Seniors are the highest at risk for scams

Elder fraud, also known as elder financial exploitation, has been called the “crime of the 21st century” and deploying effective countermeasures have never been more important to protect our senior citizens.

The FBI’s Internet Complaint Center (IC3) creates an annual report outlining the internet threat landscape for US citizens and identifies common trends for the year. The 2023 IC3 report revealed that the losses by those over the age of 60 topped $3.4 billion, an almost 11% increase in reported losses from 2022. Last year, The FBI’s IC3 team received over 100,000 complaints from victims over 60, with victims losing an average of $34,000 because of scams. The FBI’s annual IC3 report highlights the increased risk that seniors face when managing their investments, as they are statistically the most targeted group for cybercriminals to exploit for financial gain.

What is Elder Fraud?

Put simply, elder fraud is the illegal or improper use of an older person’s funds, property or assets. This most
common form of elder abuse targets victims generally over the age of 60 and usually involves making false promises about financial benefits, commodities, or services that either do not exist, were never intended to be offered, or
were misinterpreted. In 2023, the FBI’s IC3 recorded that investment scams against elders were responsible for over $1.2 billion in total financial losses. Seniors are typically targeted by cybercriminals for a multitude of reasons, some common reasons are listed below:

• Seniors have higher average net worth, usually have a regular source of income such as Social Security, and typically own assets such as properties, savings accounts, and retirement accounts
• Seniors are especially vulnerable due to isolation, declining mental and physical health, and may be more trusting than the average adult
• More susceptible to internet fraud due to technological barriers and literacy
• Seniors looking to retire may find themselves more open to alternative investments to safeguard their wealth

Elder Fraud Red Flags to Spot

Elder Fraud can take many forms, from scams targeting seniors directly to financial abuse by “trusted” individuals.
Here are some key red flags to look out for to protect elders:

• Unusual Financial Activity
  • Look out for large, unexpected withdrawals or transfers from bank accounts
  • Sudden changes in spending patterns, such as frequent purchases of gift cards or unusual online
    transactions
• Isolation or Fear
  • Increased isolation from family and friends
  • Fear or anxiety when discussing financial matters
• Unpaid Bills or Notices
  • Unpaid bills or notices of overdue payments despite having sufficient funds
  • Utilities or services being cut off unexpectedly
• Strange Communication
  • Frequent phone calls or emails from unknown individuals or organizations, especially those requesting personal information or money
  • Pressure to make immediate decisions regarding finances, donations, or investments
• Unfamiliar Businesses or Charities
  • Donations to unfamiliar charities or causes that the elder has no history of supporting
  • Payments to business or for services that the elder does not need or use

How to avoid Elder Fraud?

Elder fraud can be perpetrated by a stranger and many times even someone close to the victim, such as a family member or caregiver. LPL Financial advisors frequently work with retirement age adults and/or may be of retirement age themselves. To protect yourself against elder fraud, there are a few steps you can take to ensure that you are protected:

• Simplify your finances
  • Designate someone as power of attorney
  • Limit access to financial accounts to only trusted individual
• Keep up to date on local scams and understand common scams
  • Stay informed on the lates scams targeting seniors, such as lottery scams, investment scams, and
    phishing scams
  • Educate seniors about the dangers of sharing personal information, especially over the phone,
    online, or with strangers
• Monitor and strengthen your financial and investment accounts
  • Set up account alerts with banks and financial institutions to monitor suspicious activity
  • Check credit reports annually to ensure no unauthorized accounts have been opened
• Verify credentials before giving out confidential information
  • Never wire money without verifying person or organization
  • Do not provide any personal information unless the person is verified, and you were expecting the
    request

What to do if you are a victim of Elder Fraud:

If you or someone you know has fallen victim to elder fraud, immediately stop all communication with the scammer. If the scammer obtained any sensitive information such as your Social Security number, contact the credit bureaus as well as the Social Security Administration. If they have compromised any banking information, contact the
financial institution as soon as possible so that they can assist with the situation.

If you would like to report a case of elder fraud to the FBI Internet Crime Complaint Center, please use this link:
https://www.ic3.gov/Home/EF

More resources on common scams can be found on the FBI’s website linked here: https://www.fbi.gov/how-wecan-
help-you/scams-and-safety/common-frauds-and-scams

References:

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. This material was prepared by LPL Financial, LLC