While many of our posts focus on tips to help build wealth or manage money, we thought it would be fitting to cover a trend that has the potential to greatly impact the fortunes of many people, notably senior citizens and aging Americans.
We’re talking about financial scams, and how seniors lose out on a combined $3 billion annually to such, per a report from the Senate Special Committee on Aging. Perhaps even more harrowing, however, is how experts say that only about 1 of every 24 situations of elder exploitation is ever reported, so there’s good reason to believe that the aforementioned $3 billion number is actually much greater.
The elderly population, specifically, is more likely to be the target of scams because they’re generally not up to speed on the latest technologies and techniques that fraudsters are using to dupe them. This makes them particularly vulnerable.
This post will take a closer look at some of the scams that senior citizens are most commonly targeted with.
According to the IRS, fraudsters impersonating the IRS were the leading scam targeting senior citizens in 2018. In fact, a recent report on CNBC estimates that nearly 2.5 million Americans have been targeted by IRS impersonators since 2013. In many cases, the fraudsters’ tactics have worked, as some $73 million has been scammed within this timeframe.
Usually, scammers impersonating the IRS either approach targets at their home or by calling them on the phone, then threatening arrest, home foreclosure or even deportation if their demands are not met. Other scams may be via e-mail, asking targets to fill out a form. To avoid this scam, always remember the real IRS always first contacts people through the mail before further correspondence. If you’re suspicious, you can also ask for the person’s badge and callback number, then cross-reference it with the actual IRS for reference.
About 2.5 billion robocalls are made each month, where scammers make contact via phone in an attempt to gain personal information. To avoid this, register your number on the National Do Not Call Registry. This alone should cut down on the number of calls you receive. We also encourage you to simply just hang up on any call that seems suspicious or asks for confidential information, even if it comes through after your number is added to the NDNC Registry. If you want to take further measures, you can report any suspicious calls to the FTC.
The Grandparent Scam
This scam involves a caller either impersonating an elderly person’s grandchild, or threatening an elderly person’s grandchild until they receive a certain amount of money.
Here’s a growing trend that aims to capitalize on widows or widowers looking for romance or companionship. This typically involves seniors who use online dating services, as scammers look to take advantage of loneliness. They’ll typically target senior citizens, gain their trust through online correspondence, and then ask for money for a variety of hypothetical emergencies. Online scams are always a bit tougher to sniff out, but any situation that involves an individual that you haven’t met asking for money is usually bad news.
Social Security Related Calls
Similar to the IRS scam, another popular scam involves the Social Security Administration. This scam typically involves a fraudster impersonating a government agent with the Administration, then trying to verify personal information with the target, such as social security number, birth date, age and even bank account information. Any thief who has this information can thereby obtain easy access to impersonate their targets, which can lead to money fraud, making fraudulent billings to Medicare and Medicaid, and more. Again, just like the case of the IRS impersonator, don’t give out any information over the phone or online. You can also ask for a badge number and a callback number if you’re approached in person.
There are various other scams that aging Americans may encounter, but the likes of sweepstakes scams and pyramid schemes are generally much easier to sniff out. Even so, scammers are just likely to keep up with the times. When old means become ineffective, they’ll just move on to something else. Be prepared, so you can avoid being a statistic.