Scams targeting seniors are on the rise at an alarming rate. With many older adults enjoying a more stable financial situation, they are increasingly seen as attractive targets for fraudsters.
According to the FBI, in 2023, individuals aged sixty and older lost $33,915 to scams targeting seniors, and the total losses reached a whopping $3.4 billion. Knowing and understanding the different scams is essential to preventing losses. Here is a list of twelve scams targeting seniors.
Investment Scams
Investment scams are one of the most common types of scams targeting seniors. Seniors have lost nearly $1.2 billion in investment scams. They include everything from stock market manipulation to Ponzi schemes, pyramid schemes, and cryptocurrency scams.
The scammers exploit seniors who want to make some money, prey on their technological vulnerability, and steal their funds.
Medicare Fraud
In Medicare scams, criminals impersonate Medicare members, steal people’s identities, and obtain healthcare services and supplies. Scammers contact their victims by phone, email, text, and post and lure them with free services.
Each year, $100 billion is lost due to Medicare fraud. Additionally, scammers can use seniors’ data obtained from Medicare fraud for other fraudulent activities.
Tech Support Scams
The FBI warned that technical Support Scams targeting seniors have seen an uptick. Scammers pose as representatives from well-known companies, claiming there has been fraudulent activity or an accidental money transfer. They convince victims to download software to “refund” the money, which gives the scammers access to the victim’s computer and accounts. Once access is gained, the scammers can withdraw or transfer funds from the victim’s account. Seniors are often targeted because they trust easily and are usually more financially secure.
Sweetheart Scams
In this scam, scammers use fake profiles to ensnare seniors in romantic relationships and then use the victims’ feelings for them to swindle money. The scams mostly take place on dating apps like Tinder and social media platforms like Facebook, where many seniors are active. According to the Federal Trade Commission, the highest losses reported by seniors aged seventy and above were $9475 to sweetheart scams.
Sweepstakes scams
Sweepstakes are promotional contests where participants enter to win prizes, often requiring no purchase. These contests are easy targets for scammers who frequently exploit this concept by falsely claiming that individuals have won a prize, only to request personal information or payment to claim it. The scammers tell seniors they have won the prize and to transfer some money to cover the taxes via wire transfer or gift cards, making them untraceable.
Seniors lost over $108 million to Sweepstakes scams in 2021.
Phantom Hacker Scam
The Phantom hacker scam is an upgrade to the technical support scam; here, scammers impersonating a big company representative ask victims to install software, and then they contact the victims as a representative of their bank and say that their accounts have been hacked. The scammers then direct them to a US government entity and, finally, posing as a US government employee, send them an official email or letter to legitimize the scam, ensuring the victims don’t go to law enforcement.
According to the FBI, Americans lost over $542 million to this scam, and 50% of the victims were seniors.
The Pigeon Drop
In the pigeon drop scam, scammers plant cash or other valuable items for victims to find and then convince the victims to offer some cash as collateral to split the cash or item between them. Seniors are usually targeted in this scam because of their lack of awareness about such scams. Seniors have lost $2000- $3000 or more to this scam.
Cryptocurrency Scams
Cryptocurrency Scams targeting seniors usually start with scammers directly contacting the victim via phone or email, claiming problems in the victim’s bank account, and asking the victim to make a crypto payment to solve the problem. In some cases, these scams involve ads on social media platforms about high returns on investments in cryptocurrency, and once the seniors invest the money, they disappear.
Cryptocurrency is untraceable; it has no physical existence, which is why scammers use it to cheat people. According to the FBI, $1.1 billion was lost in this scam, and 64% of the money lost was that of seniors over 60.
IRS Scam
IRS scam is a common scam targeting seniors in the US. Scammers pose as IRS agents and contact the victim by phone or email. They then make different claims like the victims have received a tax return or, in some cases, claim that the victim has outstanding debt they must pay and even threaten the victim with arrest, deportation, or license suspension. Scammers ask the victims to pay a fee in case of tax return or install software to claim the return, and in case of repayment, they ask the victim to repay the money owed via cryptocurrency.
Funeral Scams
There are different types of funeral scams targeting seniors, especially widows and widowers. In the first type, the scammer attends the funeral of a stranger, claims the deceased owes them a debt, and tries to extort money from the grieving family. In some cases, the scammer contacts the deceased’s immediate family after the funeral and claims that the deceased has ordered something expensive, and they need to make the payment as it is nonrefundable. Another type of scam is when fraudulent funeral homes misappropriate the funds of the victims who have prepaid their funerals. Victims have lost more than $450 million in this scam.
The Grandparent Scam
There are different types of grandparent scams, but they all have one thing in common: the scammers prey on grandparents’ love for their grandchildren. In the first type, scammers call the grandparent posing as a member of law enforcement and claim that their grandchild has been arrested and they must pay money for the bail. They ask for immediate payment via cryptocurrency or a payment app. In the other type, scammers clone the grandchild’s voice and claim that they have either been arrested or involved in an accident. They then ask the grandparents for money and even ask them not to inform others like their parents to not get in trouble.
According to the FBI, seniors lost $1.9 million in grandparent scams in 2023 alone.
Charity Scams
In charity scams, the scammers pose as representatives of legitimate charities, soliciting donations for causes such as veterans’ assistance or health-related initiatives. For instance, a recent case involved a man in Utah who used robocalls to solicit donations for supposed veterans’ charities, ultimately swindling over $500,000 from unsuspecting seniors who believed their contributions would support those in need. These scams are particularly effective against older adults, who may be more trusting and less familiar with the tactics used by fraudsters.