Scams are an unfortunate reality of life. Scams and scammers have always been around, but in our digital age they have become more widespread. Scammers can now cast a vast net, looking for victims across the world. The availability of artificial intelligence tools has made scams much more sophisticated and insidious.
Older adults are particularly attractive targets for scammers because many have significant financial resources and were raised to be polite and trusting, and many are socially isolated. People aged 60 and over lose more than $36 billion to financial fraud each year, according to the Better Business Bureau. Many older adults also are not tech-savvy, so they may not be as wary of the threats posed by technology.
But anyone can be a target. Even doctors and investment brokers with decades of experience have fallen victim to financial scams. Large corporations have also been deceived by cybercriminals using AI tools.
Scams are a huge issue for older adults. One scam can derail even the best-laid retirement financial plan. Scammers are trained to spot and exploit likely targets, and even the savviest individual can unwittingly become a victim. That’s why we devote an entire section of this website to detailing common scams and helping you avoid being scammed.
Here’s a news story about a lady who lost her life savings to a scam.
Scams often are unreported, or the perpetrators are difficult to find and prosecute, so the perpetrators consider them a “low-risk” crime. But the results can leave the victims financially and emotionally devastated, with little time to recoup their losses.
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Myths and Facts About Scams
Below are a few myths and facts about scams:
MYTH: I don’t have many financial assets, so I’m not a target for scammers.
FACT: It’s not just the wealthy who are victimized – people in all economic groups are targeted. Many scams go unreported, so a reported loss of just $20 to a scam means the actual losses may be much greater.
MYTH: The victims of scams are mainly those who suffer from memory loss, dementia, Alzheimer’s, and social isolation.
FACT: These are indeed some factors that make people vulnerable to scams. However, those who are well-educated, financially experienced, and highly social can also be victims. They tend to meet more people and be more confident in their knowledge and abilities, making them better targets for professional scammers. Even celebrities and high-profile executives have been victims of scams.
MYTH: Scams are mostly perpetrated by strangers, often operating overseas.
FACT: The vast majority of scams result from “trust abuse”, where a relative or caregiver takes advantage of their position of trust to scam the victim. In fact, in over 90% of all reported instances, the scammers are the victim’s own family members, most often their grown children, followed by grandchildren, nieces and nephews, and others.
In this video, the narrator describes a few common scams against older adults and shares his own story about being scammed.
Ten Common Scams
Here are ten of the most common scams perpetrated against older adults:
- Financial investment scam: An unscrupulous salesperson convinces a victim to invest in a risky or outright fraudulent venture, often employing high-pressure sales tactics such as “this is a once-in-a-lifetime opportunity” or “get it before it’s gone”.
- Charity scam: An unscrupulous charity takes advantage of current national or international crises to request donations. The scammer often relies on memory loss to ask for donations repeatedly from the same victim.
- Sweepstakes scam: A scammer says the victim has won a huge prize but must send some money in order to claim it. In another version, the scammer claims to have won a prize and offers to share it with the victim but asks for some money to cover “shipping and handling.”
- Obituary scam: A scammer scours through obituaries in the newspaper and attempts to collect nonexistent debts from the survivors of the deceased.
- Magazine scam: A magazine publisher sends free issues and then claims the victim owes money for the subscription.
- Medicare scam: A scammer poses as a Medicare or financial representative to obtain a victim’s private information. Or the scammer will provide a simple medical check at a fake clinic and bill Medicare for the service.
- Shopping scam: A scammer will advertise a product at a low price but later add hidden fees and charges. In an even more insidious version, a scammer will send a counterfeit health product or prescription drug in place of the actual product. The counterfeit product may be useless or even outright dangerous.
- Sweetheart scam: A scammer “befriends” a victim in order to scam them.
- Internet scam: A scammer attempts to obtain someone’s personal information or access their computer using malicious software or fraudulent email.
- Grandparent scam: a scammer poses as the victim’s child or grandchild in order to get the victim to send money.
Social Media Helps Scammers
Facebook, LinkedIn, Instagram, and other popular social media sites make things much easier for scammers. Scammers now have easy access to many people’s personal information to make their scams appear more credible. Even the head of the British intelligence agency MI6 once had his cover blown by information his wife posted on Facebook.
Using data they collect about you from various fan pages, scammers can pretend to be familiar to you in order to gain your trust. Or they join online interest groups and networks, such as school alumni groups. Then they pose as legitimate members of those groups in order to gain members’ trust. Once they establish a relationship with you, they can attempt a variety of scams.
Commonly, they use their relationship with you to promote dubious investment offers. This is affinity fraud. Or they could even try to trick you into revealing your personal or financial information to them or sending them money.
How to Avoid Becoming a Victim
Here are some tips to avoid becoming a victim of a scam:
- Never give out personal information over the phone unless you initiated the call. Never post or send sensitive personal information online or by email. Government agencies such as the Social Security Administration, IRS, or Medicare will never call or email you to ask for personal information.
- Be careful of what you post on public social media and other websites, knowing that this information is potentially available to scammers.
- If you receive an unsolicited message online from someone pretending to be familiar with you, verify the source. Ask others if they’re familiar with that person. Be particularly suspicious of accounts that are new and have little previous activity.
- Take your time and do your due diligence before sending money to anyone. Make sure the investment, charity, or person on the other end of the phone is legitimate. Don’t fall for high-pressure tactics or emotional appeals.
- Consult a relative or friend you trust if you’re unsure about a call or offer you received.
- Only do business with and purchase products from reputable commercial companies. You can visit the Better Business Bureau to check out a company you’re unsure about. Beware of cut-rate and low-priced products or services. Consult your doctor or pharmacist if a drug or health product you’ve purchased looks suspicious.
Visit the FBI’s fraud page for more tips on protecting yourself from fraud.
The SEC’s webpage has information about protecting against affinity fraud.
This scam meter helps you determine whether an investment offer you’re considering is likely to be a scam.
This risk meter can help you determine whether you have characteristics and behaviors that make you likely to become a fraud victim.
If You’ve Been a Victim
If you, or someone you’re caring for, have been a victim of a scam, don’t be afraid or ashamed to report it. The scammers are depending on your silence to continue perpetrating their crimes. You may be able to recover some of your lost property, and your action may help prevent others from being victimized.
You can report digital scams to the FBI at their Internet Crime Complaint Center.
Resources
Scam and Fraud Prevention from the National Council on Aging
Norton’s ID Theft Prevention page
Fraud Prevention Tips Everybody Should Know (But Doesn’t)
11 Ways to Prevent Identity Theft While Traveling