
2. Unsolicited Phone Calls
3. Wire Fraud
4. Elder Financial Abuse
5. Tech Support Scams
Virginia 9,436 $35,438,537 1. Grandparent Scams
2. Unsolicited Phone Calls
3. Tech Support Scams
4. Elder Financial Abuse
5. IRS Impersonation
Illinois 9,381 $42,894,106 1. IRS Impersonation
2. Elder Financial Abuse
3. Unsolicited Phone Calls
4. Government Grant Scams
5. Grandparent Scams
Ohio 8,157 $30,672,149 1. IRS Impersonation
2. Grandparent Scams
3. Counterfeit Check
4. Unsolicited Phone Calls
5. Tech Support Scams
Colorado 7,909 $39,935,041 1. IRS Impersonation
2. Tech Support Scams
3. Romance Scams
4. “Can You Hear Me?” Scam
5. Debt Collection Scams
New Jersey 7,657 $40,441,739 1. IRS Impersonation
2. Grandparent Scams
3. Tech Support Scams
4. Unsolicited Phone Calls
5. Government Grant Scams
Washington 7,505 $42,991,213 1. IRS Impersonation
2. Unsolicited Phone Calls
3. Grandparent Scams
4. Romance Scams
5. Investment Fraud
North Carolina 7,316 $22,203,108 1. Romance Scams
2. IRS Impersonation
3. Grandparent Scams
4. Elder Financial Abuse
5. Identity Theft
Georgia 7,007 $38,353,746 1. Elder Financial Abuse
2. IRS Impersonation
3. Romance Scams
4. Tech Support Scams
5. Unsolicited Phone Calls
Maryland 6,789 $30,045,488 1. IRS Impersonation
2. Tech Support Scams
3. Impending Law Suit Scams
4. Health-Related Scams
5. Unsolicited Phone Calls
Arizona 6,417 $59,366,635 1. IRS Impersonation
2. Grandparent Scams
3. Romance Scams
4. Unsolicited Phone Calls
5. “Can You Hear Me?” Scam
Michigan 6,400 $25,362,646 1. IRS Impersonation
2. Tech Support Scams
3. Romance Scams
4. Unsolicited Phone Calls
5. “Can You Hear Me?” Scam
Wisconsin 5,245 $15,787,242 1. IRS Impersonation
2. Grandparent Scams
3. Elder Financial Abuse
4. Identity Theft
Massachusetts 5,221 $38,962,867 1. Tech Support Scams
2. IRS Impersonation
3. Romance Scams
4. Unsolicited Phone Calls
5. Grandparent Scams
Tennessee 4,779 $13,561,295 1. IRS Impersonation
2. Grandparent Scams
3. Identity Theft
4. Investment Fraud
5. Unsolicited Phone Calls
Nevada 4,675 $19,578,132 1. IRS Impersonation
2. Government Grant Scams
3. Debt Collection Scam
4. IRS Fraudulent Tax Returns
5. Investment Fraud
Missouri 4,187 $19,475,647 1. IRS Impersonation
2. Identity Theft
3. Grandparent Scams
4. Government Grant Scams
Indiana 4,067 $13,228,744 1. Unsolicited Phone Calls
2. Grandparent Scams
3. Tech Support Scams
4. Impending Lawsuit Scams
5. Social Security Fraud
Alabama 3,865 $9,949,873 1. IRS Impersonation
2. Unsolicited Phone Calls
3. Grandparent Scams
4. Romance Scams
5. Identity Theft
South Carolina 3,687 $13,048,133 1. IRS Impersonation
2. Romance Scams
3. Identity Theft
4. Grandparent Scams
5. Elder Financial Abuse
Minnesota 3,619 $19,126,165 1. IRS Impersonation
2. Romance Scams
3. Unsolicited Phone Calls
4. Counterfeit Check
5. Timeshare Scams
Oregon 3,455 $11,165,342 1. Elder Financial Abuse
2. Impending Lawsuit Scams
3. Unsolicited Phone Calls
4. Identity Theft
5. Tech Support Scams
Louisiana 3,319 $10,696,284 1. IRS Impersonation
2. Romance Scams
3. “Can You Hear Me?” Scam
4. Elder Financial Abuse
Oklahoma 2,809 $11,671,198 1. Grandparent Scams
2. IRS Impersonation
3. Unsolicited Phone Calls
4. Elder Financial Abuse
5. Romance Scams
Kentucky 2,740 $7,220,340 1. IRS Impersonation
2. Tech Support Scams
3. Romance Scams
Connecticut 2,662 $12,465,243 1. Grandparent Scams
2. IRS Impersonation
3. Tech Support Scams
4. Romance Scams
5. Timeshare Scams
Utah 2,260 $10,302,892 1. IRS Impersonation
2. Grandparent Scams
3. Unsolicited Phone Calls
4. “Can You Hear Me?” Scam
5. Timeshare Scams
Hawaii 1,923 $3,368,323 1. IRS Impersonation
2. Government Grant Scams
Mississippi 1,799 $6,786,910 1. IRS Impersonation
2. Grandparent Scams
3. Elder Financial Abuse
Kansas 1,767 $5,045,755 1. Romance Scams
2. Mortgage Fraud
Arkansas 1,753 $4,823,489 1. IRS Impersonation
2. Romance Scams
3. Impending Lawsuit Scams
4. IRS Fraudulent Tax Returns
Iowa 1,533 $4,013,395 1. Unsolicited Phone Calls
2. Identity Theft
3. Inheritance Scams
Alaska 1,418 $1,709,126 1. IRS Impersonation
2. Grandparent Scams
New Mexico 1,415 $4,716,033 1. Tech Support Scams
Idaho 1,186 $7,657,726 1. Identity Theft
2. IRS Impersonation
3. Romance Scams
District of Columbia 1,143 $2,707,684
Nebraska 1,140 $4,286,773 1. Elder Financial Abuse
2. Legal Referral
New Hampshire 1,106 $3,725,739 1. Unsolicited Phone Calls
2. Debt Collection Scams
West Virginia 1,085 $2,435,608 1. IRS Impersonation
2. Elder Financial Abuse
3. Robbery/Theft
Delaware 759 $2,376,718 1. IRS Impersonation
Maine 740 $1,310,506 1. IRS Impersonation
2. “Can You Hear Me?” Scam
3. Unsolicited Phone Calls
4. Grandparent Scams
5. Tech Support Scams
Montana 737 $2,553,804 1. IRS Impersonation
Rhode Island 704 $3,390,078 1. IRS Impersonation
2. Unsolicited Phone Calls
3. Romance Scams
4. Grandparent Scams
5. IRS Fraudulent Tax Returns
Puerto Rico 605 $1,590,979
Vermont 451 $1,291,941 1. IRS Impersonation
Wyoming 434 $2,331,692 1. IRS Impersonation
South Dakota 404 $2,474,062 1. Grandparent Scams
2. Unsolicited Phone Calls
North Dakota 355 $2,006,821 1. Unsolicited Phone Calls
Guam 66 $819,163
U.S. Minor Outlying Islands 51 $61,445
U.S. Virgin Islands 48 $625,169
American Samoa 17 $2,200
Northern Marina Islands 13 $21,320