The world recently recognized Elder Abuse Awareness Day, a term that has many applications, depending on the region.
In this column, we are focusing on the financial exploitation of older Americans, which can be divided into two categories: financial abuse, which is committed by someone the victim knows, and financial fraud, which is perpetrated by a stranger.
These crimes can result in financial, physical, and emotional harm to older adults.
To quantify the financial impact, law enforcement agencies have released the damage done in the FBI’s Internet Crime Complaint Center’s 2023 Elder Fraud Report.
Last year, elder fraud complaints jumped by 14 percent, and associated losses of those crimes increased by about 11%. (For these types of crimes, the government defines “elder” as individuals aged 60 and older.)
The dollars involved in these crimes have ballooned, with elder scams robbing people of over $3.4 billion, or an average of $33,915 per victim.
The types of scams involved are wide-ranging, with tech support swindles accounting for the most widely reported kind of elder fraud in 2023.
These are events where criminals pose as representatives or fictitious companies. They offer to fix non-existent computer issues, and ultimately gain remote access to victims’ devices and sensitive information. Losses for tech scams amounted to $590 million last year.
But it was investment scams that were the most financially devastating kind of elder fraud in 2023, costing victims more than $1.2 billion in losses.
There is no single type of investment fraud, according to the FBI. Fraudsters often pitch these ideas as “low-risk investments with guaranteed returns” and include everything from Ponzi and pyramid schemes, market manipulation fraud, real estate investing, and cryptocurrency scams.
With crypto, criminals usually rely on building trust and confidence, initiating contact through dating apps, social media platforms or professional networking sites. As the relationship deepens, the criminal slowly lures the victim into a complex cryptocurrency investment scam.
Another insidious elder crime starts as a text or call from someone posing as a relative — usually a child or grandchild — claiming to be in immediate financial need.
Government officials at the FTC remind us that “scammers are good at faking it,” so it’s important to verify the person’s identity. “Resist the pressure to react and send money immediately. Hang up — or tell the person you’ll call them right back.
“If you don’t feel comfortable hanging up, try asking a question only the real person would know the answer to, like ‘What was the name of our childhood dog?’ or ‘Where did you spend Thanksgiving last year?’”
If you are seeking a more generalized preventive measure that can help uncover financial shenanigans, either from relatives or outside forces, most banks, credit unions and brokerage firms allow individuals to choose one or more trusted contacts, like an adult child or close friend, who your bank or credit union can reach out to for extra help in emergency situations.
If you believe you or someone you know may have been a victim of elder fraud, contact your local FBI field office, submit a tip online, or file a complaint with the FBI’s Internet Crime Complaint Center at ic3.gov. You will need:
Names of the scammer/company
Dates of contact
Methods of communication
Phone numbers, email/mailing addresses, and websites used by the perpetrator
Methods of payment
Where you sent funds, including wire transfers and prepaid cards (provide financial institution names, account names, and account numbers)
Descriptions of your interactions with the scammer and the instructions you were given
Keep original documentation, emails, faxes, and logs of communications and as a practice, be skeptical and defensive.
Jill Schlesinger, CFP, is a CBS News business analyst. A former options trader and CIO of an investment advisory firm, she welcomes comments and questions at askjill@jillonmoney.com. Check her website at www.jillonmoney.com.