Senior Scams. PHOTO: Cybercrime Magazine.

3 Cyber Fraud Tactics Targeting Seniors And Why They’re So Effective

Estimated losses from scams on the elderly are thought to cost families up to $36 billion annually

– Casey Crane

St. Petersburg, Fla. – Sep. 13, 2019

It’s the time in life when people expect to be enjoying themselves and spending time with family and friends. Instead, when they near or reach retirement age, many senior citizens find themselves the targets of senior fraud.

Although crime affects people of all ages and backgrounds, seniors and the elderly are frequently the most at risk for specific types of crimes because they make attractive targets to criminals. Unlike many millennials or even baby boomers, seniors often have “nest egg” funds for retirement. They’re less likely to actively monitor their credit. They’re typically very polite and are more trusting. They’re also less likely to report fraud out of embarrassment, shame, or fear that their families may believe that they should no longer live alone. 

The estimated losses due to elder financial abuse range widely. The FBI’s Internet Crime Complaint Center (IC3) 2018 Internet Crime Report shows that people 60 and older submitted more than 62,000 fraud complaints in 2018 with losses totaling nearly $650 million. Some less conservative sources estimate that fraud against seniors, or what’s known as elder financial exploitation (EFE), costs families in the U.S. upwards of $36 billion per year. Research shows that as seniors age, they’re more likely to sustain higher average losses to senior financial scams.

Although there are state and federal laws against taking advantage of seniors, criminals don’t abide by them, and they have an arsenal of tools, tactics, and attack vectors at their disposal.

Common Types of Cybercrimes and Financial Fraud Targeting Seniors

Elder financial abuse can occur anywhere, at any time, and can involve unknown criminals or members of the victims’ families. Some senior scams take place over the phone while others occur online or face to face. Examples of these scams include:

  • Tricking seniors into purchasing unnecessary products or services, such as a coffin for a deceased spouse when they will be cremated.
  • Charging fraudulent or unnecessary services using elderly victims’ Medicaid or Medicare information.
  • Coercing seniors into providing their personally identifying information (PII) or financial information to open new accounts.
  • Family members taking money from victims’ accounts or opening credit cards in their names.
  • Promoting false offers of reverse mortgages and loans.
  • Convincing seniors to have work performed by unlicensed contractors, and demanding full or partial payment up front. These criminals frequently never perform or finish the work, resulting in additional costs to the victims.
  • Targeting seniors with get-rich-quick pyramid schemes, or telling victims they’ve won a contest or the lottery. To collect, all they need to do is transfer a “small” amount of money to an account and then their winnings will be transferred to them.

These are just a few examples – the list goes on and on. While there are many other types of senior fraud, here are a few of the most common: 

Senior Fraud Tactic #1: Online and Telephone Phishing Scams

Everyone loves a good deal, and seniors are no different. This is why seniors frequently find themselves the targets of phone and email scams peddling free gifts and prizes, low-cost medications, and other items that seem too good to be true (because they are). The criminals use these items and other interests as bait in a type of attack known as phishing.

Phishing usually refers to scams that use unsolicited messages to trick victims into providing a variety of personally identifying information (PII), bank account details, and login information. Tactics often include the use of social engineering and language that evokes an emotional reaction such as fear or curiosity. Phishing can occur via email, over the phone (voice phishing, or “vishing”), and via SMS (SMS phishing, or “smishing”). The FBI’s IC3 2018 Internet Crime Report also indicates that tech support fraud is a growing area of crime with losses totaling $39 million in 2018. People over age 60 represent the majority of reported victims.

Arthur, a 70-year-old retired music teacher who lives near Queens, N.Y., is an unusually cybersecurity-savvy senior. He says that these types of phone phishing scams, in particular, are a significant concern for seniors.

“Senior citizens are very susceptible to these telephone questions where they start asking you for your Social Security [number] and things like that,” says Arthur.

He cautions others to be careful when using credit cards online.

“You have to be sure that you’re dealing with a reputable online dealer. You know, you start throwing your numbers around on eBay and things like that, you may end up having problems,” he says. “Just be careful and know who you’re dealing with. And when something sounds really good, ask yourself, is it really this good?”

Senior Fraud Tactic #2: Confidence/Romance Fraud

For many seniors, the internet represents a less intimidating way to connect with and meet new people. But this is also the playground of cybercriminals. These malicious actors use online platforms and other methods to conduct highly targeted attacks.

The FBI’s IC3 reports that in 2018, confidence/romance fraud was the seventh most commonly reported and the second most costly scam in terms of complaints received and victim loss.

In this crime, an elderly victim is deceived into believing they have some type of trust-based relationship with the actor. The criminal, who may pretend to be the victim’s grandchild or love interest, uses this relationship to persuade the victim to:

  • provide personal and financial information;
  • give money or buy expensive gifts; or
  • launder money unknowingly.

This particularly heinous cybercrime most commonly targets elderly women and those who are recently widowed.

Senior Fraud Tactic #3: Identity Theft

Identity theft happens to people of all ages, races, and backgrounds. It also comes in many forms, including medical identity theft, identity tax refund theft, and Social Security theft. Identity theft can occur online, over the phone, or without engaging a victim in any way by stealing their information.

Medical identity theft involves a criminal using someone’s medical or insurance information to make fraudulent charges. They may use the information to pay for services for themselves, or they may charge the services and pocket the money. Either way, they leave the victim on the hook for potentially thousands of dollars in charges. It also can make qualifying for insurance difficult in the future due to the imposter’s health records becoming linked to the victims’ information.

Identity theft tax refund fraud cost Americans of all ages $1.7 billion in 2016 alone, according to the U.S. Senate Special Committee on Aging. This type of crime involves an actor stealing or coercing victims into providing their personal and financial information, and submitting fraudulent tax returns on their behalf to claim their refunds.

Although Social Security Administration phone scams are nothing new, they’re becoming increasingly aggressive and threatening. In this form of attack, fraudsters share that there has been some type of fraudulent activity with the victim’s Social Security number and threaten to send the victim to jail if they don’t comply with certain demands. If they succeed in getting the victim to provide their PII, they can steal their Social Security income payments.

Elder financial abuse is a growing issue, and this trend is likely to continue as more baby boomers enter their retirement years. According to the U.S. Census Bureau:

“The nation’s 65-and-older population is projected to nearly double in size in coming decades, from 49 million people in 2017 to 95 million in 2060. As a result, nearly 1 in 4 Americans is projected to be 65 years and over by 2060.”

Luckily, there are things you can do to protect yourself or your loved ones from senior fraud. There are also a variety of online resources that can help you learn to recognize, avoid, and report scams targeting seniors.

If you believe that you or someone you love has been the victim of senior fraud, report it to local, state, or federal law enforcement.

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– Casey Crane is a freelance writer.