Older Americans losing billions to fraud: FTC report and new protection measures

A recent report from the Federal Trade Commission (FTC) reveals that older Americans lost over $1.9 billion to fraud in 2023, a staggering amount that highlights the financial vulnerability of this demographic. However, experts believe the actual figure is much higher, with estimates suggesting total losses could reach as much as $61.5 billion due to the significant number of unreported cases. This alarming trend underscores the urgent need for enhanced protections and preventive measures to safeguard older adults from scams.

The landscape of fraud targeting seniors

The FTC’s Protecting Older Consumers, 2023-2024 report identifies various types of fraud schemes that disproportionately affect seniors. Among the most common scams are tech support fraud, romance scams, business impersonation, investment fraud, and lottery or sweepstakes scams.

The report highlights that older adults aged 60 and over are less likely to report losing money to fraud compared to younger individuals. When they do report losses, however, seniors often suffer greater financial damage. For instance, victims aged 80 and older reported losing a median of $1,450, while those in their seventies faced a median loss of $804. Notably, the number of older individuals reporting losses exceeding $100,000 has more than tripled since 2020, reflecting a troubling escalation in the severity of these scams.

Kathy Stokes, director of AARP’s Fraud Prevention Programs, points out that while fraud can affect individuals of any age, seniors have more assets at risk. “It’s the retirement funds, it’s maybe life insurance proceeds, but it’s also homes and cars, and criminals will seek to take everything,” she explains. This perspective highlights the multifaceted nature of the problem, where not only financial assets are at stake, but also the sense of security and trust that many older adults have in their ability to make sound financial decisions.

Factors contributing to underreporting

One of the significant challenges in addressing fraud against older adults is the underreporting of scams. Many seniors feel a sense of shame or embarrassment after falling victim to fraud, which can deter them from reporting their experiences. Stokes notes that older adults may worry that their adult children will question their capacity to make financial decisions, exacerbating their reluctance to speak out. This cultural stigma surrounding fraud victimization can hinder efforts to address and prevent these crimes.

The FTC’s report emphasizes that a lack of awareness about reporting options also contributes to the problem. Seniors might not know how to report fraud or might fear that their claims will not be taken seriously. The agency urges family members and caregivers to remain vigilant and supportive, encouraging open discussions about financial security and the potential risks associated with scams.

FTC’s initiatives to combat fraud

In response to the growing crisis of fraud targeting older adults, the FTC has launched several initiatives aimed at enhancing consumer protections. One of the key efforts is the establishment of the Scams Against Older Adults Advisory Group, formed under the Stop Senior Scams Act of 2022. This group includes representatives from various federal and state agencies and has been tasked with developing strategies to interrupt scams that target seniors.

The Advisory Group has implemented consumer education programs to raise awareness about prevalent scams and provide seniors with the tools to recognize and report fraudulent activities. These programs have explored new materials, partnerships, and communication channels to effectively reach older adults and educate them on how to protect themselves from scams.

The group’s consumer education committee has created a simple reference sheet outlining best practices for effective outreach, enabling organizations and individuals to better educate seniors about potential threats. Additionally, the training committee has reviewed current methods for employee training across industries, producing guidance documents to help companies improve their anti-fraud training programs.

The Technology and New Methods Committee has established working groups focused on recovering funds lost by consumers to scams, particularly through bank transfers. They are also addressing the need to reduce fraud in gift card transactions and explore ways to enhance information sharing among private companies to prevent fraud.

Types of scams targeting older adults

Fraudsters employ a variety of tactics to exploit older Americans, often taking advantage of their trust and unfamiliarity with modern technology. According to the FTC report, some of the most common scams targeting seniors include technology assistance fraud, romance scams, and lottery or prize scams. Each of these schemes plays on different vulnerabilities, but they all aim to steal personal information or money from their victims.

Technology assistance scams: In technology assistance scams, fraudsters typically pose as technical support agents from well-known companies like Microsoft or Apple. They claim that the victim’s computer or smartphone has been compromised and offer to “fix” the problem for a fee. In many cases, the scammers gain remote access to the victim’s device, steal sensitive information, or install harmful software designed to gather data for future attacks.

Romance scams: Romance scams, another prevalent scheme targeting older adults, involve scammers creating fake online identities to form emotional connections with their victims. They may pose as potential romantic partners and gradually gain the victim’s trust before requesting money for various fabricated reasons, such as travel expenses, medical emergencies, or business ventures. These scams can be particularly devastating as they often result in both emotional and financial loss.

Lottery and prize scams: In lottery and prize scams, victims are told they have won a large sum of money or an expensive prize. To claim the winnings, they are asked to pay upfront fees or taxes. The scammers often ask for payment in gift cards or wire transfers, making it difficult to recover the stolen money. Sadly, these scams disproportionately affect older adults, who may not recognize the warning signs of such fraudulent offers.

Protecting older Americans from scams

If you have older family members or friends, you play a crucial role in helping them stay safe from financial fraud. Encourage them to be cautious about unsolicited communications, whether through phone calls, texts, or emails and to be skeptical of strangers asking for personal or financial information. Here are a few actionable steps that can be taken:

Encourage open communication: One of the most effective ways to prevent scams is to encourage seniors to talk openly about their financial decisions and concerns. Family members should regularly check in with their elderly loved ones and create an environment where they feel safe discussing suspicious activities without fear of judgment or embarrassment.

Protect sensitive information: Seniors should be reminded to never share sensitive information, such as Social Security numbers or bank details, over the phone or online unless they are certain of the recipient’s identity. Scammers often impersonate government agencies or financial institutions, so it’s important to verify the authenticity of any communication before providing personal details.

Use secure online platforms: For those who manage their finances online, it’s important to use secure banking platforms and avoid sharing login credentials. Additionally, implementing two-factor authentication and using strong, unique passwords for each account can help protect against unauthorized access.

Moving forward in protecting older adults

The FTC’s comprehensive report and the initiatives outlined signify a concerted effort to address the growing epidemic of fraud targeting older Americans. As the number of scams continues to rise, raising awareness, improving education, and fostering a supportive environment for victims will be critical in protecting this vulnerable population.

Families, communities, and organizations must unite to foster vigilance and open communication, helping older adults identify and report fraud while ensuring strong protections. Although challenges remain, the FTC’s efforts mark a positive step in combating fraud. By prioritizing the financial security of older Americans, society can protect their assets and rebuild trust in financial decision-making.