Finance & Career
Financial exploitation is defined as the unlawful or improper use of an older adult’s money, property, or assets for personal gain. This exploitation, commonly done through fraud and scams, is the most common form of elder abuse in the United States. Unfortunately, older adults lose billions of dollars each year because of this widespread problem.
Given their age-associated vulnerabilities, older adults are prime targets for many scams. They usually live alone or with someone other than a spouse or partner. Although elder fraud is committed by professionals and strangers, 90 percent of these cases are committed by family members or individuals that the person trusts. When fraud occurs, older adults find it difficult to recover and can suffer from depression, anxiety, and sleeping disorders. They also experience shame, embarrassment, betrayal, helplessness, and anger.
Types of Fraud and Scams
Lending and property fraud are two common types of elder fraud. These include payday and title loans and fraud that violates a legal or ethical bond of trust, such as power of attorney or investments. However, one of the most common types of fraud is imposter scams.
Imposter scams use snail mail or digital technology, such as email, text messages, or phones. A person pretends to be someone else to obtain personal or financial information. Common imposter scams used today include the following:
- Coronavirus Scams. Often in these scams, individuals claim to have cures or treatments for COVID-19. For example, they claim to have testing strips and air filters that can remove the virus from the air. Scammers may also pretend to be a healthcare provider or hospital conducting contact tracing. In this situation, they notify an individual that they have been exposed to the virus. They then advise them to click on a link or to download a form. The link or attachment, when clicked, downloads malware onto the device. This allows the scammer to access personal and financial information.
- Stimulus Scams. In stimulus-related scams, people may pretend to be government representatives, a bank, or the Internal Revenue Service (IRS). They often say they can help an individual get their stimulus money quicker. They may also indicate the need to verify data by obtaining personal or financial information.
- Faith-Based Scams. Scammers may pose as religious leaders asking for contributions. These scammers often try to trick congregants into sending money by establishing a fake email account to request the money from a person.
- Census Scams. With 2020 being a census year, there are sure to be people working with census-related scams. Individuals in these cases may pretend to work for the Census Bureau and ask questions that allows them to steal personal or financial information.
- Medicare Scams. When it comes to older adult-related scams, fraudsters often claim to be Medicare or Social Security representatives. They often pretend to need personal information to update someone’s personal file (banking information) or simply their Medicare identification number.
Although tactics may differ, scammers attempt to instill fear, insist that elders act immediately, or require funds to be sent via wire transfer or downloaded onto prepaid cards. They also require secrecy or trick older adults into clicking on a link or an attachment by using language, such as
- you need to confirm your personal information
- our records show some suspicious activity on your account
- you are eligible for additional saving through our federally-sponsored program
The goal of a scammer is to get older adults to trust them. However, whatever method is used, there are several things older adults can do to stop scammers in their tracks.
- Do not trust everything. Spoofing is using false data, such as a number or email, to commit fraud. Do not trust all emails, texts, or phone calls from strangers asking to verify or provide personal information. The IRS, for example, will never call, email, or text to verify payment information. They also will not use the term stimulus payment. Try to verify unknown numbers or email addresses by conducting an online search. Many times consumers have already reported a scam and warnings are posted online.
- Don’t give any money to a charity before determining if it is legitimate. To confirm that a charity is legitimate, people can use the website charitynavigator.com, contact their local Better Business Bureau, or contact the Alabama Attorney General’s Office.
- Call other family members or friends to verify information about emergencies.
- Hang up on calls asking for personal or financial information. Do not click on links or open attachments from unknown individuals or organizations.
- Ignore offers of online cures, treatments, testing, and air filter kits for the coronavirus.
- Stay updated. People should keep their computer and cellphone software updated.
Play close attention to older adults and be on the lookout for possible scams. Look for unexplained changes in their financial situation. Also, watch for older adults to exhibit signs of scams such as overprotectiveness of new friends or caregivers, fear when around certain individuals, or secrecy.
Report fraud or scams to
- Adult Protective Services (Elder Abuse 1-800-458-7214 or email@example.com)
- Alabama Attorney General’s Office (800-392-5658/334-353-1765 or firstname.lastname@example.org/legacy)
- Federal Trade Commission (1-877-FTC-HELP or ftccomplaintassistant.gov)
- The local police department or the Better Business Bureau.
Financial exploitation of the elderly is a widespread problem that is increasing throughout the world. Millions of older adults lose hard earned dollars to fraud and scams. Alabama Extension can help educate people about elder fraud through the Consumer Education for Seniors program.
To sign up for the program, contact your county Extension office or Dorothy Brandon, an Alabama Extension consumer sciences specialist, at (256) 372-5458.