Fraud On the Elderly
Fraud often takes place where weakness exists as fraudsters search for weaknesses. In the elderly population, we want to know what conditions fraudsters exploit and the kind of schemes they use.
According to the Stanford Center on Longevity, people of ages 65 years and older were more likely to have been a victim of a financial fraud than people in their 40s. The study focused on how positive and negative emotions triggered by fraudsters on seniors played a role in decision making. The study found that inducing positive emotions (such as excitement) or negative ones (such as anger) make seniors 65 years and older more susceptible to fall for a scam than a younger age group of 30 to 40 years.
The tactics used by fraudsters to trigger emotions occur with messages such as “You want to leave a legacy for your kids, don’t you?”, “Act now—this great opportunity won’t be available tomorrow”, or “This opportunity is only offered to an exclusive group”. Seniors tend to be targeted because criminals often perceive them as lonely, trusting, and having savings. It is estimated that more than 63% of victims ages 55 years and over do not report or admit having been a victim of fraud. Unfortunately, children and grandchildren of seniors may be the scammers.
According to the National Council on Aging (NCOA), the top ten schemes used by fraudsters on the elderly are:
- Medicare: Fraudsters get someone’s Medicare information by posing as a Medicare representative and then bill Medicare for scam services, pocketing the money.
- Counterfeit prescription drugs: Seniors look for lower drug prices on the internet, but fraudsters sell fake medications that do not treat patient conditions or may be harmful.
- Funeral and cemetery scams: One scheme is when fraudsters read obituaries and call or attend the funeral to take advantage of grieving family members by claiming the deceased had an outstanding debt. Another scheme is a dishonest funeral home that charges higher prices or unnecessary services.
- Anti-aging products: Scammers advertise fake products such as counterfeit Botox to make seniors look or feel younger.
- Telemarketing or telephone calls: Phone calls from fake or dodgy charities soliciting money.
- Internet: Seniors are tricked into buying costly fake antivirus software when a pop-up window tells them they have been infected by a computer virus. Scams also include phishing emails to steal information about a victim’s bank or credit card through a counterfeit website that appear real.
- Investments: Seniors looking to invest their savings and retirement funds, find themselves targets of Ponzi schemes or another financial scheme promising high investment returns with little or no risk.
- Homeowner and reverse mortgages: Scammers pressure seniors to get a reverse mortgage or other access to their home equity. Seniors should be skeptical of those who ask for fees when trying to access their home equity.
- Sweepstakes and lottery scams: This is a simple scam where a fraudster contacts a person saying they won a lottery or sweepstake but the victim first needs to pay a processing fee to get the prize. The fraudster may actually issue a check for the prize money but it bounces after the victim has paid the fee.
- The grandparent scam: The scammer contacts a senior by email pretending to be a grandchild going through financial difficulty or other problem and asks the victim to send money using Western Union or MoneyGram. In addition, the fraudster asks the grandparent not to tell anyone about their situation.
In addition to the scams listed above, other scams exist. The romance scam is perpetrated on a lonely senior. The scammer seemingly gives the senior their interest and affection. Then the perpetrator pulls the scam after gaining the victim's trust. This kind of scam is seen in South Florida, which has a relatively high senior population with wealth.
Some romance scam examples that might take place when trust is gained are:
- Scammers fabricate a crisis in their family and ask the victim for a loan never to be paid back.
- Scammers will ask the victim to buy them jewelry, clothing, cars, and so on.
- Scammers move in with the elderly victim and start gaining control over the senior’s assets.
Advice to prevent fraud on elders includes:
- Delay important decisions when going through strong emotions
- Talk to people you trust and seek their advice
- Confirm that an emergency situation actually exists
- Reach out to authorities or trusted people if you suspect being a victim of fraud
- Call Adult Protective Services in your area
Kircanski, K., Notthoff, N., Dahdel, D., Mottola, G., Cartensen, L. L., & Gotlib, I. H. (2016). Heightened Emotional States Increase Susceptibility to Fraud in Older Adults. Stanford Center on Longevity, Financial Fraud Research Center. Retrieved on November 1, 2018, from http://184.108.40.206/~longevl0/wp-content/uploads/2017/01/FraudStudy_IssueBrief_4-19-16-.pdf
Vernon, S. (2016, May 19). Seniors, don’t fall for this dangerous fraudster trick. CBS News Money Watch. Retrieved November 1, 2018, from https://www.cbsnews.com/news/seniors-dont-fall-for-this-dangerous-fraudster-trick/
 Deevy, M., Beals, M. (2013). The Scope of the Problem: An overview of Fraud Prevalence Measurement (p.32). Stanford Center for Longevity, Financial Fraud Research Center. Retrieved on November 8, 2018, from http://220.127.116.11/~longevl0/wp-content/uploads/2016/07/Scope-of-the-Problem-FINAL_corrected2.pdf
 National Council on Aging (NCOA) website. Top 10 Financial Scams Targeting Seniors. Retrieved November 1, 2018, from https://www.ncoa.org/economic-security/money-management/scams-security/top-10-scams-targeting-seniors/