Financial fraud and scams targeting older adults are on the rise. Preventing these fraud schemes starts with knowing how they work and what to look out for.
The woman on the screen said she lived in Poland, worked for the United Nations, and had just received a huge inheritance, but she was having issues with her bank. She needed to move the money into the account of a man she was romantically involved with online. But none of this was true. She was a scammer targeting a customer’s bank account. Luckily, a Wells Fargo employee reached out to educate the man about such financial scams before he lost any money.
These fraud attempts targeting older Americans are on the rise because perpetrators know they can catch isolated or unaware older adults and other customers who may get caught up in the moment and not spot the red flags.
“With these scams, there’s a combination of pulling heartstrings, danger, and urgency. Everything operates in extremes when it comes to fraud,” said Andy Collins, a principal business consultant with Wells Fargo’s Consumer and Small Business Banking’s Fraud & Claims Management department. “The bad guys try to find that vulnerable individual who will send money.”
But when it comes to preventing scams, knowledge is power. Staying on top of the latest fraud schemes is one of the best ways of avoiding losing money to them.
“In my research, I discovered that when a consumer has existing knowledge about a particular scam, they are 60-80% less likely to respond when they are targeted,” says Dr. Marti DeLiema, a gerontology consultant with Wells Fargo’s Aging Client Services team and an assistant professor at the University of Minnesota’s School of Social Work.
Here are three common financial scams targeting older adults and how they work.
Countless customers rely on tech support to use their latest gadgets, but scammers often pose as helpful customer service experts with knowledge of an unknown or nonexistent problem to gain access to sensitive information.
That’s one reason why this is the most reported scam, with more than 13,900 cases reported to the FBI in 2021 alone, according to the 2021 FBI Elder Fraud Report.
This scam may involve calls from organized criminal call centers, known as “fraud farms,” or businesses that employ fraudsters to dial up consumers with the intent of launching scam attacks, sometimes from thousands of miles away.
“This is concerning and speaks to an underlying increase in the prevalence of technology-facilitated scams, the majority of which originate from overseas and target North American consumers,” DeLiema said.
Romance con artists
The same technology that we use to connect with romantic partners can also connect us with scammers. Romance fraudsters often appear exactly like typical social and dating site users, but instead of being interested in you, they’re only in it for your money.
With the rise of online dating and social applications, these scams are becoming surprisingly frequent, and they’re often the most severe. Romance and family member imposter scams led to more than $432 million in losses in 2021, according to the FBI’s Internet Crime Complaint Center. One in three people have known somebody who has fallen for one, according to a 2022 Wells Fargo survey.
The same survey indicated that older men may be disproportionately vulnerable, as they report being more willing to engage in risky behaviors around dating. For example, about three in four men age 65 and older say they wouldn’t check someone’s background, compared to 39% of women.
Family and friend imposter scams
Other scammers are leveraging the close ties between older customers and their families to get them to send money. These scams involve fraudsters acting as grandchildren or other loved ones who need money quickly to get out of a crisis.
While they may have collected some personal information to make these stories believable, scammers depend on their target not thinking through the situation.
“Scammers rely heavily on a victim being secretive about money movement or providing false information about the reasons for a transaction. The fraud quickly falls apart when you and your family fully disclose the financial request,” said Ron Long, head of Aging Client Services at Wells Fargo.
This and the other scams aren’t unique to older adults, but older customers are more often targeted by criminals because they’re perceived as more vulnerable and less likely to report fraud. They may also face age-related declines in financial decision-making, social isolation, or disability that can make them more at risk.
“Fraud criminals know how to deceive a person by making them feel special and important,” DeLiema said. “When we don’t have a strong sense of purpose to begin with, those messages from scammers are more persuasive.”
3 tips for thwarting scams
1. Keep an open dialogue
Anyone who is unsure if they’ve been targeted by a scam should talk about it with a trusted family member or loved one. Often, a discussion will make it evident that the fraudster’s logic or story doesn’t make sense.
But it also pays to discuss fraud before it happens. Families should share information about such schemes.
“One of the key things we find that can frustrate scammers is a family that has talked about the threat of financial fraud,” Long said. “For example, a family password is a perfect defense against scammers posing as a grandchild or other family member.”
2. Get another review of your finances
Giving a trusted family member view-only access to a bank account or duplicate bank statements is one way financial institutions and their customers can work together to prevent scams.
“This way you can have a second set of eyes looking for potentially concerning financial activity,” Long said.
Look out for common signs of scams, including unusual financial activity, family mentioning unknown friends or contacts, and unforeseen changes to bank accounts or estate plans.
3. Stay informed about the latest scams
Scam prevention starts with learning what to look out for.
With a little education, you and your loved ones will be ready to hang up the phone, delete the email, or simply move on when a scammer reaches out with their phony emergency, romantic story, or tech demands.
“That’s why we are focused on helping keep our customers safe and get them out of these scams whenever possible,” Collins said.
Source: Wells Fargo