Seniors Lose 3B Annually Due to Scams

by | Jun 20, 2020 | Longevity

Seniors lose an estimated $2.9 billion annually from financial exploitation, according to the Senate Special Committee on Aging. Impersonating the IRS was the No. 1 scam targeting seniors in 2019. More than 1,500 seniors across the country contacted the committee’s fraud hotline in 2019; however, Kansas Attorney General Derek Schmidt states that only 1 in every 24 cases of elder exploitation gets reported. “Despite that under-reporting, statistically one in every 10 Americans age 65 or older who lives at home will become a victim of abuse,” he wrote. Here are the top 10 scams targeting seniors last year, according to the Senate aging committee’s 2019 Fraud Book:

1. IRS impersonators: More than 2.4 million Americans have been targeted by scammers impersonating IRS officials and more than 14,700 taxpayers have lost more than $72.8 million since 2013, according to the Treasury Inspector General for Tax Administration. In this case, criminals generally threaten victims with owing back taxes and warn foreclosure, arrest, or deportation if a payment isn’t made.

2. Robocalls: Nearly 2.4 billion robocalls are made each month, according to the Federal Communications Commission. Often originated overseas, callers mask their identities with fake phone numbers and pretend to be from the government or assume a false identity, in efforts to obtain personal information.

3. Sweepstakes scam/Jamaican lottery scam: Sweepstakes scammers falsely claim seniors have won a lottery and need to pay a fee to collect their winnings. The number of sweepstakes scams increased by 45.8 percent between 2013 and 2017, according to the FCC. Sweepstakes scams often come from a “876” number, the country code for Jamaica. At its peak, it was estimated that sophisticated Jamaican con artists placed approximately 30,000 phone calls to the U.S. each day and stole $300 million a year from tens of thousands of seniors, according to law enforcement and FairPoint Communications.

4. Computer tech support fraud: Microsoft estimates that 3.3 million Americans are victims of technical support scams annually, with losses of roughly $1.5 billion per year. Scammers usually pretend to be a reputable technology company like Microsoft, Apple or Dell. They convince victims that their computer has a virus and persuade them to provide personal information and bank account numbers.

5. Elder financial abuse: “Financial exploitation of older Americans is the illegal or improper use of an older adults fund’s property, or assets,” according to the Fraud Book. Seniors lose an estimated $2.9 billion annually due to financial exploitation, although these numbers are likely substantially under-reported, according to the Government Accountability Office. Scammers can include family members, paid home-care workers or strangers who take advantage of seniors’ financial decision-making.

6. Grandparent scams: An increasingly popular scam is the “grandparent scam,” where impostors either pretend to be the victims’ grandchild or claim to be holding the victims’ grandchild. They ask for money and usually never call back.

7. Romance frauds: Romance scams exploit seniors’ loneliness and vulnerability. Twelve percent of people ages 55 to 64 reported using an online dating site or mobile dating app, according to the Pew Research Center. Victims are contacted through a dating site and after trust is built between the two parties, the scammer asks for money for medical emergencies, hotel expenses, hospital bills or visas or other official documents.

8. Fake Social Security calls: Similar to the IRS scam, individuals pretend to work for the Social Security Administration and ask for victims’ Social Security number, date of birth, maiden name and bank account information.

9. Lawsuit or arrest threats: In the impending lawsuit scam, victims are called by someone pretending to be from a law enforcement agency. The scammers threaten a lawsuit or explain a warrant is out for the victim’s arrest if they do not pay a fine immediately. Often, the caller says the penalty was issued for failing to report for jury duty or not paying taxes.

10. Identity theft: Identity theft was the second-most common type of consumer complaint in 2017, with 371,061 complaints, according to the Federal Trade Commission. Nearly 4 of 10 identity theft complaints reported to the FTC in 2017 came from consumers ages 50 and over. Identity thieves not only drain bank accounts and charge credit cards, but they also defraud the government and taxpayers by using stolen personal information to submit fraudulent billings to Medicare and Medicaid.

The Senate aging committee recommends that victims place a fraud alert, report identity theft or file a police report if a scam is suspected.