13 Elder Scams to Avoid

It is an unfortunate fact that, more than any other demographic, older adults are the target of financial scams. And while we don't want to be the bearer of bad news, it appears as through scams targeting seniors are on the rise: in 2021, losses from fraud against the elderly increased by 71% compared to 2020, according to the Federal Trade Commission. And the trend appears to have continued into 2022: the AARP reports that overall consumer losses from financial scams in 2022 increased by 30% over the prior year. While that's devastating news for anyone's bank account, fraud can be particularly devastating for the elderly.

 So now, more than ever, we need to focus on fraud prevention and education of older adults. By and large, retirees have more savings at their disposal than other groups, making them particularly attractive to scammers. They also have more age-associated memory or cognitive troubles, which often means they will be much more susceptible to fraud. In addition, many elders may not realize how to report scams, or may be hesitant to report fraud out of fear their family will think they can no longer handle their own affairs.

This is why it is important to be aware of the most common elder scams. By being informed, you can better protect yourself and your family from fraud. Watch out for the following scams:

Impostor scams

We'll start with the category of financial scams that saw the highest increase in 2022. Impostor scams, also called investment scams, were responsible for a loss of over $3.8 billion in 2022. That's double the losses from the same category in 2021. In this model, a criminal will pose as someone else; a Medicare or Medicaid office representative, an employee of a utility company, a bank representative, or someone calling from a government agency. No matter what the guise, the cover is usually represented as an official of an entity with whom we already have a relationship.

Telemarketing and phone scams

This is one of the most common ways scammers defraud the elderly. They might pose as a salesperson pushing an enticing new product or as a charity soliciting urgent donations. This scam takes advantage of the anonymity of a phone call and the victim’s susceptibility to a confusing —  and time sensitive — offer. Since this type of fraud usually has no paper trail and does not take place in person, it can be very difficult for authorities to trace.

Lottery scams

This type of scam tricks its victims into believing that they have won a large cash prize or some other offer, such as a vacation or car. To claim their prize, however, the scammer will tell them that they need to make a payment first. In some cases, the scammer may even send their victim a fake check, then try to collect fees for “processing payments” or “taxes.”

Health insurance or Medicare scams

Seniors are often very concerned about their health, and these types of scams takes advantage of that. For instance, in a “rolling lab” scam, unnecessary and sometimes even fake tests are administered, then billed to the victim’s insurance company. Victims may even be charged for later for equipment they were told was free, or for services they never received.

Since most people over the age of 65 automatically qualify for Medicare, it can be easy for scammers to obtain their personal information, then use that to perpetrate a scheme similar to those described above.

Counterfeit prescription drug scams

Prescription drugs can often be a very expensive necessity for seniors with health ailments. Due to the rise of online markets for prescriptions drugs, these types of scams have become increasingly common in recent years due to the rise of online markets for prescription drugs. It is dangerous not only because it can rob its victims of money, but also because it can place their health in danger by giving them ineffective, or even unsafe, substances.

Internet fraud

Although the Internet has become an increasingly ubiquitous presence in our daily lives, many elderly individual are still learning how to use it. This lack of knowledge can make them easy targets for a variety Internet fraud tactics. For example, phishing scams can steal their credit card information, fake anti-virus software and “ransomware” can hijack their computers, and untrustworthy websites may take their cash without delivering what they ordered.

Funeral scams

The death of a loved one is very difficult time, and it is easy to be distracted by grief.  Since funerals can be expensive and most people are unaware of all the associated costs, they may not realize they are being scammed. Disreputable funeral homes may overcharge customers or bill them for unnecessary services, such as insisting that a casket is required for a direct cremation. They may also try to add additional cancellation or transportation fees that are against the law.

Reverse-mortgage scams

Reverse mortgages scams have become popular in recent years. Under a reverse mortgage, a lender pays the homeowner in return for equity in property they own. since seniors  often own property, they are the target of many reverse-mortgage scams. Posing as professional brokers or real estate investors, scammers offer seniors a free house or cash in exchange for equity from their property. In some cases, the scammer may also try to use a senior  as a straw buyer when illegally flipping a property.

Fraudulent anti-aging products

Similar to prescription drug scams, fraudulent anti-aging and beauty products often promise extremely low prices and results that are too good to be true. Elders concerned with their appearance need to be wary of anyone peddling treatments or medications with unrealistic claims. Although they sound appealing, these products may not work, and can even come with unwanted side effects.

Romance Scams

Criminals prey on the lonely elderly on-line posing as interested romantic partners on dating websites.  While some of the other scams on this list are quick, romance scams occur over a longer period.  The criminal will develop a relationship with the victim so that the victim starts to trust them.  Then they will start asking the victim to send money, personal information, or even for bank account information. It may start as seemingly innocent questions or nominal amounts of money.  But as it progresses, victims are likely to send larger amounts of money and/or disclose sensitive personal information.  The criminal will gain access to a victim’s accounts or credit cards and then disappear.

The grandparent scam

In this scam, a victim gets a call from someone claiming to be their grandchild. In order to assume this identity, they will ask an open-ended question, such as “Do you know who this is?” If the grandparent answers with the name of one of their grandchildren, the scammer will assume that identity and ask for financial assistance; a simple request for money to pay for some urgent expense, such as rent or a mortgage. Similar to romance scams, this simple and surprisingly effective form of fraud preys on relationships.

Tech support scams

In this scam, criminals pose as technology support on-line to gain remote access to the victim’s devices. Once they obtain entrance into the devices, they gain access to sensitive and personal information. Tech support scams can lead to not only financial losses, but identity theft as well.

Family/caregiver scam

Unfortunately, with this type of scam, it can be a relative, family friend or hired caregiver that tries to take advantage of seniors.  Under the guise of helping the senior care for themselves and/or help them manage their financial affairs, an individual gains access to the seniors home to financially exploit them.  There are a few ways a scam like this could go. For example:  the individual could coerce or influence the senior to change the beneficiaries of insurance policies, Will or trusts; convince the senior to turn over control of their finances to the individual or add their name to the senior’s accounts; or the individual could simply steal money or property from the senior. 

It’s important for you to only let someone you trust into your home to help you with your care and finances.  And family members should always be aware of what is going on in their parent or loved one’s home to help make sure they are not being financially exploited or abused. 

How to report a crime against the elderly

In order to stop fraud, it is not only important to become aware of how it is committed, but also to report it. While it can unfortunately be difficult to reclaim any money lost in a scam, you can still help catch the person or group of people that took advantage of you. 

Organizations such as the Better Business Bureau and the Federal Trade Commission are good places to call, as are credit reporting agencies like Experian and Equifax. The AARP has a comprehensive list of agencies to contact when you have become a victim of fraud.